The Big Story: The New Rules of Sales
30 Tweaks to Selling Jewelry in a Post-Recession, Post-Internet, Post-Boomer World
BY EILEEN MCCLELAND
Published in the April 2012 issue
Nagging economic doubts, astronomical gold prices, online competition, fashionforward female self-purchasers and a mysterious new group of bridal shoppers glued to the Internet: All are combining to present a confusing array of challenges to the owners of traditional jewelry stores.
What are you — the retail jewelry store owner — to do when engagement-ring shoppers act like they know more than you do, former big spenders don’t revel in conspicuous consumption, and standoffish newcomers mutter, “Just looking,” when you ask them if it’s raining outside?
Tweak your sales strategy, while keeping in mind how your store itself, and your website, advertising and customer service affect your sales.
But first, shake off what Shane Decker calls “post-recession jewelry store disease,” a belief that no one can afford to buy what jewelers used to sell a few short years ago. Consequently they’ve given up on even trying to sell higher-ticket items, says Decker, president of Ex-Sell-Ence and one of the “Monsters of Sales” of The SMART Jewelry Show in Chicago this month.
“Owners have developed a poverty-level mentality and there’s a trickle-down effect on the sales people, who assume people can’t afford it,” Decker says. “In the last three or four years, the average ticket has gone way down. I like silver and beads in jewelry stores — when we use them correctly. But we don’t want to give the consumer the idea that we’re just a silver store.”
Decker points out that even in areas of the country where unemployment seems stuck near 10 percent, most Americans are working and a fair percentage of the affluent are buying Mercedes Benzes, expensive homes and, yes, 2-carat diamonds. According to data from the Edge Retail Academy, gross sales, number of sales, average sale, even repairs were higher in December 2011 from the same periods in the previous two years.
In 2012, shoppers want value for their money more than ever before — but that doesn’t mean they expect prices to stay low or that they want inferior products. Value means different things to different people, but in general, it means the purchase is fashionable, high quality, has meaning and will be a classic for years, says Pamela Danziger in her 2011 book, Putting The Luxe Back in Luxury.
Of course, there have been changes in the shopping landscape in the past few years, which will only become more pronounced as new generations take center stage as engagement and luxury consumers. By 2008, when luxury spending hit bottom, the leading edge of baby boomers were at an age at which they would naturally scrutinize their spending habits as they prepared for retirement. Because this demographic shift coincided with the slump, luxury marketers and retailers realized sooner than they might have the need to make adjustments for the next generations of shoppers, Danziger says.
There’s a lot of room for growth in the Gen Y market (born between 1977 and 1995) given that for 58 percent of jewelers, Gen Y (aka the millennials) accounts for less than one-quarter of their sales. Three in four jewelers recognize they will have to invest in technology to appeal to Gen Y and generations to come. They’re right. Twenty percent of Gen Z girls ages 12 and under regularly visit online shopping sites already, according to Grail Research. Gen Z, in particular, born between the mid-’90s and 2010 prefers communicating by text and social messaging, and considers e-mail old-fashioned.
According to Darrell Rigby, author of a recent Harvard Business Review article, The Future of Shopping, the challenge for retailers is to integrate the countless ways they can interact with customers into a single seamless “omnichannel” experience — using websites, physical stores, kiosks, direct mail and catalogs, call centers, social media, mobile devices, televisions, networked appliances, home services and more. Otherwise, they risk being swept away.
What that means right now is that if you extend the proper online invitation, Gen Y will show up in your brickand- mortar store to buy. “These are called ROBO shoppers (Read Online, Buy Offline),” says Jason Ryan Dorsey, Gen-Y retail expert and author of Y-Size Your Business.
Once in the store, captivate a Gen Y by asking easy questions and telling stories. “Tough questions make us want to leave,” Dorsey says. “Gen Y is looking for a trusted resource — not another jewelry store.”
