By Frank Dallahan
This past week (December 6th) AGTA Gem Fair announced it would move from the JCK Show in 2019 to the Las Vegas Convention Center (LVCC). Within a day or two of the announcement JCK announced they would replace the AGTA space by soliciting other gemstone dealers presumably from around the world to fill the space. A few days later the U.S. Antique Show announced it will continue to exhibit at the LVCC and intends to co-locate there with AGTA. What will come in the days ahead will be interesting to see.
“Those who fail to learn from history are condemned to repeat it” is a quotation of George Santana and it is so appropriate in this current circumstance. The history to which I refer is the story of the origination of the JCK Show in Las Vegas and the circumstances that resulted in the industry’s major show developing in Las Vegas moving from New York City.
In the late eighties, Jewelers of America owned the show in New York. Their show was the big one and was held at the Javits Center. If you were to ask the exhibitors of the JA Show then, you would get an extensive list of complaints. Show management did not listen to the exhibitors. The timing of the shows (Spring and Fall) was all-wrong. The spring show was too early (January) and the fall show (July/August) was too late. There was an arrogance connected with individuals who ran the show. They didn’t listen and treated many with distain and you might even say with disrespect. A take it or leave it attitude probably characterizes it best.
In this environment Charles Bond, Publisher of JCK Magazine and the current Co-Publisher of The Retail Jeweler, Ed Coyne, presented to Chilton Management (JCK’s parent company at the time) the idea of starting a new show for the industry located in Las Vegas at a time of the year more suited to the industry’s needs in late May/early June. JCK needed the financial clout of Chilton to deal with the Las Vegas convention site and hotels for the necessary room blocks. JCK’s management and staff went to the trade to solicit their opinions of the idea.
At the time, I was vice-president of marketing for Krementz & Co, and was contacted by my space rep Joy Englebert to solicit my opinion of the idea of a new show in Las Vegas and in late May/early June. My response apparently mirrored the reaction Joy received from her other clients. She was literally shocked with the responses she received and couldn’t believe the depth of animosity toward the JA Show and particularly the show’s management.
JCK announced the dates of the show and the reaction from most of the “industry experts” was the show would not succeed. To the contrary, The JCK Show became the industry’s new leader after several years.
Charles Bond established an advisory board of manufacturers and retailers to discuss plans for the show. We met periodically throughout the year to discuss plans, ideas, and problems. It was a good group. They were forthright and not bashful about expressing their opinions. The result of their meetings was a good show that became better and better. Bond’s goal was to have a show where all were welcome.
Reed Elsevier acquired Chilton. And, gradually, Reed imposed its will on the show and show management. As with most corporate entities, this pressure from above eventually resulted in the departure of many of the people who had managed the transition and indeed adapted to the jewelry industry. Dave Bonaparte and John Tierney are two prominent examples of personnel who left Reed.
The current AGTA – JCK situation is the result of Reed not listening to the realities of today’s jewelry business similar to what JA did in the late eighties. I know the current key people at Reed and I know they understand the industry’s situation. Reed’s decision to raise prices by 45% on booth space and layer on top of that a 6.5% annual increase locked in for three years clearly indicates a lack of understanding and a lack of common sense.
The rest of the industry is talking about AGTA’s decision to leave the JCK Show after a year’s effort to negotiate a more reasonable deal all to no avail. If AGTA can successfully leave will other groups now consider the same decision and join AGTA at LVCC? Exhibitors, large and small, think the cost of exhibiting has gotten well out of hand. Retailers, too, evaluate the cost of sending their buying staffs to Las Vegas for the show. Their reaction will also be interesting to watch.
Shows make a great deal of sense for both retailers and exhibitors. Buyers and sellers come to shows to see new products, hear about new programs and talk with principals of their respective suppliers and clients in a safe business environment. This is unchanged from 25 years ago.
However, looking at the shows you can see significant changes have taken place since 1992 when JCK first took place. Many of these changes involve significant cost components. The question is are these cost components worth it or are they just revenue generating ideas for the show management companies? The answer is AGTA chose to say No Mas. The more things change…the more they stay the same.
