In the rapidly changing environment of the past six years many jewelry suppliers have experienced difficulties, and even gone out of business. In these challenging times Gems One has not only survived, but thrived. Understanding the story of how Gems One evolved to meet the difficulties of a post-recessionary world, in which a tepid recovery has placed increasing pressures on the entire fine jewelry supply chain, provides beneficial insights for many in the jewelry business.
“We were stuck”, says Prem Jain, who founded the company in 1978. “Our sales had risen to a maximum level in 2004, but from 2005 to 2007 we found ourselves bumping up against the same revenue ceiling. We knew we needed to consider how to serve our customers’ needs in a new way, but frankly, we weren’t sure what direction to take.”
While always adhering to a set of core principles, Gems One had nevertheless successfully transitioned through a series of major shifts during its first 30 years. The company went from a small Midwestern supplier of loose gemstones, changing into manufacturing and supplying complete products, and then into bridal and higher grade diamond products.
The company had also moved its primary operations center from Dayton, Ohio, (its original location) to Manhattan. And, as Prem’s son Anuj entered the business in the early 1990s, over the next decade he had taken over day-to-day operations while Gems One expanded its core businesses. But by the mid-2000s, it was becoming clear that future growth required a shift in focus.
“We were making a great product,” says Anuj Jain, president of Gems One. “Our customers were happy, and we had successfully transitioned into a comfort zone where we had a strong customer base that was actively buying and selling our wide product line, but we were no longer growing. My father and I had a series of discussions at that time about how to reach our longer term goals, and take our business to the next level, and we needed to start providing marketing support for our customers.”
In order to accomplish this objective, Gems One hired George Prout in January of 2008 as the company’s vice president of sales and marketing. His first initiative was a major one: adapting Gems One’s retailer-centric focus by adding a consumer-centric element, and creating the products, programs, and services with marketing support platforms that their customers needed for success.
“We had to start thinking less like a jewelry manufacturer, and more like a retailer,” says George. “Our customers didn’t just need good products and good customer service, but also innovative complete business solutions to help them compete in a very difficult, highly competitive environment.”
The change came at a good time for Gems One, but had a bad timing element with the nation’s economy in shambles after the housing market crash. Revenues for many US jewelers shrank by 35 percent in the fourth quarter of 2008. With lower consumer buying power Gems One had to reexamine their product lines, and move from higher end diamond and precious colored stone jewelry to what consumers wanted to own and could afford to buy.
“While sales of our historically important higher end products temporarily declined, we were squarely on target with a new assortment that was exactly what the post-recessionary consumer wanted to buy, with the added benefit that our customers could turn these new categories four to five times per year,” says George.
In addition to affecting the spending threshold of consumer jewelry purchases, the “great recession” also had a deep impact on sales reps. Jewelry designers and manufacturers were paring down and even eliminating their sales force. Being a tight-knit group, word got out about Gems One’s new merchandise and marketing support mix. Many road reps wanted to be part of Gems One’s momentous shift. According to George, “The recession actually helped us, because it made top shelf sales reps available, allowing us to build one of the best sales teams in the industry.”
With a sales force that could properly articulate Gems One’s marketing initiatives, the company has more than tripled its customer base. “Every time we embark on a new initiative, or roll out a new branded collection, we now have the ability to reach critical mass quickly,” says Anuj.
Today, innovative marketing solutions have taken the form of everything from flyers and special events to social media campaigns, as well as the launch of new products and inventive programs to maintain relevance with consumers – even after peak spending periods.
This includes a new gift card redemption program that will be launched right after Christmas this year. Roughly 70 percent of Americans receive gift cards at Christmas, and there are more than $100 billion of active gift cards at any time. Through a dedicated internet portal, this post-Christmas marketing opportunity has tremendous potential.
Fresh approaches to jewelry designs that target consumer tastes and trends are also part of Gems One’s new core strategy, and part of the reason for the change of the company’s tag line to “Knowing What’s Next.” Most notable was bringing Rhythm of Love diamond jewelry to market last spring (launched at the April 2013 SMART Jewelry Show in Chicago) and this year’s Contoura (a patented new wedding band that automatically contours to fit most engagement rings), which rolled out at the June 2014 JCK Las Vegas Show.
|Gems One’s Rhythm of Love vibrating diamond line is an example of the company’s ability to identify and quickly act on breaking jewelry trends.|
Identifying breaking jewelry trends and developing cutting-edge marketing support has become Gems One’s niche in the industry. In March 2013, while making his annual visit to the Hong Kong Jewelry Show, George spotted a special type of diamond setting that allowed a center-set diamond to constantly move with the wearer, and identified it as having the potential to be the industry’s next “three-stone-like” fad.
The movement of the diamond was so sensitive that even the beat of the wearer’s heart could set the center stone in motion. And with that discovery, Rhythm of Love jewelry was born, and so was its marketing campaign.
By the April 2013 SMART Jewelry Show, Gems One unveiled the new moving diamond jewelry to retailers. The reaction was phenomenal. “Every Christmas customers want the latest in diamond jewelry and we gave it to them last year,” says Jim Langolf, owner of Alexander’s Fine Jewelers in Fort Gratiot, MI. “Interest in Rhythm of Love jewelry was off the charts and performed very well at Christmas, helping us achieve better Christmas and year-end sales.”
Early on, Gems One knew it would only be a matter of time before the major retail jewelry chains and better department stores claimed moving diamond jewelry for their own, with massive marketing budgets independents couldn’t match. In the lead up to 2013 JCK Las Vegas Show Gems One needed to develop a marketing program putting independent jewelers in the driver’s seat.
With the help of social media management firm Collected Concepts, new retail customers that signed on with Rhythm of Love during the June trade show received a complementary comprehensive social media program. This included a video of store owners talking about the product at Gems One’s Luxury booth, asking consumers to submit images and romantic stories that “made hearts beat faster.”
“The social media program worked extremely well,” says George. “Retailers with existing social media success augmented their fan base. Store owners who were looking to do more with their Facebook store accounts got a sudden jolt of interest with a fun, interactive contest that really put these stores on the social media map in their market.”
The results of Gems One’s approach can be measured in many ways. Of the Edge Retail Academy’s top-15 selling SKUs for Christmas 2013, 13 came from Gems One. And, based on the Edge Retail Academy’s KPI (Key Performance Indicators) report, Gems One is the number-three vendor (after Pandora and Hearts On Fire) in the 250 retail stores that are Academy clients.
“The results from the shift in Gems One’s approach over the past seven years can be seen in a variety of ways, like our ranking on the Edge Retail Academy vendor list, or the growth in our print materials from a couple hundred thousand to well over 12 million, or even our position in most of the stores we service as one of the top three vendors by volume,” says Anuj. “But for my Dad, it’s all about the smile on our customers’ faces when they talk about their relationship with Gems One, and the impact we’ve made on their companies and on their lives.”