Craftsmanship: Well done or half-baked? (Part 1)

Posted on February 21, 2012 in Jewellery Appraisals

Part 1 of 4

By Mark T. Cartwright

Poorly finished surfaces and tool marks from hurried craftsmen are obvious signs of mass-produced, mid- to low-market level jewellery. Photo courtesy Mark T. Cartwright

For the jewellery valuer, the importance of discerning and describing the level of craftsmanship cannot be overemphasized. Each step in the manufacture of jewellery can serve as an opportunity to demonstrate excellence or, all too commonly, provide an opportunity to skim more profit at the cost of quality. When we can examine a piece of jewellery and recognize the choices made by the manufacturer, we may find answers to questions that are vital to correct valuation. The care and skill exercised in the creation of a piece of jewellery can lead us to the correct market and market level, help solve the riddle of authenticity, identify potential hazards to its stability, assure proper indemnity, and possibly help our clients make better choices in the future.

 

Gaining perspective I began my professional jewellery career at the bench. I learned from my peers, in college art classes, and by attending industry-sponsored workshops that focused on specialized techniques. I abused countless stones, tortured much metal, and after almost 15 years on the bench, I nearly achieved mediocrity. In spite of having 10 left thumbs, the experience was invaluable to me and I learned to recognize the work of those jewellers who are truly gifted. Common shortcuts and shortcomings became easy to spot, and as the owner of a store specializing in handcrafted fine jewellery, I also understood the direct relationship between quality and cost. Although actual experience on the bench isn’t a requirement for evaluating a jeweller’s skill, familiarizing oneself with the qualities of exceptionally well-made jewellery is necessary to gain the proper perspective. Until you’ve seen the best, you will never recognize second best.

The reality is that exceptional quality takes time and skill to produce. Skilled craftspeople are a rare commodity who are typically well paid; the axiom “time is money” is especially true in the world of manufacturing. In my appraisals, I describe the various components of craftsmanship using the terms ‘excellent,’ ‘very good,’ ‘good,’ ‘fair,’ and ‘poor.’ I also explicitly define those terms. The various components I consider are the mounting, the finish, and the stone setting. I have a separate section in the report describing the quality of any repairs performed. Unfortunately, very few pieces I examine receive a grade higher than ‘good’ in any category; perhaps I’m a tough critic or maybe there is just a lot of mediocre jewellery in my market. Let’s look at the signposts of good craftsmanship and where they can lead us. Remember that jeweller’s skill and item condition are two separate issues and they should be described individually in our report.

More to come of this story in Part 2.

Posted in Jewellery Appraisals | Tagged , | Leave a comment

The logic of layaway (Part 2)

Posted on February 16, 2012 in Jewellery Store Marketing

Part 2 of 2

By Nicole MacIntyre

Once a regular practice in the jewellery world, layaway has increasingly taken a backseat to credit cards. Even during recent swings in the economy, jewellers say interest in layaway programs has remained relatively consistent, despite the fact there are usually no additional charges.

“It used to be much more popular,” says Kim Markwart of Markwart Jewellers in Tisdale, Sask. She adds the practice was far more common 50 years ago when the small-town jeweller opened.

Generally, customers still tend to go for credit or in-store financing before layaway, says Peter Norton, past chair of the Canadian Jewellers Association (CJA) and owner of Nortons Jewellers in Charlottetown, P.E.I. “People want [the product] now,” he says, noting the prospect of waiting for an item while paying it off can be unappealing for some customers.

But Norton also says he suspects part of the reason layaway is not used more often is that salespeople forget to mention it when trying to close a sale. When they do, the tactic often works well, especially for items that aren’t needed for some time, like engagement rings or wedding bands. For some customers, a layaway plan is also more attractive than financing, which levels hefty penalties for missed payments, adds Norton. “[Layaway] is not quite as scary.”

