QVC

Comments by Jeff Taraschi, senior vice-president for jewelry merchandising for QVC of West Chester, Pennsylvania. Speech delivered by WGC Claudio Pagani at VicenzaOro I.

            QVC, standing for quality, value and convenience, is a national company and is visible in over fifty million homes in the United States. In addition, we have subsidiaries in Mexico and Latin America, the UK and shortly, in the Netherlands and Norway.

            We know that our customers watch our broadcast for a significant period of time before they decide to purchase from us the first time. After they purchase from us once, they are very likely to become repeat customers.

            Our customers have to decide that they are willing to buy without the ability to physically touch or examine the merchandise before they purchase it. Their first actual contact occurs when the item arrives in their home. This is why QVC is obsessed with providing the consumer with the highest levels of quality.

            If an item does not meet our quality standards for size, dimension, functionality and finish, we reject it and return it to the manufacturer, I urge you to understand we run our business as though the consumer will not buy from us again if we disappoint them.

            I urge you to understand we run our business as though the consumer will not buy from us again if we disappoint them.

            We only offer for sale items that we own in our inventory. If an item does not arrive on time or is not in saleable condition, we will not present that item to our customers. When you consider that we only present tem items for sale in one hour of broadcasting, you can understand the importance of each item in achieving our business objectives.

            Information is our most valuable asset. QVC is able to explain our merchandise far better than our competition and in the process create a higher perception of value and a better understanding of the product.

            Gold jewelry is our single most important commodity at QVC.

            We sell 14k, 18k and 24k jewelry. We provide a broad assortment of necklaces, bracelets, earrings, rings and pendants and our product mix consists of retail price points from $50 to $3,500. To satisfy this, QVC is constantly searching for new products, new designers and quality manufacturers.

Saks Fifth Avenue

Presented by Carolyn Kelly, fine jewelry buyer for Saks of New York.

            The good news is that there is a very strong market at the high-end. Over the past three years, the high-end gold jewelry business has experienced double digit increases year after year. It is understood that the product will be of the finest manufacture and that quality control is not an issue. In the rare situation of repairs, it is expected that it will be taken care of without a problem.

            Today the American customer in the high-end market is younger and far more casual in lifestyle. They are not concerned about price, but they place great emphasis on quality. Gone are the days of opulent, showy jewelry. Today’s consumer wants jewelry that can be worn day to evening. The pieces must be tailored enough for the office and dressy enough for a dimmer party.

            Rarely am I asked: “What does it weigh?” or “What is the price per gram?” But often I am asked: “Is the jewelry a limited edition?,” “Are there other pieces in the collection?” and “ Where else is it available?”

            So what does all of this mean to the manufacturer? First, be clear on your methods of distribution. The less points of distribution, the more attractive it is to the high-end retailer.

            If you choose to deal with an American importer, set the ground rules for your distribution. Make sure you have the same goals and objectives. Ultimately, the retailer will hold you, the manufacturer, accountable if your merchandise ends up with a questionable retailer.

            The high-end business is non-promotional. Though prices are often negotiated, advertised, deep discounts are rare. Be prepared to invest some money in the marketing. Each situation may vary, but it is a common practice in the US to support retailers with advertising allowances.

            Next is production. Know what your capacity is and do not promise what you cannot deliver. A late delivery is often as bad as no delivery at all.

            When I select a product it is by collection, rather than by classification or item. Many times I will merchandise a suite: necklace, bracelet, earrings and ring with the expectation that the entire group will be sold to one customer. If I am lucky, it will happen all at once, but more often it is purchased piece by piece over a calendar year.

            Though it is always the goal to find something new or different, the bottom line is that classic merchandise is the sure sell. When the customer is spending a significant amount of money, the expectation is that the piece is timeless.

            The higher-end market works much closer to the season. Marketing is done during the current season and changes happen quickly. A two month lead time on purchasing and advertising is normal.

            Gone are the days of opulent, showy jewelry. Today’s consumer wants jewelry that can be worn day to evening.

