American Gemological Society International Conference in Vancouver, Canada
Ed Bridge
Good afternoon, everyone. Bill, thank you for that wonderful introduction and your very kind remarks. I value your friendship, both from a personal and a business perspective. I am honored to be with all of you at the 2002 Robert M. Shipley award luncheon. I'd like to thank Ellen Lacy, Bill Farmer and Robert Bridel for inviting me.
When Robert asked me to speak on the value and benefits of continuing education in the jewelry business, I immediately said yes. I said yes because it is a subject I feel passionately about and is one of the core values that my family has built our business on. It is one of the cornerstones of the AGS. It is the centerpiece of this conclave. The last 4 days have been full of wonderful educational opportunities. From what I've heard, the biggest challenge for many of you has been in choosing between conflicting sessions. Each of you has made a large commitment in time and money to be here to add to your knowledge, to further your education and to maintain your professionalism.
I would guess that before you came you were already more knowledgeable (gemologically, at least, and probably in other areas as well) than 90% of the people in our industry. You are the elite --- talking to you about the value of continuing education is the very definition of preaching to the choir! Nevertheless, I'm here, so I would like to share some of my thoughts and observations on the value of continuing education for us as individuals, for our companies, and for the growth and success of our industry.
Last year I had the pleasure of attending the Berkshire Hathaway annual meeting. This meeting annually draws between 15-20,000 shareholders and countless reporters from around the world. They come largely to listen to Berkshire Chairman, Warren Buffett, considered by many to be the greatest investor of our time. Since he invested in our company 2 years ago, I would never argue with his investment judgement. At the meeting he was asked for his best investment advice. Everyone was quiet as they waited for some golden stock tip, some bit of wisdom. He answered, "The best investment you can make is in yourself".
Wow, down-home wisdom. It reminds me of the old adage, give a starving man a fish and he can eat for a day. Teach him to fish and he can eat for a lifetime. That's what continuing education is about…learning to be better jewelers, to improving our fishing technique. It is a lifetime endeavor.
Professionalism requires continuing education. Doctors and attorneys are required by the medical associations and the bar to be tested and to continue their education. Likewise, AGS jewelers are trained, tested, and re-tested annually.
Professionalism is important for two reasons:
Proactively it leads to better business. According to research that Ben Bridge just completed this past January, ¾ of jewelry buyers list as one of the reasons they prefer one jewelry store over others, is that the sales staff seems to have more knowledge about jewelry than the staffs of other stores. Further knowledge instills confidence in our sales associates, making them assured in their sales presentations, leading to an increase in sales.
Defensively professionalism helps to prevent problems. There are so many treatments of gemstones, both new and old, from fracture filling to diffusion, to be aware of; rules and regulations; social, ethical and environmental issues. Miss-steps in these areas can lead to not only lost sales, but monetary damages, lawsuits and negative PR. These areas are constantly changing and growing. It seems to me they are far more complicated today than 10 years ago. They require continuing education to prevent or limit problems.
My company, Ben Bridge Jeweler, is celebrating its 90th year in business this year. My cousin, Jon, and I are the 4th generation to manage the business. It was started in 1912 by our great-grandfather just 150 miles south of here in downtown Seattle. From the very beginning, education and professionalism have been core values that we have built our business upon. Together they form one of the key ingredients to our growth and success. Thirty years ago we had 2 Ben Bridge stores. The main store was run by my father Bob and uncle, Herb Bridge. The branch store, in Southcenter Shopping Mall was run by Orley Solomon, the 1998 Shipley Award winner….who is still with the company (going on 43 years now) and a frequent speaker over the years at conclaves. Orley, stand up and take a bow.
We did a few million dollars in business in 1971. Today we have grown to 68 stores in 11 states and we do a few hundred million dollars in business. The key to our growth and success has been, and will continue to be, our people.
During this 30-year period, 100% of our store managers have been promoted from within the company. All of our officers, with the exception of our CFO, have also come from within the company, as well as all of our buyers and merchandisers. Hiring good people, developing them, and keeping them with the company has been our three-step recipe for success. Hiring the right people has, obviously, been critical. We have had a policy of not hiring the résumé (that is, not necessarily looking for someone with experience in jewelry), rather trying to find people with characteristics that fit in with our values.