By the time you read this, you will be a week or so away from travelling to the shows in Las Vegas. 1993 seems an eon ago when JCK began the westward migration of the industry show circuit to Las Vegas. The industry since then changed considerably on both sides of the sales counter. The Internet was just starting to be used for email if indeed your company had email. Today, a frequent topic of conversation and strategic thought is given to the use of the Internet to actually do business.
The manufacturing community was largely domestic and manufacturers were just beginning to form relationships with manufacturers in Hong Kong and India. Today, the domestic jewelry manufacturers are a much smaller segment of the business as the Chinese and the Indians have taken over more and more of the manufacturing function.
Then, DeBeers was a marketing powerhouse driving demand for diamonds through various programs geared to both consumers and the trade including both manufacturers and retailers. DeBeers advertising was heavy in print gearing itself to both the bridal and the post bridal markets. Their television advertising was compelling and persuasive for so many diamond products – The Tennis Bracelet, The Three Stone Ring (Yesterday, Today, and Tomorrow), theTwenty-fifth Anniversary Diamond, and the Diamond Anniversary Ring. DeBeers also initiated the notion of how much to spend for the purchase of a diamond engagement ring by relating it to so many months salary to be allocated for the diamond engagement ring.
The Diamond Promotion Service was the DeBeers entity charged with personally communicating the DeBeers message and training directly to jewelry retailers throughout the U.S. The DPS was an actual sales team charged with selling the DeBeers message programs and products to retail jewelers. Today, no one leads the parade extolling the diamond’s significance, and value to the marketplace either at the consumer or trade levels. The DPS is gone. There has been no new product developed and sold successfully save the current two stone diamond ring now being advertised by Jarrod. The jury is out on the appeal and results of this concept. For my money, Yesterday, Today, and tomorrow was a much stronger concept.
Today, we have man-made diamonds made in factories, turning the story of the diamond as a symbol of love to one of man-made diamonds being a better ecological choice than diamonds mined from the earth, presumably playing on the Millennials’ desire, demand, and preference for more acceptable green products.
And, speaking of Millennials, their counterparts in 1993 were significantly different than today’s consumers. Brides and grooms were younger and less well educated. Today,they are better educated, many with graduate degrees for both the bride and the groom.For wedding information they read Brides and Modern Bride. Today, it’s The Knot.
In 1993, an ounce of gold sold for $393 per troy ounce. Today it is $1257. Silver sold for $4.30 per troy ounce in 1993. Today it is $16.80. Platinum sold for $375 per troy ounce. Today, platinum sells for $925 per troy ounce. These increases in precious metals prices have had a significant impact on the retail prices of jewelry products and consequently sales of gold, silver, and platinum are also seriously affected. Of perhaps greater importance perhaps, is the effect precious metal pricing has on product design and development over this 24-year period. It stands to reason that the unit sales of jewelry are impacted with these price movements. Is it any wonder that wedding rings, as an example, are now offered in different metals such as titanium in order to keep prices at what is perceived to be an affordable level.
Is it any wonder that retail sales of silver jewelry have literally gone through the roof as the price of gold has nearly tripled since 1993! Similarly, silver product design has moved from lightweight to more generously weighted product.
Platinum seems to be squarely anchored in the bridal market for engagement rings and to a lesser degree men’s wedding rings,
This little trip down memory lane has a point. According to the Department of the Census, retail sales of jewelry in jewelry, luggage, and leather stores plus the separate category of only jewelry stores (who knows why there are two such categories of retailers selling jewelry?), sales amounted to $34 billion in 1993. In the latest period (2015) sales were $65.7 billion. While total retail sales from every category amounted to $1.235 trillion in Q4 of 2016, e-commerce sellers accounted for 8.3% of sales up nicely from 2015’s share of 7.6%.
Despite the somewhat hysterical, ominous warnings some forecast, consumers still continue to patronize retailers. The analogy of television’s impact on radio, it seems to me, is applicable to the retail vs. the Internet story. The Internet will gain market share over time even in jewelry just as QVC and HSN grew, as did jewelry retail sales grew.
Focus on your business. Focus on customer service. Focus on the products you sell. Decide which market segments where you place your focus. And most of all communicate with your target markets every way you can. It worked then and it works now!