Now's Too Late to Start Courting Retailers

RAPAPORT... Will the holiday season bring joy to wholesalers andmanufacturers? Traditionally, the industry looks to the fourth quarter to turna profit, but some are taking a longer view in hopes of making the holidayspart of a 12-month business."All barometers point to a strong holiday season," saysRonnie VanderLinden, president of New York-based diamond manufacturer Diamex,as well as of the Diamond Manufacturers & Importers Association of America(DMIA). "We had fantastic results at the summer shows that speak tothe optimism about the impending season," agrees Andrew Rickard, vice presidentof operations at RDI Diamonds, a wholesaler in Rochester, New York. Even therecent talk of US tariff wars has had no impact on the diamond business, norhas it dampened wholesaler confidence; most are adopting a wait-and-seeattitude on the subject. Meanwhile, holiday order-writing has followed a predictablepattern so far. "Companies that forecast larger volume placed their ordersin August," explains Arch Kitsinian, president of manufacturer SA Kitsinian inVan Nuys, California. However, the independent stores are "typically later inthe game," placing orders in September and October, he says. Rickard, for his part, has already been delivering a "goodportion" of orders, with the remaining ones set to go out by the end of thismonth.360-degree viewWhile gift-giving increases during the fourth quarter, manywholesalers rely on bridal as the foundation of their year-round sales. But thejewelry product itself is just part of the equation; wholesalers areincreasingly recognizing the need to take broader economic, marketing andindustry trends into account. "There is no question that we still count on the holidays,"says VanderLinden, "but quite frankly, our biggest challenge is to bring thecustomer back to the retail store. We are successfully dealing with complianceissues [regarding jewelry-industry regulations], but that will mean little tonothing if we don't get the consumer into the stores to buy our products." The multitude of buying options available has transformedthe retail landscape. "We have seen a lot of people going direct and brandsselling online. It is the nature of business now," explains Kitsinian, whosecompany owns bridal and fashion jewelry brand Vanna K. "But I don't think thefundamental challenges have changed all that much. The core of our businessrevolves around the fact that we have to provide an extraordinary level ofservice and exceptional quality on a timely basis throughout the year." For him, that translates into understanding the mind-set ofthe retailer. "At our headquarters, we tell each other that we want to actlike the jeweler's back office," he explains. "Our service has to includecustomer follow-up, delivery, product mix and pricing - as well as the abilityto come up with new and exciting product. It is crucial to respond quickly,especially during the holiday period." Forging loyaltyOf course, developing and strengthening retail partnershipsentails dedicated, ongoing efforts. "You have to forge the relationship all[the other] 11 months of the year - not just the 12th," says Rickard. "Youcan't call someone in November and expect them to buy from you. The reason youget holiday business is because you've been there for them in March and inAugust." He cites an "evolutionary" process that has changed thewholesaler-client relationship. "In my world, you can't just sell a diamond,"he says, noting that offering value-added services has become more of anecessity over the last four to five years. RDI hosts an in-house buying eventseveral times a year, where it holds information roundtables to educate itsclients. The company also gives jewelers pre-written postcards to send to theircustomers, containing the jewelers' store addresses and asking what type ofdiamonds the recipients would like to buy."You have to be creative in the services you provide yourclients. It is a way of building trust and loyalty that is beneficial to bothpartners," Rickard points out. Finger on the consumer pulseKnowing consumer preferences is also helpful to thewholesaler-client relationship, since it keeps suppliers attuned to whatretailers are likely to order. "You have to understand your retailers' needs, much in thesame way they need to understand their customers," says VanderLinden. "Therewill always be differences in jewelry preferences from region to region andeven from city to city. None of that is wrong. But you're only right when youare giving them what they want." Kitsinian is taking those efforts to a new level: In severalmonths, he plans to open a flagship retail store of his own, which will givehim firsthand insight into what consumers are buying. "We want to have a pulseon what's going on. We want to see for ourselves what people like and not waitfor our jewelry store clients to tell us." Partnering with designers on new collections is anothertactic, one that VanderLinden says holds "great creative opportunities." Ithelps that the Diamond Producers Association (DPA) is "advertising andmarketing diamonds again the way De Beers did years ago, before they stopped,"he adds. He also believes the ability to customize jewelry will help encouragesales: "Jewelry is very personal - and personal is what it is all about."This article was first published in the October 2018 issue of Rapaport Magazine.Image: Diamond jewelry. (Shutterstock)