To adapt to a fundamental shift in not just the jewelry industry but also in the overall economy, jewelers must begin to think of jewelry not as a commodity but as an experience.
Keynote speaker Al Molina, a jeweler from Phoenix, Ariz., told the audience that the average jeweler’s profit margin-hovering at about 4.8%-is unacceptable. While other industries-from coffee to bottled water-have moved their products away from “commodity” status through positioning, branding, and advertising, diamonds and jewelry remain firmly entrenched in the commodity market.
“We are in the emotion business,” Molina said. “Our product is not one-carat diamonds, it’s not blue sapphires, it’s not green emeralds. It is how the product makes a person feel . and how much is that worth?”
Creating an experience is part of adding value, a phrase that-thanks to De Beers’ call for adding value to diamonds-is becoming an industry buzzword. “If you can’t add value to that diamond, you shouldn’t be selling it,” Molina said. “You have to add value, and to do that, you have to build a stage.”
Building a stage includes three key elements: location, people, and merchandise, he said.
The first step toward selling experiences and increasing profitability is differentiating yourself from the competition.
“If you try to be everything to everybody, you’re not going to survive,” Molina warned. “We have to have some hook, otherwise you just become part of the pack.”
Molina suggested meeting with staff to begin developing an individual brand identity. In consultation with your salespeople, identify the store’s strength’s, weaknesses, opportunities, and threats. From there, develop a tag line and begin communicating your identity.
Because the entire store experience is part of moving away from jewelry as a commodity, Molina suggested that retailers take a close look at the outside of their stores and try to understand what customers experience from the moment they step out of their car. “The experience starts not when they walk through the door, but when they open their car doors,” he said.
To succeed in changing the perception of jewelry from commodity to value-added experience, salespeople must adhere to service-oriented practices.
“Everything you do beyond selling a piece of jewelry is relationship building, which is where you need to be,” Molina said.
In his store, for example, salespeople must make a minimum of 20 calls per day, maintain detailed customer profiles, and be board members of at least two local charities each.
“You never know where your next sale is going to come from,” he said.