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Group Benefits
For members of jewellery buyers’ groups, chatting with colleagues
can be as profitable as preferential pricing from suppliers.
By Sarah B. Hood

R
unning an independent retail jewellery business can be something like piloting a small boat on
the open sea. The stormy waves of the international economy can make it tough to stay afloat, and
sometimes it’s even hard to tell whether the boat is steering in the right direction. But belonging to a
buying group, say many retailers, is like having a lifeline to other experienced navigators.

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“If you’ve had a bad month, it’s great to be able to pick up the phone and
know that everybody else has had a bad month, because you know you’re
not doing anything wrong. It’s reassuring to know that you’re not all by
yourself,” says Susan Cartwright-Coates, owner of Cartwright Jewellers, a
75-year-old, third-generation family business in New Westminster, British
Columbia. She’s also current president of DiGem, and her comments are
echoed by retailers all across the country.
DiGem was originally formed by three Alberta jewellers, and currently
counts about 46 independent stores in its membership, located
between British Columbia and Manitoba. Besides the networking,
DiGem offers its members the power of group purchasing from chosen
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suppliers and the convenience of central pay. “And at the end of the year,
we pay back to the owners all the excess funds in the form of a rebate,”
Cartwright-Coates says.
DiGem Vice President Brent McCallum is the owner of McCallum
Jewellers in Brandon Manitoba, a fine jewellery and giftware store in a
100-store mall that has been in operation since 1963. McCallum Jewellers
joined DiGem in 1979. Like Cartwright-Coates, he names as the top
benefit of membership “the camaraderie, the experience we’re able to
share every day. There’s not a day goes by that that I don’t pick up the
phone and ask a question, whether it’s about a promotion that I want to
run, or an advertising campaign, or certain pieces of jewellery,” he says.

DiGem protects the territory of each retailer by limiting its membership in
each market; existing members have the right to refuse membership to new
members who they feel would compete with them for the same business. The
members also participate in joint promotional projects, like the publication
of this year’s pullout guide to buying diamonds in Up Here magazine.
“We’ve just finished launching a newsletter to the consumer,” says Cartwright-
Coates. The 8½" by 11" publication is partly generic, but also has a page that
can be custom-printed with each participant’s promotional information.
Among other DiGem collaborative projects are a one-year diamond ring
insurance guarantee against loss, theft or breakage, which includes a trade-
up plan, as well as a mentor program for newer businesses, sponsorship
of training sessions at the Western Canada Jewellery Show, and a very
popular charity dinner on behalf of the Canadian Cancer Society called
“An Evening of DiGem Decadence,” where guests bid on fancy desserts
and other treats.
Canadian Jewellery Group Co-operative Association started operating in
Northern Ontario in 1977, and became a co-op in 1984. “And that’s when
they really started expanding outside of Ontario,” says general manager
Beth Saunders. Commonly known as Canadian Jewellery Group, the
organization currently has 94 members operating out of 117 retail locations
all across Canada, from the Northwest Territories to Newfoundland, and
works with a list of 72 preferred suppliers. “We’re definitely small-town
Canada, and we’re very proud of that,” she says.
Like DiGem, Canadian Jewellery Group is able to arrange for very
favourable pricing for its members, offers complete central pay,
redistributes back a volume discount to members at the end of each year
(just under $900,000 last year alone), and protects members’ right to
operate without member competition within their own territory. A group
of nine retail jewellers represents all the members and makes decisions
on their behalf.
Occasionally, the group negotiates exclusive products for the membership.
“We have our own Canadian diamond brand called the Arctic Circle
diamond; that is something that the consumer would only be able to buy
in our stores,” says Saunders. Members are also promoting themselves
individually under the banner of “The National Diamond Store”, which
“allows us to do national advertising at a better cost,” Saunders says. At the
same time, it raises the profile of the individual stores, the group and the
industry with the consumer.
However, she adds, “some of the best marketing tools, we find, are the
networking sessions at our annual buying shows and regional meetings.
Because the members are non-competing, they’re very open to sharing
ideas and promotions. We have an online chat group and they run ideas
back and forth.” The membership is also eligible to use a group contract
with Canada Post, a program that allows members to get in-store credit
cards, and an insurance plan with Jewelers Mutual in the U.S.
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The current Canadian Jewellery Group president is Jennifer Scott, who owns
a 30-year-old jewellery and gift shop called A Touch of Gold in Montague,
P.E.I. Recently, her main focus has been on Canadian diamond sales, which
she says now represent 80% to 85% of her current business. “We’ve been
advertising with posters and radio commercials, and we’ve done really well
with Arctic Circle engagement rings and diamond earrings,” she says.
“I have been a member for 20 years, and the main reason we joined the
group was because we were a small store and we wanted to be competitive
with the chain stores or larger jewellery stores,” she says. Besides the
convenience of the central pay and the product discount, Scott says, “the
networking within the buying group is amazing. I have got some really
close friends from all over the country; we network back and forth, we
keep in touch, and if business is down we try to pull each other back up.”
Michael Knight, owner of the 127-year-old Towns Jewellers in Orillia,
joined the Canadian Jewellery Group in 1982. He can point to a specific
recent benefit of membership. “The biggest success for us right now is the
fact that we have Pandora jewellery in my store,” he says. “I was talking
to other members who were telling me the success they’ve been having
with it. Now I’ve got it in the store, and it’s doing very well for me: a direct
result of networking with others.”
In Quebec, Les Bijoutiers Gemme Inc., informally known as Gemme
Group in English, follows a slightly different model. “Gemme negotiates
with suppliers, and they must sign a commercial agreement,” says general
manager Marc Laperle. By joint decision, Gemme members buy only
from the list of contracted suppliers.
Gemme, which started 20 years ago, has about 40 members, mainly in
Quebec, with a few in New Brunswick. Networking is one of the big benefits
of membership; the organization also co-ordinates joint promotions, like
an annual Christmas brochure, and puts together the Gemme Selection
line: bread-and-butter products like wedding rings and gold earrings that
suppliers provide at what Laperle calls “fantastic prices”.
Among other innovative programs is centrally controlled in-store HD
screen programming; suppliers pay to be featured in short segments that
run about 150 times a day. Gemme also does media buying on behalf of
the group, so members can take advantage of bulk pricing with television,
radio and print advertising in major markets.
All three organizations demonstrate the advantages of building relationships
with peers in the industry. “We work together,” says Cartwright-Coates. “There
is so much opportunity and so much to learn, and your competition is really
the car dealership down the street and the travel agent, not another jeweller.”
“Not only do I believe that buying groups can be a true voice for the independent
jeweller, but I think there’s a lot in it for the suppliers,” says Knight. “The unity
and the bond that has been formed between the retailers have gone a long
way to strengthen our industry, and we need more of that.” [CJ]
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