US-based brand strategist DAN SCOTT touches upon various aspects of the American jewellery industry – last-minute holiday shoppers who helped spike 2017 US jewellery sales, DPA’s efforts to attract the millennial with diamond stories, the online versus offline debate and more.
Optimism. The mere thought of the word makes us smile. A positive business mindset is always easier to possess when good news about your industry is flooding your inbox. That’s how jewellers welcomed an abundance of happy headlines for US jewellery and watches last year. It’s exciting that 2017 closed strong, and this report shines a bright light on those successes. Not a spotlight of praise, rather a revealing light, including what may be lurking in the shadows.
After two consecutive years of declining fine jewellery and watch sales, Mastercard announced US retail holiday numbers were up 4.9% in 2017, compared to the same period in 2016. While this spike represents the largest year-over-year increase for the jewellery business since 2011, analysts from Gartner’s L2 Group caution that the jewellery industry must ignite its own inspiration for growth. L2’s warning was noted at a conference, in bold at the top of a report and the opening line in their report on YouTube, yet didn’t seem to make headlines. I’m including it here as they’re trying to help the industry, not hurt it. Think about this, if we remove the sales spikes in the last two months of the year, many would label 2017 sales as “average” at best. The categories below represent select challenges the industry must address for the benefit of all.
Diamonds versus diamonds
Some 150 million US marketing dollars were invested in 2017 by diamond producers. These funds are aimed to heighten mined diamond awareness and evoke strong relationship-focused feelings from the target audience – America’s millennials. The year 2018 is poised to push the “Real is Rare” slogan that started as an almost invisible soft launch in October 2016. This new slogan is attempting to be the modern-day answer to “A Diamond is Forever”. De Beers’ Forevermark owns that tag now.
The tag line “Real is Rare” is primarily seen within lush commercials and does give one reason for pause. It is, after all, the first time in years that the diamond industry is investing serious time and funds into a new message. And the message has some confused.
For the record, any tag line would struggle to compete with the powerhouse cachet and staying power of the renowned De Beers slogan. Debuting in 1948, the tag line was awarded “Slogan of the Century” and decades later it is as memorable as it was over fifty years running. The slogan spiked and sustained diamond demand, motivated buyers to purchase larger centre stones and ignited decades of diamond fashion frenzy
Enter the Diamond Producers Association (DPA), a group comprising the world’s seven largest mining companies with one goal for 2018: Sell more natural diamonds to millennials. Given the mine to market challenges and less millennials getting engaged or married, whatever their key performance indicators (KPIs) are, it will take a lot more than a great slogan to move the needle.
Last year revealed an overall reduced US diamond demand that started in the first quarter and despite a healthy trend for stones in national stores in and around malls across America, sales averages were… average across the board. Emerging markets such as Houston, Dallas and Miami with other metro areas in the Bible Belt are due to increase in 2019. B2B and B2C US purchasers ordered smaller stones in 2017 compared to recent years, while volume was a bit higher than average, total weight and revenues were slightly below expectations. Also, last year new B2B and B2C diamond trust and trade issues surfaced, such as the inclusion of manmade stones masquerading as naturals in mixed parcels which shocked the industry
Selling online
Offline or Online: Many independent jewellers still struggle to embrace both. An oil and water relationship seems to keep jewellery retailers separated from a new youthful customer base and the ability to sell product while you sleep. Still, for many, the concept of selling anything online is a tough conversation to have and a tougher reality to manifest.
Larry Brows, a seasoned, Northeastern fine jewellery sales executive, represents loose diamonds, platinum and gold private label and luxury bridal brands. He has been doing so for over 35 years. Brows offers an interesting comparison of online to off: “Some of today’s jewellers believe that having an e-commerce site means they have skin in the game. The reality is an online store is akin to operating a physical location. If your traditional store doesn’t provide the right styles, neglects the product presentation or creates the slightest challenge for the consumer to complete a purchase, that store may soon be having a sale – A ‘going out of business’ sale.
