Rapaport Magazine - December 2018

VOL. 41 NO. 12 DECEMBER 2018

PUSH YOUR MESSAGE

MAKING YOUR PRESENCE KNOWN THROUGH OMNI-CHANNEL MARKETING ANALYSIS

INTERVIEW

STYLE

GEMSTONE

EVERYTHING YOU NEED TO KNOW ABOUT DIAMOND CRYPTOCURRENCIES

STEVE COE OF LIGHTBOX SHARES WHAT’S NEXT FOR THE LAB-GROWN BRAND

JEWELRY WATCHES COMBINE GLAMOUR AND MECHANICAL PROWESS

2019 TRENDS, FROM CASUAL COUTURE TO A LOVE OF ALL THINGS BLUE

Note from the publisher

IMAGE: BEN KELMER

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BELIEVING IN NATURAL MAGIC

hat is the added value, the magic, you bring to the customer? That is a question anyone selling a luxury product or service should constantly be asking themselves.

If you cannot identify the value or magic, you should worry, because business will eventually pass you by. Those operating in the melee market should particularly pay heed, as this segment of the natural-diamond industry is currently in crisis.

The poor performance of small and cheaper stones has been one of the standout trends of 2018, Rapaport Senior Analyst Avi Krawitz wrote in the November edition of the Rapaport Research Report. While oversupply and liquidity problems caused by a more cautious approach from banks in the main melee market of India have played a part, “some retailers are shying away from natural melee because of the threat of undisclosed synthetics,” he noted. This is a worrying trend.

If retailers believe that keeping melee kosher has become so problematic and/or costly that they are simply “shying away from it,” the impact on our industry will be dramatic. The key question is: Will this pollution of the natural-diamond market

with synthetic stones ultimately destroy the naturalmelee sector? And — more importantly — do consumers ultimately care?

If we cannot point to the added value and magic that natural stones bring to the melee market as an industry, should we concede defeat? And if we do, where does it stop?

The destruction of the natural-melee segment would send shockwaves through the industry in India, which relies on the small-stone market to maintain its factories and workers. Ensuring this sector is not oversupplied and remains profitable is essential if we are to avoid synthetic stones simply becoming an alternative to small natural diamonds. The magical brilliance of a billion years of history should never be downgraded to the cheap glitter of industrially manufactured stones. That is a point we as an industry should never concede.

John Costello PUBLISHER john.costello@diamonds.net DIAMONDS.NET

DECEMBER 2018 13

CO N T E N TS COVER 28 Adapting your ad game How can retailers make the most of their marketing budget in an omni-channel world?

RETAIL

48 Page

34 Retail profile An ambience of comfort and class is the signature style of Fakier Jewelers in Houma, Louisiana.

36 Retail insight Offering a custom experience at your store is a powerful way to woo clients.

39 RetailRap What are your e-commerce campaigns for the holidays?

MARKETS & PRICING 53 Trade report 55 USA 60 India 63 Israel 65 Antwerp 66 Hong Kong 68 Diamond data 73 Price List 85 RapNet price list 90 Directory 94 Calendar 96 The final cut

STYLE & DESIGN

42 Page

41 Jewelry Connoisseur Wing motifs imbue jewelry with grace and symbolism.

IMAGES: MUSEUM OF FINE ARTS, BOSTON; LISBON MUSEU CALOUSTE, GULBENKIAN

42 Book review

IN-DEPTH

Alba Cappellieri traces the transformation of craftsmanship over the last century.

16 News

44 Style

Industry: Time to redefine conflict diamonds.

Retail: Synthetics go mainstream.

Mining: Rough prices decline.

Movers & shakers: Who’s coming, who’s going.

Gem-studded jewelry watches dial up the glamour while maintaining mechanical elegance.

46 Designer

24 News analysis

Bliss Lau combines the visual and experiential in her vivid, interactive works.

Leveraging diamonds in the cryptocurrency space.

48 Legacy

26 Interview Lightbox managing director Steve Coe talks about what’s next for the project.

32 Gems of wisdom A guide to using blockchain to improve your business.

A new exhibition explores how Boston put its own spin on early 20th-century jewelry and metalwork.

50 Colored gemstone The most popular shades and stones for 2019 reflect America’s love of casual couture and an affinity for blue.

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COV E R

How can retailers make the most of their marketing budgets in an omni-channel world? By Lara Ewen ven the most stalwart jewelryindustry traditionalists will concede that digital has significantly changed the marketing game. Print, radio, billboard and television were once the foundation of every campaign.

These days, though, there’s more to it. Instagram, Facebook, email blasts, geotargeting, Yelp reviews, and climbing to the top of Google’s search engine results compete for the attention — and ad dollars — of every retailer. But figuring out how to optimize a limited marketing budget can be challenging.

Out with the old? Not yet For stores that still rely on traditional media, the experts have some good news.

