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In these cases, the retailer is much more influential than consumer advertising. “The truth is the vast majority of consumers don’t know the designers or brands we carry,” a retailer says. “We have to educate them. They know David Yurman, but other than that it’s unlikely unless we have sold them the collections.”

WHAT’S NEXT?

What do retailers plan to buy in 2008? Almost all say that they plan to stock more fashion and designer jewelry.

What do they plan to buy less of? Many retailers say that they have cut back significantly on buying Italian jewelry due to rapidly rising prices, although they do make exceptions for a few brands.

Almost all the luxury retailers we talked to are moving their businesses beyond basics. That means eliminating basic gold, basic bridal, loose diamonds, and many watches. As one retailer put it: “I am not interested in selling basic jewelry. There are plenty of places that customers in my area can go for that. I don’t want to spend hours educating a 23-year-old about jewelry only to have them buy it off the Internet.”

Some jewelers say that real jewelers have a responsibility to lead the market, rather than just selling classic diamond jewelry that’s available everywhere. “The tendency today is for stores to become so homogenized,” one jeweler laments. “The uniqueness of the jewelry store is being lost and all seem the same. This is great for niche players like myself, but I think it is proving fatal to many colleagues that don’t stand out in the crowd.”