Jeff Walters of Jeff Walters Diamonds in Barrie, Ont., prefers not to offer financing because he worries customers blame the store, rather than the financing company, when something goes wrong. Whether embarrassed or angry, they may avoid making any future purchases with the retailer, he explains, or referring the store to family and friends. Walters says he also doesn’t want to encourage people to spend more than they can afford through financing. Layaway, on the other hand, works for both him and his customers.

Crunching the numbers

The key to an attractive and effective layaway plan, retailers say, is the size of the deposit. It should be a modest amount to entice a customer, while also being significant enough to ensure they don’t walk away from the sale later on. “Make sure it’s a serious deposit,” advises Norton, who likes to see at least 25 per cent put down on a lower-priced item.

Walters, who specializes in custom-made jewellery, recommends asking customers what amount they are comfortable putting down. Often, they offer far more than expected. However, he’s more firm about a sizable deposit when it comes to a unique item, like a family ring, which is difficult to sell to another buyer when the customer decides not to take the jewellery.

Once customers are committed, it’s also important to closely monitor the status of their payments. “You have to be on top of it,” says Walters, explaining he has staff pull the files every two months, offering a gentle reminder to people who have fallen behind in payments. In most cases though, Walters finds customers pay off their outstanding balances early.

“People get excited when their items are available,” he says, noting he makes a point of finishing custom engagement rings ahead of schedule.

Walters says only three per cent of his layaway sales tend to fall through, a figure that’s consistent with other jewellers. The risk of an abandoned sale is one of the few negatives of layaway, especially when the retailer has taken an item out of a showcase and away from the eyes of potential buyers.

“In a sense, when you put something on layaway, you are financing [the client],” says Markwart. However, she notes customers rarely change their minds and in a worst-case scenario, their down payment is refunded and the item is simply put back on display.

“There’s no big downside to layaway,” agrees Norton. “It really is a great way to help close a sale.”

Yet, seasoned sellers agree: suggest a layaway plan only when a sale is wavering, as it’s always better to get the full amount up front.

Posted in Jewellery Store Marketing | Tagged , , , , | Leave a comment

Stop thief! (Part 2)

Posted on February 15, 2012 in Jewellery Safety & Security

Part 2 of 2

By David J. Sexton

In part 1 of this story, we looked at grab and runs as a crime of opportunity. Here’s how you can protect yourself.

● Show only one item at a time. While treating customers like they are thieves-in-waiting is not how to run a business, one clear-cut way to reduce the risk of grab-andrun losses is to never remove more than one item from a display case. A thief getting away with one piece of jewellery is bad enough, but consider the losses if they had a diamond ring on each finger. Display showcase cards that communicate your insurance company will not allow you to show more than one item at a time.

● Assist a customer in comparing two or more items. Many customers want to compare pieces in their hands before making their final decision. In these instances, display the second item on your wrist, finger, or hand, placing it next to the item the customer is holding.

● Use a separate room for pricier pieces. Your biggest concern should be high-valued items. Remember, a thief may have already visited the store to pinpoint which jewellery is more attractive to steal. When a customer asks to view or compare one or several big-ticket items, direct them to a separate room or area where you can both sit together. This will make it more difficult for a thief to escape with an item and can deter them from even trying.

● Planning your store’s layout. The layout of your store is important, particularly when it comes to the exits. Consider a floor plan that requires customers walk around showcases to reach the door, rather than have a straight path to the exit. Not only can this simple measure help eliminate a quick-exit option, you may even sell more jewellery since clients have to pass showcases a second time on their way out. In addition, display high-value merchandise away from the exit. Luxury watches, large-carat jewellery items, and other high-value pieces should be distributed among several cases located as far as possible from any means of egress.

● Be prepared. Before displaying jewellery, gather all the tools you will need in your sales presentation, such as a display pad, loupe, calculator, pen and paper, etc. If you must leave the customer for any reason, put the jewellery back into the locked showcase or take it with you. A thief needs only a few seconds to grab jewellery and run out the door, so don’t turn away for even a moment. Stay alert and expect distractions. Thieves may create a commotion to distract you, allowing them to make their move.

