The Vegas Promise

With just a couple of weeks to the important Las Vegas trade shows, preparations are in high gear around the globe. The hopes people have for it are big because the need to generate a higher turnover is pressing.

Exhibitors and attendees are filling their calendars with meetings, setting time aside to hear presentations, planning their strategies, and working on implementing their marketing plans. All efforts are directed at generating more business.

Further up the pipeline, stocking of rough diamonds has slowed down significantly these past few days, and premiums on goods are very small. Polishing is not at full steam or capacity because demand for polished diamonds is lackluster: enough demand to have some business, but not enough to allow a decent return, let alone price increases.

Remember, with very narrow margins, polished diamond wholesaling is a game of volume. Low volume is suffocating.

The hope for increased business is based on good retail sales. In the U.S., the market for which the Las Vegas shows are catering, specialty jewelry retailers had sales of nearly $7 billion in the first quarter of the year, an increase of 8.8 percent year-over-year. The encouraging results look especially good because the increase is outpacing general retail sales growth in the U.S. The declining price of gold provides a further boost to the rationale that business should improve.

How to Reconcile Contradicting Results
With good retail results in the U.S., how is it possible that suppliers are reporting dull sales? First, there is an element of expectations. Wholesalers need better results and without them the worries increase. Retailers are constantly concerned that the economy will sink and, consequently, are curbing their expenses. The combination of the two provides the dichotomy of good retail sales and uninspiring wholesale trade.

Retailers are reluctant to play with price points and therefore unwilling to pay more for the goods. Being prudent at times of uncertainty makes sense, but should not stand in the way of forward thinking.

The aim therefore should be focused on volume. Buyers and sellers meeting in Las Vegas should aspire to this middle ground – buy more, but at reasonable prices. And all should think long term – join forces in marketing efforts intended at bringing consumers into the stores.

The JCK Las Vegas show is a great occasion to rejuvenate business. It's important not to miss this opportunity; too much is on the line.

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