In his book Good to Great, Jim Collins put it very well when he said, "widen your definition of 'right people' to focus more on the character attributes of the person and less on specialized knowledge. People can learn skills and acquire knowledge, but they cannot learn the essential character traits that make them right for your organization".
This requires a real commitment to education. We invest a huge amount in time and money in education and training. We have 8 vice presidents in our company. One is responsible for merchandise, one for marketing, and one in finance. The other five are primarily dedicated to hiring and training. We have developed many of our own classes. We dub these "Ben Bridge University". These are developed around the following areas; sales, gemology, product knowledge and leadership. We have eight manager meetings a year. I'm not sure there are very many multiple-door companies that have as many meetings as we do. Our meetings are largely devoted to education, and self-improvement.
For outside gemological education, we have relied principally on the GIA and the AGS. We have over 300 associates who have completed or are currently enrolled in courses. Bill Boyajian has told me that we are his (the GIA's) best education customer. Bill has never told me what he means by that. I assume it means we spend a lot of money with GIA! Bill, we thank you for helping us build our business. You have been an integral part of our success.
As a company, we strongly encourage our associates to take and complete these courses. We will pay 100% of the costs of these courses. We pay ½ the cost upon enrollment and will reimburse the other ½ upon completion (we do care if they complete the course and want some incentive to finish!).
We also have a commitment to retailing, repairing, and refinishing fine timepieces. As I'm sure you are aware, there is a shortage of qualified watchmakers. We have worked closely with a local school, North Seattle Community College, developing and keeping alive a horology program. Herb and Jon Bridge have both served on its board of advisors, and five of our current and former watchmakers have worked as instructors there. The program at NSCC is one of only three in the US currently affiliated with WOSTEP (Watchmakers of Switzerland Training and Education Program). Half of our 30 plus watchmakers have graduated from this program. We have continuing education through programs offered by the AWI (American Watchmakers Institute), suppliers, and our own. It is important to both refresh and add new knowledge in all facets of our business.
We have also paid for college courses where it was relevant for individual positions in our company. Education is good business for both an individual and an organization. It is a continuing project…one that is never completed. This is one of the great things about our industry…you can learn something new everyday and never know everything. There is always more to learn.
We jewelers are selling a product that most consumers have limited knowledge about. They look to us the professional jeweler and gemologist, as the primary source of information about jewelry. In a 1996 study conducted for Jewelers of America, 69% of consumers listed jewelers as their primary source of information about fine jewelry (including 44% sales person, 15% store display/brochures, and 10% advertising). The next closest was 21% whose primary source of information were friends and relatives.
Now, if you have been out and shopped a lot of jewelry stores (or outlets that sell jewelry) or if you have read various trade journal accounts or watched TV exposé's of shopping expeditions, you know that can be a scary scenario. There is a lot of misinformation being passed off to consumers. As Mark Twain said, "It's not what you don't know that hurts you, it's what you know that ain't so". Misinformation is not a good recipe to build consumer confidence on.
Last July I finished a 2-year term as Chairman of Jewelers of America, our national trade association. One of the goals of JA has been to raise the bar of professionalism in our industry. This encompasses many programs including education and certification. In my role with JA, I talked with many jewelers around the country. Most were very supportive of this goal. Occasionally, I would come across a jeweler who didn't want to educate other jewelers or other classes of trade (like department store sales associates). They wanted to keep information from them…as a sort of competitive advantage. In my viewpoint, this is very shortsighted and an attitude which does disservice to our industry.
I was brought up with a far different model. My father and uncle, Bob and Herb, were always willing to help other jewelers, whether it was helping with educational events at state jewelry conventions or even going so far as to share our merchandise with a jeweler up the street to help them make a sale. I guess it was the way they were brought up from their father. We believe in our trade and the organizations behind it, those that provide us with the superb reputation and professionalism that most in our industry have maintained. My grandfather, Ben Bridge, Herb, Bob, and Jon have all been president of our state jewelers association. Bob and I have both been president of our national association, Jewelers of America. Herb has been head of the Board of Trustees of the AGS. Not to mention involvement by all of us with Jewelers Security Alliance, Jewelers Mutual Insurance, Jewelers Vigilance Committee, Jewelers Information Council, among others. Our vice presidents and managers have done likewise.