“Traditional advertising has absolutely not run its course,” says Ellen Fruchtman, president of Toledo, Ohio-based Fruchtman Marketing, which specializes in the jewelry industry.

“Digital, albeit important in today’s overall strategy, is simply one piece of the marketing puzzle. And one size does not fit all.”

For example, she continues, while younger bridal customers may lean more toward digital, the over-45 fashion customer is still keen on traditional channels.

It’s not just about age, either. Certain markets are better suited to one approach than another.

“Traditional media is still extremely effective when used correctly,” says Bruce Freshley, CEO of South Carolina-based Freshley Media, a multimedia marketing agency that works with jewelers. “In Los Angeles, radio isn’t effective, because it’s too expensive. But in a lot of our markets, radio still delivers people into the store.”

H. Bredemeier, owner of H & H Jewels in Coconut Grove, Florida, takes a holistic approach. “You have to do everything,” he says. “We do a print catalog and print mailers, and a lot of Instagram, and Facebook, plus events and lots of billboards, which we did until the hurricane last year. And we’ve been doing radio, which we just started, because older markets aren’t so much into Instagram.”

Julie Gotz, director of digital marketing at Freshley, agrees that for stores that can afford it, it’s best to cover as many bases as possible.

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“TRADITIONAL MEDIA IS STILL EXTREMELY EFFECTIVE WHEN USED CORRECTLY”

“Digital is no longer optional,” she says. “It’s something you must be putting into your marketing plans. In an ideal perspective, you have multiple mediums working together, including billboards, print, radio and digital. Is that the case for every store? No, because budgets can’t support it. But ideally, it’s all working together.”

The devil’s in the data Stores concerned about transitioning to digital should first take a good, hard look at their current customer base.

Greg Furman, founder and chairman of the Luxury Marketing Council, says any marketing campaign, whether digital or traditional, starts with a rigorous approach to understanding customers.

“Before a store transitions to digital, it has to determine how sophisticated its ability to track and target its existing customer base is,” says Furman. “Stores have to be able to segment customers before they can transition, and family-run businesses don’t always do a great job of that. But if you haven’t segmented your customers and don’t know them in depth, then transitioning to digital means you’ll be in the same soup you’re already in.”

That starts with a well-developed and smoothly functioning database, according to Gotz.

“There are now many ways to keep in touch with customers,” she says. “If a store has a database of existing customers, it can 30 D E C E M B E R 2 0 1 8

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target ads to them digitally. Digital marketing doesn’t mean stores are losing touch with customers. If anything, stores are growing their connections.”

To pay or not to pay: The ROI question One of the biggest pushbacks from retailers regarding any form of digital marketing is that it’s hard for them to see a return on investment (ROI), so paying for a digital campaign is difficult to justify. But Fruchtman claims digital is not only worth the cost, it’s a relative bargain.

“The only way to push your message out on Facebook or Instagram is to pay for it,” she maintains. “That being said, it is one of the most cost-efficient [forms of] advertising you can do.”

She also emphasizes the importance of getting a professional involved. “Marketing is not for amateurs,” she states. “It’s far too complicated today. Would you send your first-day employee out on the floor to sell to the wealthiest person in your city?

Same thing.”

Gotz says any successful digital strategy is a combination of advertising-agency intelligence and retailers putting in their own elbow grease. “It’s important for stores to manage the content of their pages and interact with their customers on a daily basis,” she says. “Where you need to bring in experts is when you’re doing social media advertising campaigns.

Everybody thinks they’re a social media expert, but just because

you’re posting to Instagram does not make you an expert. And for strategic advertising plans, that’s something you can’t just do on your lunch break.”

To each region its own Stores also need to know their own region and advocate for strategies that make sense, regardless of what an agency or brand partner is suggesting.

“When we speak with our brand partners, many of [our online] views are from parts of Europe where they do not use out-of-home advertising such as billboards,” says Betty Guerra, director of integrated marketing at Zadok Jewelers in Houston, Texas. “[Those brand partners then] try to persuade us to cut billboards from our co-op plans. But we know our region best.

We’re fortunate enough to hear customer feedback such as, ‘I saw you carry X brand from your billboard and drove right in,’ and we have the sales to prove it.”

Guerra has also found that younger men who listen to sports radio, where she advertises year round, will tell her sales staff that’s how they found her store. “The proof is in the pudding,” she says.

But digital has a place, too, especially with self-purchasing customers, she adds. “Digital is a great platform for the watch geeks and strong, independent women.”

The informed customer Nowadays, it’s practically impossible to find a customer who hasn’t been exposed to digital marketing in one form or another, notes Furman, and that means retailers that don’t want to

engage that way will be affected. “Very few buyers — including boomers — make a purchase anymore now without coming to that purchase informed from online research,” he says. “They know the price points, value differentiators and research, and they come loaded with information. They’re as informed as the sales staff.”

