Hopes and expectations are that this will be an improved Christmas shopping season with an increase in sales for independent jewelry store owners. The consumer is coming back but, thanks to the recession, there have been some significant changes in their buying patterns and psychology. The more you understand this shift in consumer mind-set the better prepared you’ll be to adapt to the new marketplace and to prosper during the 2012 holiday shopping season.
Overall, it’s a much more competitive marketplace out there today and the competition is far more than just other retailers. (And more than just catalog and online retailers.) The challenge is this: Shoppers have fewer and fewer dollars to spend “at retail.” More disposable income is going to home mortgages, education, health care, taxes and “experiences” (weekend getaways, quality time with family, etc.).
Unconditional loyalty is no longer part of retailing. All retailers must earn – and earn again – their customers’ loyalty. The era of “Retail Populism” is here – power to the shoppers. They speak out – or walk out – with gusto! Shoppers vote with their feet and their pocketbooks. Shoppers will be loyal, but on their own terms. Now more than ever it’s time to use your database of repeat customers (and I hope you have one). Send your best customers a postcard or personal letter offering preferred discounts on select merchandise or a 10% saving coupon on any one item. Reach out; be aggressive when it comes to getting repeat business from established clientele.
The Purposeful Shopper
The new consumer is increasingly demanding: short on time and long on value-seeking. Consequently, many of these shoppers want to be “pre-sold.” As they set out on a shopping trip, they already know which merchandise they plan to buy and the particular store where they expect to find it. Less time is being spent on each trip to a shopping mall. And despite the quantity of stores in a given mall (100? 200?), shoppers are entering only 1 or 2 stores per trip. Shopping around as a leisure-time activity has definitely waned.
These shoppers are not inclined to linger over their shopping decisions. When making their selections, they rely heavily on graphics, signage, displays, product information, and in-store promotions. Many of them use brand names (or well-advertised brands) as a shortcut in their decision-making. If they have confidence in the brand, or a high degree of awareness of the brand, that will affect their product choice.
There’s always been a contingent of shoppers that seem to thrive on finding a bargain; it’s almost a hobby for them. This bargain hunting mindset has expanded in part due to the downturn in the economy and in part due to Internet based direct-to-the-consumer diamond and jewelry dealers. Make sure you have merchandise with a sufficient mark-up to take into account that consumers these days want (almost expect) a discount whether advertised or not. Once again, even if you own a store where you don’t discount, consider sending your preferred customers a special holiday invitation to come in and shop and save on selected merchandise.
Lower Price Points
Almost all of our clients and everyone we talk to report a significant drop in average sale price points over the last several years. Independent jewelers must sell more items to make the same gross sales they were making just a few years ago. Even high end stores with high priced one-of-a-kind items have to adjust and carry a wider variety of mid cost merchandise. Before we get into the holiday buying season, make a final review of your inventory and make sure you have sufficient merchandise to cover all price points.
While on-line diamond and jewelry dealers may be hard to compete with on price, they generally get low marks on service. Making a point to educate, pamper and pay attention to the wants and needs of each customer will help make a sale. Price matters, but so does service, before and after the sale. Consider the following consumer-winning tips
- convenient shopping hours (varies by customer group, of course)
- perception of easily available parking
- logical store layout
- good signage and graphics
- readily accessible product information (whether from the sales staff, “shelf talkers”, information kiosks or in-store terminals with access to your website
- the right amount of merchandise selection in the product categories that the customer is seeking
- discounts and special promotions
- no-hassle sales transactions
- no-hassle return policies
The good news is that the consumer is back, but buying habits have changed. Make sure your store operation and methodology mirrors this new consumer psychology and you’ll be more likely to prosper this coming holiday season.
Bob Epstein is CEO of Silverman Consultants, LLC. Offering a legacy in sales strategies for jewelers since 1945, Silverman Consultants provides guidance to store owners seeking to turn around a business, sell off unwanted inventory, or liquidate an entire store. With offices located in Charleston, SC; New York, NY; and Saskatoon, Canada; the company helps jewelry store owners and chains formulate strategies designed to maximize revenue in times of transition, whether due to retirement, store closing, or simply when needing a boost in sales. For more information, visit www.silvermanconsultants.com or call Bob direct at 800-347-1500.