In his new book, Why Customers Do What They Do: Who They Are, Why They Buy, and How You Can Anticipate Their Every Move, retail expert Marshal Cohen outlines how retailers and marketers can reach consumers by understanding their needs and wants. Cohen, chief industry analyst for NPD Group, talked with JCK about how some of the concepts and strategies he details in his book can help jewelers improve their businesses.
Your book talks about “relationship retailing”—connecting with customers in a way that makes them comfortable buying from you. How does this apply to jewelers?
One of the advantages a jeweler has over other retailers is a built-in relationship with the customer. People come to a jeweler to make a major investment, whether it’s buying a $100 item or a $10,000 item. Diamonds, in particular, can be such a blind item that there has to be a tremendous amount of trust built into the relationship—they’re almost looking at the jeweler as a mentor.
Based on your observations of the changing marketplace, where do you see growth opportunities for the independent jeweler?
We’re seeing more and more children influencing family purchases. That’s an area a lot of jewelers aren’t taking advantage of. You need to learn to market to younger people too, not just their parents. That may mean adding some styles and brands that appeal to a younger customer. If you can attract these young people as customers now, you can build a relationship with them that will last a lifetime.
Another opportunity for independent jewelers is to capture some of the department-store business. The jeweler has a leg up on the department store, which often has inexperienced people in the jewelry department who may have been selling lamps the week before. There is a thriving middle area of the department-store customer base that is aspiring to go upward. The independent jeweler can capture some of that business by emphasizing things he has that the department store doesn’t (such as better quality and service, unique product, etc.). It’s such an easy target; it surprises me that more jewelers don’t go after this customer. These days, people don’t really want all the hassle of going to the mall and shopping in a department store. Jewelers need to figure out how they can capitalize on that. It’s a huge market ripe for the taking.
How can branding help jewelers expand their business?
Branding becomes the ultimate word of mouth. It is the leading driver of why a new customer comes into your store. Branding helps you to create relationships with both existing and new customers. Aside from the actual product brands you carry in your store, developing a unique brand image for your store is one of the most critical strategies for jewelers and other retailers today.
What role do you see technology playing in the retail jewelry industry?
There’s no question that the jewelry industry needs to get into the 21st century. Jewelers know they need to step up and start implementing some of the financial, inventory management, sales, and market research technology available to them.
But knowing and doing are two different things. A lot of jewelers still don’t even have a Web site. What often happens is that, when the next generation takes over, they computerize the business—and there is a lot of butting heads as the older generation is resistant to change the things that have worked for them for many years.
Through technology, jewelers have the ability to really create an understanding of lifestyle marketing to their customer base. Many men believe that the watch they wear defines who they are. By the same token, many women believe that the jewelry they wear defines who they are. Jewelry is an investment in a certain lifestyle for them. Technology can help jewelers discover what really makes their customers tick, and can also make their business more efficient and profitable.