Don’t Get Caught in the ‘Net

It used to be a jeweler’s headache: a customer coming in with the Rapaport “red sheet” and demanding that the jeweler match the price. Now there’s a more vexing problem: customers coming in with sheets from BlueNile, Ashford.com or any of the thousands of diamond-selling Web sites-and demanding that the jeweler match those prices. And since many of the sites are working on close margins, that’s no easy task. “Two, three years ago we had rare people walk in with the ‘Rap sheet’ [Rapaport Diamond Report ], and the Rap sheet doesn’t have cut on there, so you could work that,” says Hy Goldberg of Philadelphia’s Safian and Rudolph Jewelers. “This is a lot harder to fight against.” Goldberg says the cyber-competition is forcing him to cut prices, particularly on bigger stones. But don’t panic, retail consultants say. “The Internet is not the biggest bear in any market I’ve been to,” says Kate Peterson of Performance Concepts, an industry sales training consultant company. “It may be the loudest, but consumers are still more likely to say that they’ve visited five other stores.” Even retailers who frequently deal with the Internet problem say it’s not hopeless, because if the customer really wanted to buy something online, he would have done so. St. Louis jeweler Curt Parker says three-quarters of the customers who say they’ve shopped the Internet end up buying from him. “If they come into your store with that sheet, there’s already a little doubt about buying on the Web,” says Vic Hellberg, Hellberg’s Jewelers, Marshalltown, Iowa.

A new kind of customer. The Internet comparison shopper is a new kind of customer, and many salespeople don’t know how to react to them. “Sometimes, the salespeople get flustered,” says Richard Branskomb, CEO of Sierra West Jewelers in Provo, Utah. “That’s the kiss of death. Some of these consumers are an arrogant bunch. If the sales associate or owner is rude or shows intimidation, then all is lost.”

There’s no reason to feel intimidated-the Internet is just another competitor. “It’s no different from someone who says they are buying from Wal-Mart or QVC,” says Joe Romano of Scull and Co., based in North Bergen, N.J. “Competition is competition.” The reason salespeople have problems with Internet customers-or any other customer who makes a big show of comparison shopping-is that they rearrange the sales sequence. In most transactions, the retailer greets the customer, determines his needs, and overcomes his objections-only then do they talk price. But Internet customers skip immediately to the negotiations. The retailer’s challenge is to restore the natural order.

Experts say a customer brandishing a Web list should be treated the same as anyone else who visits the store. The jeweler should try to connect with him. Jewelers shouldn’t disparage customers’ research; in fact, they should praise it. “Recognize the fact that they are informed consumers and have done a little more research than the average person,” says Mary Todd-McGinnis, vice president of sales and training for Seattle-based Ben Bridge Jewelers. “By congratulating them on their research, you take some of the defensiveness away.”

Next, ask about the engagement, the bride-to-be, how he plans to propose, whether a date’s been set. That human touch sets people apart from machines. “A computer screen can’t say, ‘Congratulations on your engagement, tell me about it!'” says Petersen. More importantly, this brings people back to the reason they buy diamonds-romance. “Get them focused on why they’re buying and not on what they’re buying,” Petersen says. “You’re not just selling rocks and metal. You’re selling a symbol that satisfies a need.”

From there, follow the normal steps when making a sale. Probe their desires. According to Peterson, “The best thing you can ask one of these customers is, ‘What are you looking for?’ There might be one hundred diamonds on their sheet, but they’re only looking for one. When you find out their needs, that gets the salesperson back to being an advisor, and that’s a comfortable role for most salespeople. Even though a guy has a piece of paper with everything there is to know about diamonds, he may still need an advisor.”

Don’t just sell the diamond-sell the store itself. Explain why buying at a long-established retailer means more than buying from a here-today-gone-tomorrow Web site. Doubts about Internet shopping must be raised in a subtle way, and only after the retailer has established rapport with the customer. Otherwise it will look as if the retailer is just defensive and knocking the competition-and that can turn the customer off.

Accentuate the positive. Stress the features that a brick-and-mortar retailer can offer that a virtual one cannot, such as insurance coverage, free cleaning and repairs, trade-ins, an on-site bench jeweler, custom design, appraisal services, extended money-back guarantees, deals on photographers and tuxedo rentals, and extras like free jewelry cleaner. Use specific illustrations, advises Goldberg, such as, “What if she’s working out at the gym, and bends the prong? Where are you going to go if you bought it through a Web site?”

Finally, don’t forget that Internet shopping is just another symptom of the much-dreaded “commoditization” of diamonds. Let the consumer examine stones in a way that gets him past the “numbers.” “Nothing can take the place of actually examining diamonds side by side with a professional jeweler explaining the difference,” says Jay Lell, American Gem Society director of education. The underlying message: You can’t do this on the Internet.

Price, price, baby. Despite your best efforts, a customer may remain fixated on price. McGinnis says that sometimes a store’s reputation can diffuse this. “We tell the customer the company wouldn’t have grown to the size it is and been around as long as it has if we overcharged people,” she says.

As a last resort, most retailers interviewed for this article say they will discount, especially if that’s the only way to keep the customer. “As long as you’re in the ballpark, they feel comfortable,” says Lex Harrison, Harrison Jewelers, Pocatello, Idaho. “Some people are willing to spend a little extra if they know that you can take care of them and service [the item]; $100 or $200 isn’t going to make a difference. They just want to [be sure] they’re treated fairly.” Romano adds that if a jeweler constantly finds his prices undercut, it may be time to adjust the prices.

But slashing prices has its perils. “You’re telling the customer that if they hadn’t done the homework, they’d be getting hosed,” Petersen says. “What kind of message does that send about your store, about the industry?” So if you do have to cut prices, make sure the customer knows there’s a reason for it. Petersen suggests you refer to the Web site as “advertising” for your store. Say, for instance, “I spend 10% of my money on advertising, so I’ll just consider this an advertising cost,” she suggests. “That gets you out of the ‘I’ll discount it once, I’ll discount it forever’ trap.”

But she argues that it’s ultimately better to let the customer walk than to compromise the store’s integrity. “Your store will be there tomorrow, and it’s more important to maintain good will than worry about some site that may not be there in a few months,” she says.

In fact, there’s a growing consensus in the industry that some consumers will always be stuck on price and that high-end retailers are better off concentrating on customers who want something extra. “A store has to ask themselves: Is this customer their customer?” says Romano.

And in some cases, people really are getting a better deal on the Internet-and there’s not much even the best retailer can do to convince them otherwise. “I even let a cousin of mine buy from a Web site,” Harrison says. “They were working on such a tight margin I just said: ‘Go ahead and buy it. It’s a good deal.'”