by Ellen Fruchtman, CEO
It’s no surprise the luxury landscape is facing challenges. In the U.S., luxury spending saw a 12% decline in March, according to Yahoo Finance. You would have to live under a rock to not know why. The cost of living, and practically everything is on the rise, so it’s no wonder consumers are cutting back on discretionary spending. Our industry doesn’t live on that super-affluent customer alone. We survive on the aspirational customer and that younger customer not only lacks loyalty, they are considerably more price conscious. The chant the last few months has been the same for many of our clients: the number of transactions and new customers has grown, but the average sale is dipping. So we have to work harder. And smarter. As it relates to the lab-grown issue, you need to think about who that buyer is. It’s all about the price tag. Yes, you should spend time explaining the differences. Nine times out of ten they already know. It’s less money and it’s bigger. Ask yourself, do they warrant the same amount of time as the natural diamond buyer? Are you making considerably less? You may want to consider changing your sales approach. Maybe you have set loose diamond LGD pricing based on carat size clearly displayed. That’s where the working smarter comes in. Of course, they should feel special. But, quite frankly the bells and whistles don’t apply. That’s just good business.
A Few Smart Ideas
Being smarter also means opening yourself up to other revenue-generating ideas you may not have considered prior. Maybe you’ve considered them but failed to act upon them. There’s no better time to just do it.
Small things like a beautiful display of self-purchasing add-ons right at point-of-sale with pricing. That’s a no-brainer.
Have a decent repair business? You should be providing every one of those customers an offer to come back for something new. It is far easier (and less expensive) to secure more business from an existing customer than a new customer. You have to spend advertising and marketing money on them!
Communicate your offerings. Don’t assume any of your customers are familiar with all you have to offer. A simple handout works with all of that information. Have you ever considered taking that customer on a tour of your store? Show them the shop; introduce them to your bench jeweler and custom area. Speak to them about your offerings as you move about. You would be surprised how many of your current customers have no idea of everything you do!
Word-of-mouth is always your greatest source of new customers. Help it along. Have a good referral program in place? You should. They’re very easy to do.
Cross promotions with like vendors. Another no-brainer. Know some upscale realtors? They always provide a nice gift to the new homeowner. Why not provide a nice gift card from you but coming from the realtor? Luxury car dealer. Perhaps consider a party together in their showroom or yours. If it's theirs you rent some jewelry cases; yours some high-end cars in your lot. You too can provide a nice gift card to a high-end new car buyer when they pick up the car.
Open yourself up to bigger ideas that are big business for other retailers. Consider your own jewelry rental business. According to Statista, the second-hand luxury goods market revenue in North America is estimated to be worth around 2.6 billion dollars! Have you heard of The Real Real? They’re renting some high-end jewelry on that website. You may think it’s a big undertaking, but it’s not. This is a market that is booming. Quite frankly it’s been booming for years! Why not a little piece for you? I would also suspect some of the borrowings may turn into sales.
While there is no clear picture of what the remainder of the year may look like, it takes a little bit of effort to make up for lost revenue. It’s not that hard to be smart.
We would love to talk about some other ideas we have up our sleeve. Contact suits@fruchtman.com to see what we can do for you!
