Your town’s big employer lays off several hundred people. The local economy sinks. Business in your store drops. What’s a jeweler to do when times get tough?
Plan some clever promotions to inspire your staff, pull in traffic, and build sales, say business experts and jewelers around the country. When times are tough, it’s especially important to keep your name before the public.
“People don’t stop spending when the economy tightens up,” notes retail consultant Kate Peterson of Performance Concepts, Olympia, Wash. “They’re just more selective about what they spend money on. So, be sure you’re the one who gets it.”
That’s why Vicki Shaw of Shaw & Son, Canal Winchester, Ohio, keeps “promoting, to give people reasons to come in,” while Eileen Eichhorn, Eichhorn Jewelry, Decatur, Ind., says, “You must create attractions to bring people to your store, especially with so many opportunities elsewhere for them to buy.”
In Yakima, Wash., Pat Gilmore, owner of Dunbar Jewelers, kept “doing the same number of promotions as in past years,” despite 2001’s slowdown and the post-Sept. 11 impact. “Response was good,” he says. Annual revenues rose 11%. Ford, Gittings & Kane, in Rome, Ga., hosts a different event every month, including silver, crystal, and estate shows, repair promotions, and a Ladies Night. “We’re a destination store,” says co-owner Alice Shaw. “We must give people reasons to come here.”
Some jewelers, like Kingoff’s in Wilmington, N.C., increase the frequency of promotions in a sluggish economy, while others, like Neil Browne in Champaign, Ill., add new ones. He added a three-day carat diamond promotion in August “because things were slowing. It worked well; we’ll probably do it again.”
Promotions also serve other purposes. In times of national distress or economic slowdowns, “people want opportunities to do what their heart wants—to buy for themselves or for someone else,” says Peterson. “Successful, optimistic promotions enable that.” Alice Shaw agrees. “After Sept. 11, people wanted to feel happy again about shopping,” she says. “I try to give customers reasons to feel okay about buying and the delight of shopping.”
In-store events also help a jeweler “keep doing business, even as he cuts back in inventory,” says Steve Appelbaum of SJA Inc., Teaneck, N.J., which annually stages thousands of such events in jewelry stores. Despite 2001’s economic slowdown, SJA’s business rose 12%. “We’re hearing from jewelers we haven’t had before or seen in years,” says Appelbaum. “They know [promotions] bring in business they wouldn’t normally have.”
Tips for Successful Promotions
Promotions aren’t cure-alls, but they can help an ailing business—if done properly.
Picking promotions. “Use promotions that worked before. [An economic downturn] is no time to experiment,” says Carl Moore, of William Moore Jewelers, Greeley, Colo. Retail consultant Kate Peterson agrees. “If you had successful promotions in the past, keep doing them. Don’t try something risky or expensive that you haven’t done. Be sure what you do is in character with your market, your store, and your customers’ wants.”
Symbols. “The jewelers hurt in hard times sell ‘product’ and ‘price,’ ” says Peterson. “Successful jewelers don’t sell merchandise. They sell symbols of significance for people, which become more important in tough times.”
“Talk to customers about fashion and lifestyle, [not] the nuts and bolts of jewelry,” adds Largo, Fla., jeweler Robert Young. He and his staff are all bench-trained jewelers but focus on “selling an experience, a celebration, and important emotional connections. Jewelry is the vehicle for those messages.”
Attitude. “Be excited with customers about what you’re promoting,” says Peterson. “Tell them, ‘This is perfect to express how important someone is to you, and this promotion is the perfect time to show it.’ “
Consider Monmouth Jewelers, with stores in Newport and Alexandria, Ky., which has an annual October clearance sale. After Sept. 11, owner Steve Levinson was uncertain whether to hold it. “You must,” urged Peterson, the jeweler’s consultant, “but appeal to customers’ dreams and needs.”
The business refocused its marketing, supplemented its price-reduction message with an emotional one, and changed the tone of its ads. In phone calls and in the store, staffers told customers, the event was the opportunity to “say what you want now to someone you love or to get something you’ve always wanted.” The clearance was presented as the way customers could get what they wanted, but the store made it clear it understood what they wanted in terms of emotional significance.