That means stores need to step up, he continues, whether they want to or not. “Digital is forcing the retailers’ hand. You have to be honest and intelligent in terms of price, value, and even other jewelers, and you have to be able to have a human conversation without being defensive. Digital puts it all on the line as soon as a customer walks in the door.” ◼

“FOR STRATEGIC ADVERTISING PLANS, THAT’S SOMETHING YOU CAN’T JUST DO ON YOUR LUNCH BREAK”

TARGET AND CONNECT: SHYNE JEWELERS

IMAGE: SHUTTERSTOCK

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ith over 297,000 Instagram followers, 41,000 monthly Pinterest views, and almost 50,000 Facebook likes, Shyne Jewelers in Philadelphia, Pennsylvania, has built up an enviable social media presence.

The eight-year-old store has always been digitally focused, and marketing manager Jorge Rodriguez says the return on investment is the main reason. “We’ve done some traditional marketing, but there’s no way to quantify those results. With digital, I can tell you right away if something is working, and we don’t have to commit to a six-month campaign.”

Traditional media such as billboards, print campaigns and radio don’t let Rodriguez track or understand his customer base. “But digital allows me to pinpoint exactly where my customer came from and how I should interact with them in the future. I can find out who my customers are, where they live, what they look at online. I can’t target a customer like that through traditional marketing.”

His efforts have paid off, too. “Since I started [three-and-ahalf years ago], we’ve seen an increase in organic traffic, both with the physical store and online,” he reports. “And we get people from all walks of life.”

Although his core customers are men aged 18 to mid-30s, Shyne serves everyone from engagement customers to musicians who want custom work.

For stores looking to increase their digital presence, Rodriguez has a little advice.

“Don’t be afraid to show the behind-the-scenes of your business,” he says. “Most jewelers who get Instagram wrong are focusing on product pictures with a white background and a silhouetted item. But that doesn’t let your customers know who you are as a business.”

Instead, he stresses, it’s important to make a deeper connection. “We use it to show who we are and what we stand for. That’s way more important and way more engaging.” ◼

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RETAI L RAP

WHAT ARE YOUR E-COMMERCE CAMPAIGNS FOR THE HOLIDAYS? Two jewelers have inventive ways to maximize traffic on their websites.

By Phyllis Schiller GEORGE FRITZ OWNER, MILLS JEWELRY LOCKPORT, NEW YORK

“We have quite a list of customers who have moved out of our area to warmer climates, and they love us, so why not encourage them to shop with us?”

We have started an e-commerce campaign this year, for the first time ever.

Basically, what we did was send a direct-mail piece to all of our customers who have moved out of the area, with an incentive for them to go onto our website. The idea was to encourage them to still use the hometown jeweler they’ve known and loved, even though they’ve moved away, and still shop with us. As an incentive, they get a code they can put in at checkout that will give them 20% off their purchase.

“Last year, we did have e-commerce set up, but we really didn’t sell a lot off of it. Anyone who does buy off our website is from out of state. The more local customers will go to the website, but then they’ll come into the store so they can touch and feel the product before they purchase it.

“Everything that we send out by email, all our literature and receipts, has our website on it, as does our Facebook page and Instagram account. We always have links to [our website page for] the item that we’re promoting on those accounts.... We also send out emails and direct-mail pieces to anyone having a birthday or anniversary. This year, we’re adding an online code that they can use to get a discount. It’s still very rare that we get a sale on our website. But we’re hoping that it might change this year with this campaign and add a little bit of extra income.

JOHN HENNE OWNER, HENNE JEWELERS PITTSBURGH, PENNSYLVANIA We launched an e-commerce website about a year ago. And we are investing more significantly in digital marketing. Personally, I was not in favor of AdWords, but we have actually been doing that.

“For the holidays, we started a campaign/contest in early November, where people filled out an online wish list in order to be eligible for a prize of $1,000 toward buying anything on their wish list. And it had a really good early response. We marketed the contest via an e-blast and on our website, as well as in-store.

“We decided to run the contest in advance of the holiday, all through November.... We’re hoping that it will generate an interest in people to prepare a wish list for the holidays. Then their loved ones or significant others can check our website and find out what they want for the holidays.

“We had an outside marketing firm set it up, and we have an internal marketing person who helped organize it. Frankly, we need some training still to be able to operate it effectively. Our goal eventually will be that if someone contacts us and says, ‘My wife has a wish list,’ we can call it up.

“Right now, we have an internal wish list within our own [point-of-sale] system, but it’s separate from the online wish list because that is on our website, and they’re not integrated. I wish they were.

It’s something that eventually we want to be able to run smoothly from the store.

We do imagine people coming in the store and asking about their spouses’ wish lists that are online.

“The contest went up in the beginning of November. The developers were excited by the response. It exceeded their hopes, and they had high hopes for it. So overall, we’ve been very pleased.”

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