Brows is right. Find the time or find the agency to create a scalable site. Attach one or two of your social platforms. Start small, but start. Take a page out of Saks Fifth Avenue’s playbook. From 2010 to 2017 the number one store for all of Saks nationwide was Saks.com and it’s labelled as a door not a division. “We have our strategy sessions for .com and we have the same break outs with traditional stores – .com is a store it’s our best selling store,” stated Jenni Fitzpatrick, demi-fine senior buyer. “Saks.com is the fastest and finest way to test market, survey, promote, and sell.”
Strike the term “Web Site”; and add the term “Online Store / Experience” – online is sometimes dismissed as a “necessary evil.” Those who think that way will cringe when they learn that in December 2017, Amazon sold a watch every 1.5 seconds!
Today’s shoppers will probably visit your online store before they walk into your door. “We see this especially in bridal,” noted Walter Bauman, owner of Walter Bauman, from one of his Northern New Jersey’s fine jewellery locations. “Couples will walk in with printouts of the rings. We appreciate the educated customer, they know what they want and we’re learning more about them as they learn about us.”
Dilemma of sales staff
Imagine you just hired a new, truly remarkable sales person. He won’t accept a salary and will only be paid when he sells. He’s never late for work; in fact, he seems to live in the store. Such people certainly look the part and constantly stand ready and waiting with their fingers posed to enter the next transaction. Then, as you watch in utter disbelief, shopper after shopper walks into your store – none of them greeted. The sales person doesn’t even lift his head. Perhaps the person who just walked in is one or your finest customers, excited to once again buy. Still the sales person does nothing. Even when the shopper has their credit card in their hand and standing right in front of the sales person pointing at the exact item they want, snapping pictures of it and on social media to their friends, the sales person stays frozen and doesn’t utter a word. Without a welcoming greeting and no communication, the shunned shopper departs – confused, probably irate and dashing off to buy elsewhere. Here’s the wake-up call: You did hire that exact sales person and you put up with them every single day.
Think of the time you invest each week within the store as you open with a set of keys and the “digital store” you open with a few keystrokes. To many, that site is expected to sell items on its own. Yet, just like social media, if you allow any digital property to be dormant or “take a vacation,” you’re taking a vacation away from profits.
The Santa Claus effect
Something magical occurs in the closing months of every year. The minds and actions of the jewellery industry suddenly change. In fact, the closer to the end of the year, the more adventurous and creative we seem to get. Shop windows and in-case displays gain newfound attention, the music playing in the store is turned up a notch, sales people seem more conscious of how they appear to shoppers. Everyone that walks into the store seems like a slightly better prospect than all the months before.
I call this the “Santa Claus effect.” We’re all guilty of this change in mindset during the holiday season. We’re conditioned to put on our bestselling caps during November and December. Since this specific holiday is built around gifting and it is at the close of the year, we tend to take more risks hoping for more rewards. To prove this point, think about your sales mentality during equally important holidays such as Valentine’s Day and Mother’s Day. While the intensity seems lessened, there is a positive sales energy and sense of hope during those time periods.
Let’s take this a little deeper… It’s midJanuary. The Santa Claus effect has worn off. People seem lazier; less motivated and sure enough, sales reflect such. We expect it to be slow and slow it is. As humans, we programme ourselves to act on whatever thought we plant in our heads.
So if it’s January, we lean on past months’ memories, the stories that tell us all “J” months are “slow,” and so the days drag. Then, out of the blue, a shopper strolls in and in a couple of minutes purchases a high-ticket item. While exciting, that specific sale in a non-holiday time is written off as a good day; a lucky day; a one-off. Now, take the same exact scenario and place it in the Santa Claus effect. The sales team is recharged for the entire day or longer. The next shopper they meet could be another high-ticket purchaser and they almost expect them to be. They are motivated to sell and sell better. I’ve witnessed this where sales people simply start looking to see who they may call or email that didn’t cross their mind when they were counting their freckles as the second hand of time nudged on.
If there’s only one takeaway you gain from reading this, please make it this: don’t wait for good news to make a headline. Those headlines only make press when people like you create a story worth documenting. And if you think your inbox displaying lots of good news headlines makes you feel good, then reading your own headline will make you feel great.