● Lock showcases when not in use. Practice sound showcase key control at all times. Make it a habit to lock showcases after removing or returning items, even if you are walking away for a short time. When handling merchandise, replace an item and lock the showcase before going to a second display for another. Unlocked showcases make it easy for thieves to grab items and run out the door. Keep every slot in display trays filled with merchandise or markers, so you know when something is missing.

● Ask for ID. If someone you don’t know asks to see high-value items, explain your insurance company requires their identification as a security measure. Keep the customer’s driver’s licence or other form of identification on the counter beside you while showing the items. A legitimate customer won’t mind, but a thief will become very uncomfortable.

Jewellers Vigilance Canada (JVC) cautions all retailers remain alert and on the lookout that someone may be trying to deceive you. Don’t be fooled by diversions or distractions, such as arguments, hysteria, commotions, individuals claiming illness, or even bickering children. As strange as it may seem, all of these tactics have been successfully used by thieves time and again.

Sales associates must be trained to watch for and report any and all incidents of suspicious activity they may observe both inside and outside the store. This training is vital to anyone dealing with the jewellery-buying public. Surveillance recordings of actual grab-and-run thefts can also help with sales associate awareness training.

To help prevent losses, consider developing your own alert system. Whenever a suspicious person or situation is observed by any sales associate, a code word or phrase can be used to alert others. Heightened awareness allows staff to observe the suspect’s behaviour more intently. Meanwhile, the obvious shift of the associate’s focus from making a sale to one of observation will not be missed by the suspects, who will quickly realize they are being watched.

When it appears as though a grab-and-run theft is about to be committed, the following can help reduce your loss.

● Draw all sales associates and available staff onto the showroom floor during these alerts.

● Direct a staff member to stand near the front entrance, watching the suspicious behaviour with arms folded.

Overall precautions should include the following:

● Examine all jewellery display showcase tops and key locks several times a day for signs of tampering.

● Ensure all jewellery display showcases are uniquely keyed and kept locked at all times.

● Maintain effective showcase key control at all times.

● After showing jewellery to a client, secure it back in the display case each and every time. When would-be thieves know your staff is aware of their presence, the effectiveness of their techniques is significantly compromised. In many instances this may be sufficient motivation to get them to leave your store without further incident.

 

Posted in Jewellery Safety & Security | Tagged , , | Leave a comment

Times are changing (Part 2)

Posted on February 13, 2012 in Watches

Part 2 of 2

By Nicole MacIntyre

While Seiko has traditionally stayed the course in the past and chose not to dive into fashion trends, Marc Lachance, senior vice-president of Odyssey Time, says the changing market is forcing the company and other watchmakers to widen their appeal.

“We’re not a fashion brand. We’re classic in design,” he says, explaining the company knows it has to remain true to its roots, while also evolving to meet customer demands. “Brands like us have said we have to revitalize ourselves.”

To widen its appeal to a younger demographic, Seiko recently launched a line of ladies’ watches featuring crystals, a new design element for the brand. “Seiko was never in that business. Never, never, never,” says Lachance. “We’re evolving, maybe at a slower pace because that’s not our bread and butter, but we have to go after that and find our own fashion element.”

Ladies’ watch (style 44N100) from Caravelle by Bulova with white leather band, rose gold finish, and bezel with crystals.

Stephen Taylor, president of Bulova Watch Co., steers clear of the term ‘fashion watch.’ He prefers to think of “fashion buyers,” customers who purchase a watch as an accessory to their wardrobe, rather than a long-term statement about themselves. While most consider fashion pieces to be in the low hundreds in price point, Taylor notes what is high-end to some, maybe be fashion for others.

Regardless of the terminology, he is well-versed on the trend. While no one knows how long it will last and if it will represent much market growth, Bulova is ready to take part, Taylor says.

