Over the past 20 years, the growth of jewelry sales has trailed that of other luxury goods. To reverse that trend, the industry needs to utilize more of the other competitive luxury marketers’ “best practices” marketing tools and use them with greater consistency.
The jewelry trade, from top to bottom, isn’t doing a good enough job of asking for the business in compelling ways. At the very least, jewelry is fast becoming a commodity, and, at worst, irrelevant. The traditional way your parents (and you) shop for jewelry will continue to be replaced by new sales channels if we don’t change the way we analyze and conduct our business. (If you don’t believe the retail jewelry apocalypse is already under way, consider this: Sam’s Club regularly sells jewelry in the $50,000–$60,000 range and sometimes enjoys $100,000 sales, according to Dee Breazeale, vice president and merchandise manager of the chain’s jewelry division.)
The path to developing better business practices begins with looking at your business and asking some tough questions and then drilling down to find better answers. Three good questions to start with are these:
1 What are my most valuable marketing tools?
2 Am I using them at the right time, in concert, and to their best effect?
3 How do I know which products to feature and where they should run?
The next set of questions will help sharpen your focus as you prepare to fill your marketing toolbox:
4 Am I featuring a selection of my fastest-selling pieces in my various marketing and advertising efforts?
5 Are any higher-margin items not selling at their “expected” rate? (If not, why not, and what can I do differently to change it?)
6 Do I see my products constantly advertised by other jewelry retailers, especially department-store chains and “big box” discount stores? (And when you see “your” products promoted by others at 50 percent, 60 percent, or 75 percent off, do you continue to carry them?)
7 How are my products and services different from or better than the competition’s, and how am I reinforcing these ideas? (If you can’t answer this, ask: “What am I going to do to create points of positive differentiation?” “How will I change or eliminate elements in my store that duplicate others’ efforts and aren’t positive points of distinction?)
8 What method do I have for identifying and tracking the age of my inventory and what do I plan to do with it when its gets beyond two—or at most, three—years old?
9 How am I tracking the overall effectiveness of my various forms of advertising and marketing?
10 Am I using my co-op advertising funds effectively and spreading these marketing messages throughout the year?
11 Of these co-op funds, do any manufacturers offer extra co-op for critical communications vehicles—like Yellow Pages advertising—that work all year long? (Hint: consider additional listings on pages outside the traditional “jewelry” sections like “timepieces,” “diamonds,” “gold,” and “jewelry repairs.”)
12 Do my sales associates ask customers what brought them into the store and how they heard about it?
13 How do they log this information for my future analysis? (Can I add an effective “performance” bonus for my sales associates who consistently capture this critical data for the store?)
There are no “right” answers to these questions, but going through this type of analysis will help you gain critical insight into some of the key “best practices” already being applied by your luxury goods competitors. It will better enable you to begin planning your next 18–36 months of marketing initiatives as you seek the retail advantage.