by Ellen Fruchtman, President
By now you’ve probably read countless articles about the state of retail. There have been countless articles about its demise. There have been countless articles about what many believe to be permanent changes.To sum it up, here’s what we know:Independent guild jewelry stores thrived in 2020. Yes, there were some store closings for a limited time, but overall, the industry bounced back with a vengeance. As of this writing, although actual numbers have not come our way, based on conversations, for most (if not all) of our clients, Q4 sales numbers surpassed their wildest imagination. This did not solely pertain to high-end retailers. Middle of the road retailers with mid-range price-points also saw dramatic increases. Covid-19 restricted travelers and those with disposable incomes (of which there were many) spent their money on meaningful gifts. And finally, unlike the crash in 2008, independent retail jewelry stores reaped the benefits of a very lousy situation. There was little traffic in malls, which were already seeing a steady decline. Several big-box stores are closing a multitude of locations, if not closing for good.2021 will be a better year for fine jewelry. Travel will still be somewhat restricted. Most individuals will still be reluctant to go on a luxury cruise or travel out of the country. As with most viruses, new strains are emerging. And, not to be Debbie Downer, it will be some time before we return to life as we knew it pre-Covid. Now, people currently say how the pandemic changed their life forever. People say this experience has made them more aware of what really matters. Cherishing loved ones and giving gifts with meaning will continue in 2021. Which means the industry will remain strong.There will be more engagement rings sold. There will be gift-giving of fine jewelry and timepieces. Sales will continue to thrive. But, the question is, what have you learned from this experience? And, what takeaways should you implement moving forward?In fine jewelry, there are three key elements to retail success:
Marketing
Inventory
Staff
What changes must you implement for each to kill it in 2021? We certainly don’t know what lies ahead well beyond 2021. As we know, people have short memories. As things do get back to something that resembles pre-Covid life, we will be back to sharing that disposable income on travel, sports and entertainment, dining, and the vast number of experiences that make up what really is the competition to the jewelry industry. See, your competition never has been that other independent down the street. It was, and always will be, what was just mentioned above.Let’s talk about what needs to be done...shall we?MARKETINGOnline marketing must be the cornerstone of your marketing strategy. A 2020 Study conducted by The KNOT couldn’t make it any clearer - especially for the bridal customer. There was a substantial increase in the amount of time this customer spent online to do their research. Additionally, many connected with Social Media and via online consultations. And, although the actual numbers may have increased with online engagement ring purchases -- the study shows that nearly a third purchased online, the majority (63%) continued to purchase in person. There was a slight drop in average spending, but many viewed significantly fewer rings (8 compared to 15 in 2019) prior to making the decision. Local retailers were still the preferable place to shop at 51%.Although a third of the respondents did purchase online, it may prove to be out of necessity in some cases and so it will be interesting to see if that number overall declines in the near future. Either way, your marketing budget needs to be predominantly online for this buyer. Although the study is about the engagement ring buyer, I think we can safely assume that most eyes were online in every demo category.Since all eyes are online, make sure your marketing budget includes a healthy budget for updates and changes to your website. According to another study conducted by WeddingWire, some 45% of all engagement ring buyers start looking approximately five months out. If you are doing the right job in driving them to your site, they should be seeing it more than once. Update. Update. Update. There shouldn’t be a single month where your marketing dollars decrease for this audience. They are looking all the time!INVENTORYSince you are fresh off the holiday season, pay attention to what you sold. Talk to your staff and get a sense of what customers were asking for that perhaps you didn’t carry and therefore didn’t sell. That’s the new product you should be looking for. Nothing more and nothing less. We learned that average sales were up (even though store traffic was down). People are spending more money on their jewelry. Think about that as you replenish your inventory and look for new. Consider talking to your customers about what they’re interested in! They may not want to spend the time in your store for some level of focus groups and research, but why not pick up the phone and have a brief conversation with some of your better customers. They’re still home! Including them in the conversation of inventory also makes them feel their input is important and that they’re important to your business. And they are.STAFFPerhaps the single most important aspect of your business is the people who represent you. Keep your staff lean, but the important part is to keep them mean. Training could not be more important. Make sure they are well-versed in all aspects of clienteling. They need to be comfortable picking up the phone. They have to be comfortable in all aspects of digital and know-how to communicate online and on-camera! They have to be comfortable selling larger price-points. They are your spokespeople. There is no reason why they shouldn’t be presenting your business and products they love on their personal social media pages. Great salespeople live and breathe what they do for a living! NOTE: You should be taking a look at their personal social media pages prior to hiring. Do these people represent your culture? Since the day is perhaps not filled up with as many people walking through the door, this is the time to set up profiles of each customer. Note their likes and dislikes. Attach some personal notes to each profile. This is where you will shine against your retail competition! As an owner, set up a schedule of topics for your own internal meetings. Make sure those internal meetings happen -- preferably weekly. View some great TED Talks that have to do with all important aspects of your business. They’re free and so many are very, very good! 2020 was a year many want to forget for obvious reasons. For many of you (from a business perspective), it was also a year to learn from. It taught you how to pivot and remain successful. And, if you’ve learned anything, you learned how business (and life) can be so unpredictable.So get ready for 2021 and beyond. It’s going to be a helluva ride.Some interesting articles:https://www.yahoo.com/now/knot-2020-jewelry-engagement-study-141400491.htmlhttps://go.weddingwire.com/newlywed-reporthttps://www.theknot.com/content/how-much-to-spend-on-engagement-ringLooking for success in 2021? Contact suits@fruchtman.com to take you to the next level.
