Lipstick On A Pig
Unless you’ve been hiding under a large piece of rough diamond, it’s hard to escape the fact that sales are down in the luxury market. In fact, according to The Luxury Institute, luxury retail has reported a 20% drop in retail traffic. And, according to a new Unity Marketing Study on affluent shoppers. The study is based on HENRY’S which stands for “high earners not rich yet” whose incomes are $100K – $249.9K and the truly affluent group consisting of those that make $250K plus. The results are mixed at best. These groups are just not spending on big ticket items and have no intention of doing so over the next twelve months. In fact, 36% of this study indicated their trepidation with the economy and said they simply feel we’re worse off.
It is going to be challenging. Are you up for that? Rather than dwell on what is most certainly lying ahead, pick yourself up by your boot straps and prepare now.
Here’s what you should be doing:
• Keep your inventory in check. Stop the insane buying. Be cautious about stocking very high-ticket items. How many jewelry shows do you really need to attend? It’s expensive to do so. Do you need to really kick some tires at this stage of your business? Pick a few key shows and be done.
• Tell the brands that sell online direct to your consumer you are done with them! And, if any brand (and you know who they are) tells you they can sell their product online and you can’t, tell them to go to a very, very warm place. Take a stand. If you belong to a large buying group or any industry organization, implore them to take a stand for you! There is strength in numbers. For the love of, grow some you know what already!
• If you are a member of an organization which does not have a direct impact on growing your business, stop belonging. If the only reason you belong to something is for camaraderie or to get together with some buddies, I’m fairly certain you can find a less expensive way to do this. How about a conference call once a month?
• Build your custom design area. People are looking for the unique and they can’t shop it online! And, make sure you communicate in your marketing that custom design is not more expensive. Your customer thinks that it is. We just conducted some recent research that backs up that fact!
• Take a hard look at your staff. Are you over-staffed for what will most likely be a lackluster holiday season? If you look at that sales associate and the first word that comes to mind is “mediocre”, it’s time to move on or trade-up. You need people who are involved in your community and who are real schmoozers*! You need people who know how to pick up a phone and call a customer. You need people who will think of ways to drive their current customers back to the store. When was the last time your customers had an appraisal? Their jewelry checked?
• Do not cut your marketing. That is literally the nuttiest thing you can do. Business is bad, so how about we stop trying to get more people in the door? Yep, that makes perfect sense. Do look at it critically, however. Do spend appropriately in appropriate places. And, at the risk of sounding self-serving (and I’m really not trying to do that), look at professional people who market for a living to help you! It’s far too complicated now. And, trust me, you are most likely doing it wrong or worse yet, wasting money. You know how you feel about Sam’s Club salespeople selling fine diamonds? That’s how I feel about you doing your own marketing.
• Take a critical look at your website. If it isn’t perfect, get it perfect. Everyone is looking there FIRST. And, it has a direct impact on how the customer perceives you. Don’t believe me? Again, we are completing some research which shows this to be true. Stand by. But, in the meantime, do something about it.
• Think about ways to get new people, who mirror your best customers, in your door. Think about a referral program. Think about harvesting solid data that shows you where those people can be found. You would be surprised to learn how much information is readily available in a Big Brother sort of way. Actually, don’t “think”, just do.
• Get people in your community talking about your business. How? Do something “special”! Do the unimaginable. Stop thinking small. Stop thinking it won’t work for your store or your customer. I am so sick of hearing this. Every year we meet with our clients and present what we call “Big Ideas”. In the well over 15 years, we’ve developed some amazing ideas. Know how many Big Ideas been adopted? Maybe 2-3. Want to know why? Because no one is willing to try the unimaginable. It’s time. By the way, the few that try the Big Ideas are the ones that are seeing increases in the face of adversity. Funny how that works.
When the 2001 recession hit, Leonard Lauder (then Chairman of Estée Lauder) noted that women facing a down economy turned to beauty products. When they stopped buying big luxury, they started buying cosmetics. It was coined and known at that time as the “Lipstick Index”. And, we are most likely facing it today.
But, my very wise grandfather also said, “You can’t put lipstick on a pig”. And, that pretty much says it all.
* Definition: To chat to (someone) for the purposes of self-promotion to gain some advantage. From the Yiddish word schmues.