The US jewelry industry is about a $40 billion industry. We get a very small share of the consumers' disposable income. Last year U.S. consumers spent 5.2 trillion dollars (not counting housing). I see our competitors as everyone else who goes after those dollars. Three in particular I see as the largest competitors; leisure travel ($158 billion a year), electronics ($168 billion a year), and cars ($432 billion a year!). These are each 4 to 10 times our size, and in my opinion, we have a superior product to sell.
A number of years ago my wife, Pam, and I were having dinner with a few friends. As I am sure many of you have experienced, it was not long before Pam's jewelry was being passed around the table. As his wife looked longingly at a piece of Pam's jewelry, her husband, an owner-president of a big company, said to me, "I don't understand diamonds. I would rather buy another tractor for my ranch". Another tractor!! Well, to me them's fighting words. I said to him, "I'm not sure your wife would agree", and proceeded to talk to him about diamonds. It wasn't long before he was in one of our stores buying a beautiful diamond ring for his wife. He has since made a number of nice purchases. After a Valentine's Day purchase of some significant earrings for his wife, I called to see how she liked them. He told me, "If I knew how much joy it would bring my wife, I would have started buying her jewelry years ago". This is nothing new to any of you. Each of you could tell similar stories. Nothing expresses love and affection like fine jewelry, but we need to educate customers……and sometimes take market share from tractors. Watch out John Deere!
If we can do anything to increase the "jewelry" share of the consumer market, we're sharing an increased pot of wealth with all our peers.
Increasing education and raising the bar of professionalism will increase consumer confidence in our product and allow us to claim a bigger percentage of the consumer's dollar. There is not some set limit to jewelry purchases. There is no limit to showing love and appreciation, to having beautiful things, or to pride of ownership.
I have a friend who is the president of a grocery chain. For him, if someone else sells food, he will sell less --- there is a finite limit to what people will eat (at least most people). He is fiercely competitive to others who retail groceries.
For us, there is no finite limit. Fine jewelry is not satiating. (As my wife keeps telling me, there is always something else she'd like to have. Isn't that right, Pam?)
Through education, through increased professionalism, we can increase consumer knowledge and confidence leading to a larger industry. How many women here own at least 5 pieces of fine jewelry? 10? How many of you feel you have enough fine jewelry and don't want anything else? That's what I thought. Sorry, fellas.
Continuing education is a lifetime job. I compliment each of you for being here. But it is not enough that each of you is committed. It's up to you to educate and mentor individuals in your organizations to want to make this industry a career, to invest to further their professionalism.
The future of our industry is bright.
The human desire for adornment, to show love and appreciation is thousands of years old, but our best years are in front of us. There will be ups and downs along with economic cycles, but in general there has been increasing prosperity in our country and this promises to continue in the future. In addition, significant demographic changes are having positive impacts on our business. That demographic bulge known as baby boomers is aging. They are reaching historically peak jewelry buying years. Consumers between 45 and 64 years old spend considerably more per capita than consumers 25 to 44. This age group is projected to increase significantly over the next decade.
Why will they buy more jewelry?
1. They tend to be more affluent. These are peak earning years. 2. They have more disposable income. (Their kids are raised, their houses bought.) 3. Perhaps most important, they have significant life cycle events to celebrate --- anniversaries and birthdays of significance. According to Ken Gassman, at Davenport & Co., over 11,000 are turning 50 every day! These occasions need to be recognized …..often with jewelry. Of course, we can and should influence how often!
A second area of opportunity is the huge inheritance being transferred. The World War II generation is the wealthiest in the history of the world. They saved and invested. Now they are aging and leaving behind large inheritances. An estimated $143 billion was transferred in 2000 alone. According to a Cornell University study, $10 trillion will be left to heirs by the year 2040. What will this 100% disposable money be spent on? Will our industry get a significant share of it?
We can assure the continued success and growth of our industry by building confidence and knowledge in our customers - - confidence and knowledge imparted by the professionally trained sales associates in our companies. Armed with knowledge and training, our people can't help but increase all of our businesses. Our company's historical success speaks volumes for this priceless investment in our people.
We have a large stake in continuing education and exhibiting professionalism as individuals, as companies and as an industry. Together we can build a bright future.
I thank you for inviting me here today. I wish all of you continued prosperity in an industry we all love. Thank you very much.