By Marlene A. Prost

Color of all types ruled the fashion scene in 2000, but retail jewelers saw a return to the “Big Three” of blue sapphire, ruby, and emerald, according to a survey conducted by Colored Stone.

Retailers saw a return to the “Big Three” in 2000, especially blue sapphire, which remains the best seller. 11.87-ct. sapphire, photo courtesy ICA/Bart Curren.

Blue sapphire remains number one on the top 10 list of bestsellers, followed by ruby, while emerald knocked tanzanite out of the number-three slot.

Emerald is recovering from its tarnished reputation in the jewelry industry after a spate of negative media attention. The gem's improved performance may be relative, though. A good number of survey participants - 18 percent - still identify it as the stone that has most dropped in popularity over the past year.

Interest in tanzanite, which fell to fifth on the list, is also decreasing, probably due to higher prices and less fine material on the market. It still has a following, however: Almost a third of respondents say tanzanite has grown in popularity, although that figure pales next to 1999's 46 percent.

Other winners were amethyst, back up to fourth after three years in decline, and fancy sapphire, which returned to the top 10 on the strength of the Madagascan pinks.

Gems that have lost strength are opal, which dropped off the list, and pearl, which declined from fifth to ninth.

What attracts customers to colored stones?
66%	Color
12%	Uniqueness of Gem
8%	Quality of Gem
6%	Price
4%	Significance to Buyer
4%	Other

Blue sapphire, on the other hand, can apparently do no wrong. Not only is it still the best-selling colored stone, but 14 percent of retailers say it's getting more popular, while another 24 percent predict it will be in even greater demand next year.

“We've sold quite a bit of sapphire. Maybe it's because the Madagascar stuff is out. . . . Ruby, sapphire, emerald are still the big three, much as I love to sell the other stones,” says Llyn Strelau of Jewels by Design in Calgary, Canada.

“It's not surprising to me [that blue sapphire tops the charts], just judging the number of people who say they love sapphire,” observes Kevin Carpenter of Freeman Jewelers in Rutland, Vermont. Carpenter says his stock is heavily weighted toward sapphire; he has 200 pieces with sapphire compared to 50 to 60 with ruby and 30 to 40 with emerald.

Carat for carat, sapphire is a popular, lower-priced alternative to diamond, continues Carpenter. “If someone wants a big stone that's not five digits, I can show them a fine-quality, three-carat sapphire for three to five thousand [dollars].”

As for emeralds, Carpenter says he is starting to see a “resurgence” after a few slow years, but is cautious about stocking up, replacing only what he sells while he waits for demand to increase.

What makes a stone popular? Most retailers - 38 percent - believe the main factor is whether that color is in vogue, probably reflecting the strong influence of color in today's fashion.

That is a big change from last year, when only 10 percent thought color determined popularity, and 32 percent tied popularity to consumer awareness. This year, only 8 percent considered consumer awareness the biggest factor. When customers are looking for a gemstone, color is what attracts them to buy, said 66 percent. They gave far less weight to factors like the price or the significance to the individual, as with a birthstone.

The public may want color, but there's a gap in awareness about what's available. The gemstone industry must do a better job promoting lesser-known colored stones to consumers, says Strelau. One reason the Big Three does better, he suggests, is that small retailers are reluctant to stock up on exotic stones offered by manufacturers. “Mom and pop retailers and mainstream jewelry stores have salesmen come by [showing them different gems] . . . but they see ruby, sapphire, emerald rings appealing to the [average] clientele. They're going to be a bit hesitant to buy spinel or exotic tourmaline.”

Facing the Discounters

Independent retailers say their customers went for higher price points in 2000, probably because the lower-end market has been taken over by discounters and department stores.

Consumers are continuing to buy more expensive jewelry, said 54 percent of retailers, while only 6 percent found customers were buying lower price points.

The hottest-selling price range is $1,000 to $2,000, said 34 percent, compared to only 18 percent in 1999. And only 18 percent said that the most popular price point is less than $500, compared to 26 percent the year before.

Business is rebounding in the middle price range of $1,000 to $5,000 because of the robust economy, suggests Carpenter. “That's always been the heart of our business. It seemed to be slumping; it's now coming back strong, partly due to more buying power.”

Top Ten Sellers
1998	1999	2000
Blue Sapphire	Blue Sapphire	Blue Sapphire
Ruby	Ruby	Ruby
Emerald	Tanzanite	Emerald
Tanzanite	Emerald	Amethyst
Amethyst	Pearl	Tanzanite
Tourmaline	Tourmaline	Tourmaline
Pearl	Amethyst	Garnet
Fancy Sapphire	Garnet	Fancy Sapphire
Garnet & Blue Topaz	Opal	Pearl
Citrine	Blue Topaz	Blue Topaz

The economy may be doing well for many, but other consumers are “tapped out,” suggests Bob Belica of Atlantis Gems in Denver, Colorado, who has seen a drop in price points among the Denver tourist trade. Some tourist customers, he says, have to go through 10 credit cards to put down a $100 deposit. “A lot of people are overextended. Jewelry is a luxury item they can cut back on.”