“Right now it’s a pretty hot trend and we’re well-positioned to take advantage of it,” says Taylor, explaining the brand has numerous lines to appeal to different types of customers. At the lower end, it is fashion-driven, embracing patterns, colours, shapes, and more aggressive use of stones. While he believes the trend is an “incremental opportunity,” he says it also offers watchmakers the chance to engage with customers more often.

When it comes to Bulova’s bottom line, Taylor says high-end watches are still bringing in just as much money as trendy fashion pieces. Based on those numbers, he advises retailers not to jump on the fashion trend at the expense of traditional watches. Instead, he suggests having a mix.

“It’s a mistake to cater to just one part of the market,” he says, noting jewellers who choose to focus solely on the lower end of the industry may be putting themselves in direct competition with retailers like department stores.

The fashion trend is both an opportunity and a challenge for retailers, notes Lachance. A traditional mom and pop store would have steered away from fashion pieces in the past because they were too risky, he notes. But the changing market is forcing jewellers to explore new merchandise. It’s also impossible to ignore the current popularity of fashion watches.

“They are looking for something different to stir up sales,” says Lachance. However, he warns that younger customers likely aren’t turning to a traditional jeweller to buy a watch and that jewellers can’t afford to spend their time selling timepieces that cost $100. The price point that seems to work for customers and retailers is north of $225, he says.

The best approach for a retailer, says Lachance, is the same one traditional watch companies are embracing. He likes to use a restaurant analogy. Classic watchmakers can’t be a high-end steak restaurant anymore. They need variety, says Lachance. “We’re like a buffet—we have to have a little bit of everything.”

The watch display at James O. Poag Jewellers in Strathroy, Ont., is a well-selected smorgasbord. Jenny Dortmans takes great care to offer watches that appeal to a wide range of customers, whether it’s a university student or middle age professional. Still, she says sales have steered the inventory toward fashion, which accounts for about 70 per cent of the store’s stock. “It brings in a different type of clientele,” she says. “It’s definitely more in demand.”

The store’s displays these days feature more colours, unique materials, and designs than ever. And Dortmans notes she spends less time detailing the mechanics of a watch as customers seem to care more about the look. “We have definitely noticed a trend more toward watches not being used as a function piece.”

Does that mean today’s fashion watch buyers are never going to make a long-term investment on their wrists? Taylor doesn’t think so. When he joined the industry a couple years ago, he recalls everyone telling him watches were doomed. He’s now proud to declare that’s far from true and notes watches, much like cars, are still one of the few ways a person celebrates his or her lifestyle.

“A watch is an opportunity to make a personal statement or to reward yourself,” he adds.

That won’t change, Taylor notes, no matter the fashion trend.

Posted in Watches | Tagged , , , , , | 1 Comment

The logic of layaway (Part 1)

Posted on February 10, 2012 in Jewellery Store Marketing

Part 1 of 2

By Nicole MacIntyre

For nearly two years, a diamond ring sat in a display case at Jeff Walters Diamonds in Barrie, Ont.

Although the $12,000 piece was stunning, Walters had nearly given up hope of selling it when the unique treasure finally caught a customer’s eye. He wanted to buy the ring, but couldn’t afford it for several more months.

Not wanting to lose the sale, Walters detailed the store’s layaway plan and suggested the customer pay in installments. “We decided we had nothing to lose,” says Walters, who quickly sealed a deal. Four months later, the client returned to pay the bill in full, boosting the store’s books months ahead in projected sales.

The experience reaffirmed Walters’ faith in offering layaway as an invaluable sales tool that often benefits jewellers sooner than expected. “It’s a wonderful way of closing a sale,” says Walters, whose family has been in the jewellery business for decades. “Not to offer a layaway plan is not to be in business in my opinion.”

Popularized during the Great Depression, layaway plans have experienced a resurgence across the retail sector since the start of the recession. Although the service has long been offered by jewellers where customers often look to make a significant purchase for a future occasion, it remains the second choice behind credit.

When presented effectively, a flexible payment plan can help save a wobbly sale and commit a customer to additional purchases. Yet, experienced retailers warn not to play the layaway card too quickly, as well as staying on top of outstanding amounts to ensure they are collected.

