We have a powerful product. Richard Lennox, group account director for the De Beers account at JWT, puts it this way: “A piece of diamond jewelry is something you give, and it will be remembered forever. I can remember every single time I bought my wife a piece of diamond jewelry. I can’t remember what I bought her last Christmas.”
September is JCK‘s annual State of the Industry Issue, but we didn’t want to focus on that precise topic—we all know the jewelry industry’s health is less than robust. Obviously, a large part of the problem is the overall economy, but the jewelry business has appeared uniquely vulnerable this time around and seems to be losing its bid for share of consumer wallet.
The situation isn’t all bad: As Liz Chatelain of MVI Marketing notes, for a small industry, it still sells a lot of jewelry.
But a sense of pessimism pervades the market, and the industry needs to break out of its funk. With that in mind, we talked to a group of industry wise men and women to brainstorm how to turn around this troubled trade. Among the best suggestions:
1 Become more tech savvy
“I believe the stores that really embrace technology will be huge winners. If you look at the under-30 group, any minute they are going to be the biggest buying block in this country. Imagine a store that you walk in there and it asks what kind of accessories you are looking for. You have a picture of yourself and you can try jewelry on. You are letting the consumer experience jewelry in a new way.” —Elizabeth Chatelain, president, MVI Marketing
“We are now seeing a transition period to the Millennials, who will have very little trouble buying things off the Internet. Things are only going to get more competitive for people who are just there sitting in a store.
“The traditional way of doing business is dead. And the industry is sitting back, and no one wants to deal with it. You go to a small family business and talk to them about building a Web site, they say, ‘Who is going to do it? Will people know where we are?’ If you really put your mind to it, there are so many developers of Web sites these days. But people don’t want to do it.” —Ben Janowski, industry consultant/JCK columnist
2 Differentiate the product
“The sameness of product is very sad. It’s an all-time low. There are very few stores that you walk in and don’t see the same kind of product, especially in diamond goods. You will hear about the new product that is in Basel and Hong Kong. But how much of that product is relevant to the commercial marketplace? I don’t see much innovation. When we talk about new product, we point to the tennis bracelet, which has to be 30 years ago; the Journey pendant, which had maybe one year; and three-stone rings. This industry can’t survive without promoting something new.” —Nicholas White, consultant, GLG Group
“The consumer wants vanilla with sprinkles. But the sprinkles are important. The challenge is to find something that’s classic but has enough individual detail that it caters to someone’s individual taste.
“Look at where the energy is in the fashion industry. It’s in designers. They create this momentum because they are always reinventing themselves. It’s that constant reinvention of the little black dress.” —Richard Lennox, group account director, De Beers account/JWT
3 Get back to quality
“I was taught if a diamond looks OK and faces up good you can make a nice piece of jewelry out of it. Consumers come in today and they say they aren’t interested if the diamond doesn’t shine.
“If the young consumers are spending a relatively large amount of money, from their point of view, and then you have something that, six months from now, they are not going to wear, that is a big negative. Long-term irreparable damage has been done with this kind of product.” —Nicholas White
4 Embrace fashion
“We need more fashion-oriented product. We need a trend that everyone gets behind. People in the fashion industry figure out the trends and sell them. But when De Beers launches something, the first thing you see is a Zale flyer discounting it. At least let it go through the season!” —Elizabeth Chatelain
5 Augment the materials it uses
“People have to broaden their horizons. They need to get more involved in alternative material and metals. The public isn’t ready today to pay the high prices of precious metals. Gems are going to get more expensive. A lot of people look at these alternatives and say, ‘That’s not the jewelry business.’ Nonsense. You talk to people in the bead business, they are doing very well. There is a segment of the public that is looking to buy jewelry that can’t afford $1,400 gold. And those companies that say high metal prices are going to go down again, that’s a pipe dream.” —Ben Janowski
6 Improve the shopping experience
“Consumers are not thrilled with the jewelry shopping experience. The words they use to describe it are boring and traditional and pressured. We are not doing a good job of making consumers feel comfortable or special in our stores. We have a huge consumer turnoff rate or people who say, ‘I will never go back to that store.’
“You go to Yelp and Google and look for jewelry stores, and you get the same comments from everyone: ‘The sales associates don’t understand the four Cs as well as I do’ or ‘They gave misleading information.’ Too many sales associates appear to be what they sometimes are—students looking for extra money. We need people with basic human relations skills who are informed, who are welcoming.
“There is not enough play in the industry. People are shopping for entertainment. You need to have ways for people to interact with the jewelry, so they fall in love with it. A lot of stores don’t let their sales associates wear jewelry. I think that’s a mistake. People should celebrate the product.” —Claudia Rose, director of brand strategy, Diamond Promotion Service/JWT
7 Develop innovative ideas at more affordable price points
“If you look at the watch industry, they have appealed to consumers’ fashion sense. Some of the companies are up 20 percent, 30 percent. They are not trying to sell watches to people who don’t have a watch; they are trying to sell watches to people who have more watches. The pearl industry has done that too; they’ve developed new products and done really well.
“The diamond and the rest of the jewelry industry need to develop that mentality. You have to come up with innovative designs and marketing and to reach out to that $500 to $3,000 middle price point with something very fashionable and very distinctive looking.
“The only person who did that really well was Yurman. He’s since moved upscale, but for a long time, his whole bread and butter was the $200 cable bracelet. Women are not going to buy another tennis bracelet, but they will buy a nice piece of diamond jewelry that catches their eye or fashion sense.” —Russell Shor, senior industry analyst, Gemological Institute of America
8 Remember older consumers
“The baby boomers are an unsexy opportunity group, but they are still the best consumers for our product. Younger consumers sometimes haven’t gotten the diamond bug yet. So, if you are doing an event and you’re hiring models, how about getting one model in their 40s, not just 17.” —Claudia Rose
9 Promote more than price
“Price promotion is a reality of the world we live in. But price has become the first thing we talk about. What people have to do is add value in a way that makes them distinct. I have yet to meet a man who, when he hands over a piece of diamond jewelry, says, ‘Honey, I got a great bargain!’” —Richard Lennox
10 Promote intrinsic value
“I think the industry is making a mistake ignoring a product [gold, etc.] that has increased significantly in value. We could spread the message: Your jewelry is worth more today. You shouldn’t be afraid to buy more gold. The fact that it’s expensive is actually a good thing. When you tie those types of sentiments together, jewelry begins to get back that aura that makes it special.” —Nicholas White