Why did Journey dead-end for some last holiday?

July 11, 2008

Using Journey pieces from designers, like these 5.71-carat "Femme Fatale Triple-Drop" earrings from Stephen Webster, is one way independents can position themselves to compete against the chains. Price available upon request. www.stephenwebster.com

By Michelle Graff

New York—Journey diamond jewelry is a road well-traveled for large chain jewelry retailers, but it was not a trip worth taking for all independent retail jewelers this past holiday.

Retail jewelers nationwide contacted by National Jeweler say Journey did not move over the 2007 holiday, and many blamed lower prices at chain stores for the drop-off in sales of the two-year-old beacon program from De Beers' Diamond Promotion Service (DPS).

In response to the findings, DPS Senior Partner Claudia Rose says independents can better compete by adding small touches of customization and developing a "compelling narrative" about why their items are fairly priced.

At Edward Arthur Jewelers, which has stores in Columbia and Glen Burnie, Md., Randy Brooks says Journey sales spiked during the 2006 holiday season, months after its August 2006 debut. But his holiday, Journey sales fizzled fast, falling from $170,000 for the two stores in 2006, to below $100,000 in 2007.

"It's run its course," Brooks says. "It's time for [the DPS] to change direction because they beat this horse as far as it can go. It's over."

Brooks says in addition to Journey simply no longer having the "wow" factor it had when introduced, a bad economy and competition from national chains contributed to the decline in sales at his store.

Large chains sold the greatest percentage of Journey pieces in 2007, at 47 percent; followed by independent retailers, 27 percent; department stores, 14 percent; other (Internet sales, cruise ships, etc.), 6 percent; and discounters like Wal-Mart and Target, 5 percent, DPS statistics say.

At Russell Korman Fine Jewelry and Watches in Austin, Texas, Brooke Winfrey recently passed up an opportunity to reorder Journey. The store sold a few Journey pieces that were one carat or larger during the 2006 holiday season but didn't sell any pieces that size this past Christmas. Of the 10 Journey pieces the store ordered in preparation for the 2007 holiday season, less than half were sold, Winfrey says.

She blames the drop-off in sales on the fact that discounters or "jewelers who are in the financing business" also carry Journey.

Sergio Arias echoes the same thoughts about Journey sales at his stores in North Attleboro and Brockton, Mass. He says the pieces simply aren't selling, and customers tell him that it's because the pieces are everywhere, while they are searching for something that is unique.

"Once you give it to a chain store, most people get turned off from it," Arias says.

The DPS' Rose acknowledges that independents have legitimate concerns about chain competition for Journey, but she says DPS research indicates that consumers want distinctive designs, so customized Journey pieces can help independents compete.

"Chains, with more homogenized merchandise, are less able to meet this need," Rose says.

Customizing pieces in the Journey style has worked for Arias, who says he makes his own piece modeled after the Journey "zig-zag" pendant and it's a "hot seller."

Rose says to address price, independent retailers should stress the extra value they add by mentioning the designer, the rarity, similarity to pieces worn by celebrities and any guarantees or after-sale service they offer. Consumers surveyed by the DPS have said they are not looking for the absolute lowest price but rather a price that can be justified during the purchase.

Not bucking tradition While independent retailers saw Journey decline, sales of the designs as a diamond jewelry category actually grew.

Journey sales in the third and fourth quarter of 2007 rose 67 percent over Journey sales during that same period in 2006, exceeding sales expectations, the DPS says.

In addition, the DPS says that the growth of Journey's popularity has surpassed that of the three-stone ring over its first two years on the market.

Anecdotally, at least, this has not held true for independent retailers, who say that the past-present-future—or three-stone—beacon program, which was introduced in 2000, seems to have more staying power than two-year-old Journey.

Natasha Henderson of Saxon Fine Jewelers in Bend, Ore., says the three-stone motif sends a "very direct message," while the more varied Journey pieces are harder to identify.

"Variety is a good thing, but if you're going to do a campaign, it has to be consistent and make a statement," Henderson says.

Brooks says in his store, Journey definitely fizzled out more quickly than the three-stone concept.

"That's not a novel idea, that's an idea that will stick," he says of past-present-future.

Harry Maloof of Maloof Jewelry and Gifts in St. Clair Shores, Mich., says many pieces of jewelry, including Journey, are fashion items, and like other non-necessities they have been hurt by higher gas and food prices lately. If consumers buy anything, he says, they are choosing basics.

"The Journey itself, it's short-lived, that's all," Maloof says.

Where Journey ends up

Outlet vs. percentage of Journey pieces sold

Large chains: 47%
Independents: 27%
Department stores: 14%
Other (Internet sales, cruise ships, etc.): 6%
Discounters (Wal-Mart, Target, etc.): 5%

Source: Diamond Promotion Service