Foundation for future sales

In the backrooms of Barry’s Jewellers’ two locations in Hamilton and Burlington, Ont., there are upwards of 250 items set aside on layaway at any one time. Buyer Cindy Galletti credits the program’s success to the store’s flexibility, noting there’s no formal policy on minimum deposits or payment terms. “We don’t really have any set rules,” she says, adding it all depends on the customer and an item’s price tag.

Beyond the typical use of layaway for engagement rings, Galletti frequently reminds the store’s salespeople to use the plan as a way to commit customers to additional purchases. If someone is buying a necklace for Valentine’s Day, for example, she recommends also pointing out the matching earrings or bracelet that can be set aside for a birthday or anniversary.

“We suggest it to everyone—absolutely,” she says, noting many male customers are grateful for the idea. “Customers are happy when their shopping is easy.”

A well-communicated layaway plan can also help convince a regular customer to make a more sizable purchase, Galletti says, recalling one of the store’s better sales. A long-time customer who usually shops in the low- to mid-price range wanted to make a major investment for his wife for their upcoming 25th wedding anniversary. He put aside a two-carat diamond ring, making monthly trips to the mall for two years to pay down the $20,000 bill.

Helping a customer afford a piece of jewellery without going into debt can also cultivate a life-long client, says Kim Markwart of Markwart Jewellers in Tisdale, Sask. She recalls a female customer who wanted to buy herself a black and white diamond ring, making $50 payments towards it every week. Markwart came to know the customer well and before paying the final installment, she had committed to buying another ring.

More to come of this story in Part 2.

Posted in Jewellery Store Marketing | Tagged , , , , , , | Leave a comment

Stop thief! (Part 1)

Posted on February 8, 2012 in Jewellery Safety & Security

Part 1 of 2

By David J. Sexton

Showing a customer jewellery is simply the way things are done. A client’s interest is piqued by a particular piece, the salesperson removes it from a locked case, and places it on a display pad in front of them. Next thing you know, the ‘customer’ has grabbed the jewellery and bolted from the store. ‘Grab and runs’ are one of the most difficult crimes to prevent. They are also on the rise in Canada, costing jewellers hundreds of thousands every year.

Grab-and-run thefts are crimes of opportunity. Thieves work alone or may even have an accomplice who remains in the background to help facilitate their escape by ‘innocently’ holding a door open. Normally, the grab-and-run thief requests to see specific merchandise. They may even ask that several pieces be removed from cases for the sake of conducting a visual comparison, thereby increasing the opportunity to steal multiple items. Creating a rapport with the associate, a grab-and-run thief will get them to focus their attention on making the sale, relaxing their guard just long enough to make a move. Their ability to read the situation allows them to determine the optimum time to strike, which they do with lightning speed. Unfortunately, a grab-and-run thief does not have to be highly skilled at doing what they do best: creating opportunities to steal right under a sales associate’s nose.

When it comes to surveillance systems, grab-and-run thieves are not usually deterred. In fact, many jewellers have video recordings showing how thieves successfully set up sales associates to provide the very opportunities allowing them access to high-value jewellery. When reviewing the recordings, sales associates frequently note their surprise at the customer grabbing the item(s) and fleeing. Victims frequently admit they were dazed by the speed at which the crimes occurred, which in many cases means they are only able to provide minimal details about the thieves to law enforcement.

Having done research online beforehand, thieves in general can be quite convincing as serious customers shopping for specific items. It’s not unheard of for a thief to visit a store several times, developing a rapport with a sales associate and creating trust. Each time they return, they may ask the sales associate to show multiple items for the sake of comparison, and in many cases, even higher-valued items. When the moment is right, the thief grabs the piece and runs, leaving the sales associate in utter disbelief. Without the proper procedures in place, these instances can become more and more common. Next time, we look at how you can protect yourself.

More to come of this story in Part 2.

Posted in Jewellery Safety & Security | Tagged , | Leave a comment