There still are jewelers across the country who go to work each day – and do their jobs exactly as they did them the day before. They unlock their doors, set out their wares, wait for customers to come in, “help” them if they do, close up shop, then go home to worry about whether tomorrow will be a better day or next year a better year. These jewelers live in their own small world. They don’t see how they fit into the big picture or what they can do to effect change in their circumstances.
Today, there’s no room for such a do-nothing business life. With fierce competition from other jewelers and from other industries anxious to snatch up consumer dollars, you can’t afford to be complacent about who you are, what you offer and where you stand in your marketplace – not if you want a decent return on your investment and some worthy reward for the risks you undertake in running your own business.
To be a successful retailer today, you must completely understand your position in the local market. This includes:
The merchandise you carry – and how it varies in quality, price, value and style from that in other stores.
The services you offer, such as cleaning, repair, appraisal, gift-wrapping and delivery – and how they differ from those offered by others.
The policies you practice, such as credit, layaways, guarantees, trade-ins and returns – and how they compare to others’ policies.
The staff you have – and what sets them apart from other jewelry sales professionals with whom your customers have contact.
Your competition’s positioning in your market. Possessive pronouns and the importance of “what’s mine” are important here. You’ve got to want to own a significant portion of your market enough to be willing to put the effort into achieving that.
Your competitors’ strengths are your weaknesses. Their weaknesses should be your strengths. Don’t go into competitors’ stores looking for what they do wrong. Look for everything they do right – and better than you do! Successful businesses use that knowledge to improve themselves, not to beat their chests for small victories or to denigrate others.
To understand clearly where you stand against all the other guys in town, you need research – commonly called “Shopping Your Competition.” It’s surprising how many jewelers are afraid to go into a competitor’s store or send their staff into one. It’s as if knowing what your competition is doing is unethical or something. Shopping competitors is not a dirty game; it’s good business. You can’t rely on hearsay or the opinion of your good customers about what’s going on in other stores. You must go out and see for yourself.
You need clear guidelines to shop your competition, assess relative strengths and weaknesses in your market and initiate changes to earn greater market share for yourself.
Cast a wide net. Don’t limit your research to the jewelry industry; your greatest competitors for discretionary dollars often are other purveyors of luxury goods. Electronics, for example, enjoy huge volume these days. Look carefully at outlets that specialize in service, customized inventory and knowledge instead of just price. Study any business that sells something people don’t need. You’re bound to learn a thing or two from such research – and you just may find some great salespeople who might enjoy selling a different product!
Approach any shopping project as a learning experience as much as a fact-finding mission. See how others greet you, how they seek information and how they present merchandise. See how they handle objections that you find difficult to deal with. You’ll learn a lot about the merchandise that store carries and about how it relates price and value. Learn from everything it does “right.”
It’s impossible for you to shop all your competitors personally, and it won’t help your staff if you do all the legwork. Knowing and understanding the competition are responsibilities of every player on your team and the information should be updated continuously. Confidence is born out of the knowledge of what you do well.
Give everyone on your staff a specific shopping assignment. You’ll gain the greatest amount of useful information by limiting the type of product researched and by requesting specific information (see sidebar, below, for tips to guide your staff). You’ll be able to graph some pretty accurate information when you can compare apples to apples.
Spell out your objectives. Shopping may be difficult at first, but you and your staff soon will develop practiced eyes and techniques. You should have three clear objectives:
To gain information on services or policies;
To compare other stores’ levels of staff knowledge and skills to your own; and,
To compare merchandise, selection and environment.
Within these three objectives, we suggest you focus on seven key elements:
Assessing your relative strength in each of these elements will give you a clear idea of how you stack up against competitors in your local market. Charting your findings will produce a graphic that makes it easy to identify areas where slight changes may make a big difference in your business – and other areas where it may take a monumental shift in store policy or merchandising to position yourself better. It’s not rocket science, but it works!
Owner-to-owner. Shopping other jewelry outlets in your local area is sensitive. Many store owners find it hard to sustain an open dialogue with competitors. But there is tremendous value in developing and maintaining at least a cordial relationship.
Build a relationship around areas of mutual interest, such as security, competition from other luxury goods, preservation of your local shopping habitat, etc. Some people simply ask straightforward questions of their competitors. Depending on the confidence each of you has in your particular niche, this can be productive and fruitful. But it also will put some competitors on guard and on the defensive.
Usually you have to step into the role of customer to get the kind of information you need. When you act like a customer, you’ll be treated like one – and that is the value of your research.
Remember that you can learn from jewelers who are not direct competitors. Don’t just chat with your jeweler friends across country from time to time. While traveling for business or pleasure, try to visit as many jewelry stores as possible. Talk to other owner/ operators and ask for as much specific information as you can about what they do and how they do it.
