Most people associate the word “marketing” with advertising. That’s like saying Harry Potter is “just a magician.” Harry Potter is also a wizard, a book-selling phenomenon, a merchandising force, an advocate for literacy, and a role model for strong adolescent social values.
Successful businesses think of marketing in holistic terms. Apple Computer actively manages its public persona and all of its consumer “touch points,” from the iconic backlit logo on the lid of every laptop to the types of musical bands recruited to appear in its iPod commercials. Apple applies consistent top-shelf marketing discipline. The result is a company whose stores are jammed with customers when other stores in the same mall are virtually empty.
The retail jeweler’s marketing “bucket” includes these elements: print advertising in local and regional magazines; ZIP code– specific split runs in many national magazines; local newspaper, radio, and cable television vehicles; Web sites, search engines, and e-mail newsletters; Yellow Pages listings; direct mail; catalogs; billboards; in-mall signage; storefront awnings, window treatments and street clocks; in-store special events like trunk shows, designers’ visits, and appraisal services linked to remounting programs; charitable initiatives in the local community; showcase and floor-plan designs; monthly billing statements; credit/finance terms; promotions; and thank-you cards. It all contributes to your image.
Of the list above, what percentage is dedicated to your store’s image—i.e., the store’s brand identity, not just the brands the store sells? What percentage of your marketing has a co-op element, and does it look/sound/feel like your nonsubsidized marketing elements? What percentage of your sales should you spend on store image versus co-op product ads?
There is no single formula, but you need to develop the right balance for your store’s needs. A newer store, for example, needs to focus on its unique brand-identity elements, whereas an established store needs to reiterate the service and value it delivers to customers as well as the quality and variety of brands it carries.
Beware predatory co-op advertising policies, which can diminish your store’s identity and absorb a disproportionate share of your marketing budget. Multiple competitive retail store listings and small store logo placements, often without even basic contact information, are common and represent poor value, especially when you’ve paid up to 50 percent of the cost of the ad and your presence is only 10 percent to 15 percent of the message.
Timepiece companies are particularly jealous of competitive watch and branded jewelry advertising. They offer retailers incentives to spend larger percentages on their brand’s advertising throughout the year to qualify for “unlimited” fourth-quarter co-op dollars, not pegged to actual sales, at a fraction of the cost to the retailer. But such a brand may represent 20 percent to 25 percent of your gross sales and only 12 percent to 15 percent of your gross profits (because of thinner margins) yet represent 75 percent or more of your total marketing expenditures.
As a result, you can become a destination store for the brand for some people but exclude a larger percentage of prospective customers who aren’t in the market for the brand and don’t know about your other products and services. It can also reduce funds for other initiatives. Don’t be afraid to get outside help from advertising agencies; public relations professionals; and trade associations like the Platinum Guild, Diamond Promotion Service, and World Gold Council.
The counterpoint to this is the golden glow cast by the featured brand’s values and the logically assumed sharing of those values by the stores carrying the brand. Exclusivity is a luxury as long as the brand remains relatively undiscounted and not readily available. Many jewelers feel they benefit from carrying well-known branded lines like David Yurman, Rolex, and Mikimoto, because their name recognition helps build foot traffic and develop ongoing sales relationships.
Ask yourself: “How hard is it for my customers to buy the brands I carry elsewhere? Is it a good value for me and my store’s persona?” Top-tier brands will build wall units, window displays, and permanent outdoor signage in exchange for prominent positions in your store, additional dedicated counter space, and increased inventory commitments. Just be sure you don’t become captive to the big brands at the expense of your other lines and services.
For stores that don’t carry marquee names, there is no lack of excellent brands available with handsome product and ready co-op programs, like Breitling, John Hardy, Marco Bicego, Omega, and Roberto Coin. In fact, carrying alternative fine brands can help distinguish you from larger mall-based guild independents and quality chain jewelers. Yet another option is to focus on custom design or small artisan lines that are highly distinctive and earn their cachet from being hard to find.
If you use branded co-op marketing, be an active partner and advocate for your store’s identity and personality. Analyze what you’re doing, specifically with each marketing element, and be sure you’re not only consistent but also representing your store’s values and ethics.
With so many marketing elements to manage, designate people to look after specific areas and report back to you. Strive for an elegant balance and marketing style that best represents your business.