Result: $200,000 of sales in one day, double the business in four days the prior year.
Be imaginative. Eileen Eichhorn of Decatur, Ind., has an annual January White Sale on white metal items, including platinum, silver, white gold, and stainless steel. This year’s boosted monthly business 20%. “We spent under $3,000 in advertising, hung sheets in windows, and the [sales]girls wore togas,” she says. Another Eichhorn traffic-puller showcases her pearl stringer. “People are fascinated that we’ve got our own stringer, and in watching her work,” she says.
In Greeley, Colo., Moore Jewelers last Christmas gave bottles of wine with the store’s own label to users of its customer-appreciation cards and also to new customers “who made nice purchases,” says Karen Moore. “It was well received and relatively inexpensive.”
In Largo, Fla., Robert Young periodically holds wine-tasting evenings for top customers. Handwritten invitations are sent, followed by phone calls. There are fine wines (“in real glasses, not plastic ones”) and food from a well-known restaurant (“not peanuts or candy kisses, but steak tartare, sushi, baked brie, and a giant fruit plate with cheese,” he says). A local celebrity and a well-known wine expert mingle with guests.
In Washington, D.C., Gorman Jewelers holds an annual two-day “designer party,” where customers meet jewelry designers. The event features a bar, a three-piece music combo, waiters, hors d’oeuvres, and valet parking.
Do tie-ins with charities, beyond donating jewelry, suggests Peterson. “In return for part of the proceeds, they help market the event and expand the customer base beyond your own lists.”
Prepare. Too many jewelers don’t set goals for store and staff or prepare adequately for promotions, says Appelbaum. “They hope for success, instead of planning for a good show and for a specific amount of revenue,” he notes.
A manager must “focus on the big picture and stress [in the store, in ads, and in staff meetings] the significance of the product or service being promoted,” says Peterson. The event also needs a focal point—e.g., restyling, pearls, Mother’s Day jewelry.
Be sure your staff understands what will happen during the promotion and what they should do, says Appelbaum. “Tell them ahead of time. Break the project into simple steps, saying, ‘This is what to do, when to do it, what to say, and how to say it.’ Then monitor them to see they do that.”
Tell people. Inform customers! “Contact everyone on your lists, and every lead for six months,” says Peterson. “But remember, promotional mailings are useless without follow-up. Support them with in-store chats with customers and with phone calls.”
Alice Shaw in Rome, Ga., agrees. “It’s vital to pick up the phone and remind customers two or three days before a promotion begins. When we don’t, fewer folks come.”
When calling, advises Peterson, say something like, “This is Jane Smith from Jones Jewelers. I want to be sure you got our mailed invitation to our special event. We’re excited about it. I think you will be, too, and will find something special for your wife/husband/fiancé/child/friend for that upcoming birthday/holiday/anniversary/special event.” Personalized calls—which also can be left on a message machine—make a customer more likely to come.
Appelbaum recommends making enough calls to get a specific number of appointments. “That gives the jeweler an idea of how successful the event will be, and the calls give people reasons to come,” he says. “Knowing how many will come makes the difference between hoping for a good show and having one.”
For a December 2000 event, he notes, one New England store began contacting people six weeks ahead. Its staff of four had to make 30 appointments a week, or about one a day for each. Result: $160,000 in sales in a day.
Count costs. Consider your return on investment when planning a promotion and evaluating its success, says Peterson. Compare your costs to what you’re selling, the price you’re selling it for, and what you actually get out of it. Look at net profits, not gross, and look at margin. “For example, if a 50%-off promotion reduced your end gross profit to 20% on sold items, you probably didn’t make enough to cover your standard operating expenses on sales, let alone the promotion’s costs. If your objective was to raise cash and clear out old inventory, you succeeded, but if your objective was a profitable promotion, you didn’t.”
Frequency. How often should jewelers hold a promotion in tough times? “Look for opportunities, but don’t overdo it,” cautions Peterson. Otherwise, a specific promotion’s special nature is dissipated. Carl Moore, for example, holds his successful repair specials only twice a year. “I don’t want it to burn out,” he says. “Otherwise, people won’t think it’s a big deal.”