If you just want to find out how a store’s services or policies differ from yours, simply introduce yourself, reveal that you have your own jewelry store in another area and ask questions about whatever you want to know. Always talk with someone in management for three reasons: out of respect; to make sure you get correct information; and to avoid making an associate feel threatened or disloyal by “revealing” company information.
If you are direct and honest, other store owners generally will be, too. If there’s something an owner would rather not reveal to you, usually he or she will tell you that. But you may be pleasantly surprised at the valuable information you receive and the printed material you can pick up – ideas you can use to improve your own business.
Don’t back off. Yes, shopping your competition is touchy. Some jewelers who read this article will say, “How dare you!” The fact is, we wouldn’t need the process if all of us were willing to share information openly with our competitors on a regular basis. Certainly we’d all benefit from more openness. But most jewelers find such sharing even more objectionable than “secret” shopping.
Because there’s so little real sharing of information, the only real way you can determine and improve your positioning is to research your market. We encourage you to go out there and take a thorough look with a positive attitude, then take the best things you learn and put them to work in your business, in your style.
And stay on your toes in your own business, because you can bet your competitors are shopping you, too!
Kate Peterson and Janice Mack Talcott are the principals of Performance Concepts, a company dedicated to the education and training of specialty retailers. Their company offers innovative, practical training and professional development for all levels of the retail industry and understands the importance of appealing to a variety of learning styles and performance patterns. They have extensive behind-the-counter experience and a sensitivity to the issues confronting retailers today – including product, price, customer service and distinction within a community.
How to check out The competition
If you’re starting your first serious shopping research, here are some guidelines on how to tackle the process.
Ask each member of your staff to shop for something specific, such as a diamond solitaire necklace. You may even want to specify diamond size and approximate quality. Each person should shop for the specific item in at least three competing stores and make notes immediately after each visit. Everyone should ask similar questions agreed on in advance.
Ask questions you might expect a customer to ask you – about quality, about the chain, about the clasp, about the setting. Ask for a discount, for lay-away and for credit. Ask about trade-ins. Note the following:
How were you greeted and were you made to feel at home?
How would you describe the selection you saw?
The variety of styles?
The quantity of merchandise or the choices you had?
How would you rate the expertise (technical knowledge and sales skills) of the sellers?
Did they profile you?
Did they ask “Yes” or “No” questions?
How did they answer your questions?
Did they ask for the sale?
Were you turned over to a second salesperson?
Did they give up quickly and hand you a business card?
How many business cards with style numbers and prices did you collect?
Describe any discounts, trade-ins and credit plans you were offered.
Describe the service, warranties or guarantees you were offered.
Describe positive aspects of your experience that could/should be adopted in your own store.
Give your staff a clearly-defined time frame in which to shop their assignments, then plan a group discussion. Because it’s hard to remember details of every store, it’s a good idea to write down impressions immediately after a visit.
Create a form on which your associates can write their answers to each of the questions above as soon as they complete a shopping visit. Notes and impressions should be shared among your entire staff. Every experience is different and each can teach you something.
Be sure to keep staff shopping reports positive and objective. No doubt you’ll hear some great stories, get a few laughs – and also experience a couple of sobering reality checks.
During your group discussion, make a chart that lists you and all your major competitors. Rank your position in each of the seven elements listed earlier – selection, quality, environment, service, selling skills, knowledge, policies. Be as truthful and objective as you can. If you add your rankings in each area and compare your total to that of your competitors’, you’ll probably find that you’re pretty close in some areas, terrific or weak in others. The same will be true of your competitors.
Ups and downs. Your findings will prompt many questions. In how many of the seven areas are you at the top? In how many could you be at the top with just some minor changes in your operation? Can you identify those changes? Can you match some of your competitors’ merchandise selections? If not, how can you artfully tailor what you have to a defined target market? Where are your competitors’ weaknesses upon which you could capitalize?
For example, even though you may not be able to provide some of the guarantees and warranties a competitor does, have you the advantage of a more knowledgeable sales staff? Even though your staff is more knowledgeable, does someone else have one with more skillful selling techniques? How could you adopt some of their techniques to improve the skills of your own staff?
Listing the strengths of your competitors is an eye-opening exercise; dwelling on their weaknesses won’t do you any real good. Examining how competitors do business will help you develop a better picture of what’s going on in your marketplace. You’ll have a much better idea of what your customers see and hear from competing outlets. This allows you to develop a strategy to turn those customers into your loyal clients.
When you put together your plan, start with little things you can improve easily. But plan to tackle all the areas that may need improvement – anything from merchandise selection and fashion diversity to commitment to service and the professionalism of your staff. All are areas within your control.