Independent retailers seem about ready to concede the low-end market to discount chains and department stores. In fact, low-end discounters are identified as the biggest problem facing the industry today by 24 percent of retailers.

People are clearly going elsewhere to buy their “cheaper” jewelry, says Lois Henry of Dean Jewelers Ltd., Charles City, Iowa. “I think it's worse, because we're getting more and more of [the discounters]. They're more prevalent.”

Discount department stores are not only less expensive, but convenient for shoppers who are in the store already and stop by the jewelry counter. On the positive side, discounters have opened up new markets for colored stones like tanzanite and, before that, blue topaz.

What annoys retailers are the tactics used by discounters, such as artificially hiking and then slashing prices for deep discounts.

Mass merchandisers have to use a hard sell to be competitive in their market niche, says Carpenter. “The tactics push the limit of what's ethical, [such as] an extremely aggressive advertising campaign of 50 to 70 percent off as a means of attracting clients. They use unrealistic selling prices to discount from.”

Independent retailers, in turn, are combating this trend by selling goods that can't be shopped, like high-quality colored gems.

“The market for fine colored stones is less threatened by discounters,” says Strelau. “If you're thinking of selling [low-end] blue topaz, amethyst, and citrine, yes,” but in quality, there's no competition. “Fine Zambian amethyst is going to knock the pants off something else, but a discounter isn't going to carry it.”

Amethyst surged to fourth place among retailers’ favorites in 2000. Platinum, 18K gold, amethyst, and diamond necklace from Michael T. Lane, photo courtesy AGTA/Sky Hall.

Digital Caution

While many American industries are rushing into e-business, retail jewelers, who have built their reputations on personal service, are approaching the Internet one click at a time.

They clearly have the technology: 76 percent use the Internet, 64 percent have Web sites, and 62 percent use e-mail in business. But they aren't using it for e-business. Only 22 percent sell jewelry online; of those, none reported doing more than 5 percent of their sales via the Internet.

Atlantis Gems' Belica is typical of retailers who keep it simple. He has a Web site, but it hasn't been maintained. He uses eBay “in spurts,” posting $200 to $300 items because above that, “people get suspicious.”

Ruby remained at number two in 2000, affirming that jewelry customers continue to want the classics. Platinum, 18K gold, ruby, and diamond ring from the Platinum Blond collection by Le Vian.

For retailers who aren't interested in doing it themselves, one new option is joining Enjewel, an online network of manufacturers and retailers that matches customers, designer lines, and dealers.

“We tie the retailers into the e-commerce sale,” says Krista Olson, director of affiliate relations for Enjewel L.L.C., which has offices in New York and San Diego, California. The site was launched in early October, and within a month, it had about 105 jewelry manufacturers and designers, such as Lagos of Philadelphia, Jose Hess of New York, and Honora of New York, as well as over 270 participating retailer jewelers.

Customers can log onto Enjewel in three ways: By going directly onto the Web site (www.enjewel.com); through the manufacturer's Web site; or through the Web site of the participating affiliate retailer, who then becomes the customer's “personal jeweler.” When a customer purchases an item, he or she is referred automatically to a local affiliate retailer for all service needs, from appraisal to sizing and repairs.

“It's one of the true models in the Internet world that has a chance to work,” to bridge the gap between “clicks and bricks,” says Bill Farmer, whose Farmer's Jewelry is an affiliate. “The point is, as you're shopping, you can do so with the feeling your jeweler is going to tie back to you locally one way or the other,” so customers can get the benefits of buying from a local jeweler with the selection of an online company. Freeman Jewelers has joined Enjewel as its “first foray” into e-commerce. “It's a realistic way to attract customers [to our Web site],” says owner Carpenter. “I'm not expecting big gangbusters to start with.”

Carpenter uses his own Web site to advertise the store to potential Vermont tourists. “I think it's a real support for our existing customer base ... We're very cautious about what's a reasonable expectation for e-business.” The biggest potential of the Internet, he says, is to offer an additional convenience to current customers rather than as an alternative to traditional retailing.

There is no denying that the Internet is a force in the market. Of those who don't currently use the Internet in their business, 58 percent of jewelers surveyed say they plan to start next year, compared to 42 percent last year. Farmer says that he asks potential suppliers about their Internet strategy. “I'm looking for suppliers who are integrated with Internet capacity. I just feel we have to go ahead. We've got to be part of that.”