Ben bridge jewelers

Scott Sedlacek, vice president and merchandise manager for Ben Bridge Jewelers of Seattle, Washington talks from the point of view of a traditional jewelry store manager on the strengths of today’s mid-market customer.

            The US market is the most complex, competitive and diversified market in the world. Our competitors are often thought to be other retail jewelry stores, but this is just the stereotype you must avoid to sell the American retailer.

            American customers are overwhelmed with choices of where and on what to spend their disposable income and fine jewelry is only one among thousands of appealing alternatives. If fact, our biggest competitors are not other jewelry retailers but are the leisure travel and electronic industries.

            In order for Ben Bridge to succeed in the high pressure marketplace we must not only offer this consumer an exceptional number of merchandise choices, but accompany these choices with superior service, a pleasant shopping experience and great value. Anything less will result in the consumer spending their income elsewhere.

            It is the same for you in selling to us.

            Take the time to learn who we are and what we sell. If possible, visit the US and shop at one of our stores. Examine the product selection and how it is displayed and priced. Ask our sales associates what warranties we offer and find out what other services we offer. With this information you will be able to tailor the merchandise presentation to fit our company, or any company that you have targeted and shopped.

            Concentrate on your products—quality, uniqueness and exclusiveness. If you do not have the correct product for us nothing you do will result in making the sale.

            When you have the correct product we must discuss value. Value does not just mean price! We consider value to be total of everything you are offering to us within the actual price of the product. The more appealing value-added items you offer the more likely you are to make the sale.

            For Ben Bridge Jewelers and our 48 retail stores the value added services that we consider most important are product selection, communication, price, minimums, delivery and quality. For Ben Bridge Jewelers these six items are not negotiable.

            Product: Product selection is the quality, uniqueness and exclusiveness that you offer. This is always first and foremost in our selection process.

            Communication: Your ability to communicate with us is extremely important. Being able to answer our questions face to face is just the start. The fax machine is our most common and direct from of communications. Remember that in most American companies you will be communicating with not only the buyer, but with assistant buyers and service representatives, accounts payable personnel and shipping and receiving departments.

            Price: What is your labor price per gram? Can you calculate it quickly in 10k, 14k and 18k? Is there a difference in price for yellow, white, rose or combinations? Are you able to quote the pricing and weights in inches as most American buyers are not comfortable converting metric measurements quickly? What is the loss factor? Are there any other costs involved?

            Minimums: Are the minimums different for an original order, then for reorders? Will the minimums change as our overall business changes? You might be wondering what we are doing here if we are so concerned with the minimums and are possibly thinking that we should be buying from importers if we are unable to purchase enough. Yet that is exactly why the traditional midmarket retailer is here. We can no longer afford to pay the importers’ markup and remain competitive.

            Deliver: When an American retailer gets your promise to deliver your product on a specific date we bank on it. It is vital to us. Be prepared to be honest on delivery dates. Advise us of holidays and factory closings.

            Quality: It is our companies’ hard earned reputation on the line when we sell your company’s products in our stores. The finish must be as originally seen on every order, every time. The findings must work perfectly and be as ordered. The hallmarks and stampings must be as required for US customs and for our representation to our customers. The weight variation must never be over 10 percent and the smaller the better.

            Before I make it sound too simple there are two other points that you must know about the traditional American jewelry store. First, we generally have high costs of doing business due in part to our trained professional sales associates who sell your products one on one to the consumer. These sales associates work in jewelry stores that are expensive to build and maintain. Rents are a substantial cost.

            We can no longer afford to pay the importers’ markup and remain competitive.

            Second, we must convince the consumer that we are offering them the best value for their money. That means that for a $500 gold bracelet we must not only convince the consumer that we have the best value added price on the gold, but it is also a better choice for their $500 than a new television or a vacation trip. In the over retailed, extremely competitive American market our margins have declined and will continue to do so.

            As a result of this business environment we must find ways to be profitable selling your products. We have found that we can do this by selling products that are unique, either due to their value in price of styling. We have also found that we must be able to sell more of your products by increasing sales and merchandise turnover. We must be able to order smaller quantities more often, replace sold items quickly and eliminate the feast or famine syndrome in our inventory levels.