Here are 30 tips to tweak your sales strategies to meet some of the challenges of 2012 and beyond:
1. OFFER PRIVACY. Martin Shanker, professional trainer and president of Shanker Inc. in New York City, says that many luxury buyers would purchase more if they could be less visible when making those high-end choices. But retailers often don’t factor in the need for discretion in the sales process. “Consequently, increasingly clients are making purchases online or in cities other than where they live,” Shanker says. “Luxury sales teams need to be extra sensitive in identifying these types of buyers and take steps to offer them increased privacy.” Consider inviting them to a more private room or viewing area, away from the selling floor. “The trend to be less conspicuous has not stopped the luxury customer from making large purchases. Therefore, sales professionals need to be cautious about misinterpreting a desire for privacy as a lack of interest in buying and unintentionally trading the business down.”
2. MAKE IT PERSONAL. Barry Moltz, small-business consultant and author of BAM: Delivering Customer Service in A Self-Service World, says online retailers are offering a kind of “faux personalization” that has become an expectation. When he signs on to Amazon.com, for example, the site greets him by name, and knows what he’s bought in the past and what he might like to buy in the future. So, if you can’t remember all of your customers’ names and everything they might like or have ever wished for or purchased, collect all the information you can from your customers and get your POS system up to speed to do the work for you. “Amazon always remembers who you are, but does your local retail store?” Moltz asks.
3. TRY OFF-THE-WALL IDEAS. The new 7,000-square-foot Diamond Vault in Sarasota, FL, owned by the Chokr family, features a distinctive, 13-foot Diamond Wall. The wall can showcase up to 250 diamonds in a matrix of varying size, shape, weight, color and clarity, which allows customers to see a large selection of diamonds side-by-side for a better comparison. All of the diamonds on the wall are available for purchase either as loose stones or for custom settings. The area facing the wall has 800 engagement ring mountings on display. “It makes it easy to discover something yourself,” Chokr says. “Our product sells itself and the environment is conducive to shopping but not being sold to.” Customers may select a diamond from the wall for closer examination under a microscope in one of the private consultation rooms. During the first week the store was open in February the Chokrs sold three diamonds from the wall to Gen-Y engagement-ring shoppers.
4. KNOW YOUR GEN Y CUSTOMER. Gen Y can be intimidated walking into a traditional store, says Jason Ryan Dorsey, author of Y-Size Your Business. There are a few good reasons for this feeling: 1) Face-to-face communication is one of Gen Y’s least preferred methods; 2) Gen Y doesn’t want to look dumb; and 3) Gen Y is accustomed to finding all their answers via a screen. Dorsey offers three ways jewelry store owners can make their store more welcoming to Gen Y: 1) Shake our hand and welcome us to the store. When you do this it makes us feel important and less like we’re being sold. 2) Show us options on an iPad. It’s much easier to create interaction when you show us designs and possibilities via a screen. This way you’re talking with a screen rather than eye to eye. Once we find something we like, we’ll want to see it in person. 3) Tell us we’re asking good questions. Gen Y wants to know we’re not dumb. The most effective way to do this is to say ‘That’s a great question.’ You can even offer us a list of ‘great questions to ask’ when looking for jewelry.”
5. MAKE YOUR WEBSITE TALK. Dorsey consults with many companies on how to make their websites more engaging for Gen Y. “A few must-do’s: 1) Incorporate video, especially from YouTube. Gen Y loves video above all else and YouTube is our most trusted source. 2) Add ratings and reviews. Our new research with Bazaarvoice showed how critically important it is for Gen Y to read the reviews of strangers before they buy online. 3) Show people our age wearing the jewelry.”
6. MAKE YOUR WEBSITE WORK. Your website has to be cool enough to keep a 27-year-old engaged for hours but simple enough for a 50 or 60-year-old to use. “Most websites suck,” says Shane Decker. “Some of them are five or 10 years old. You get a 27-yearold research junkie online, thinking ‘Moses designed that page! I’m not going into that store.’ Put a virtual diamond inventory and a ring builder on the Web page so a bride can go to your site at 9 p.m., design her own ring and go to the jeweler the next day and say, ‘Can you make this?’ And you can say, ‘Yes, I can!’”
7. GREET AND GUIDE. At the Diamond Vault in Sarasota, FL, a concierge greets guests upon arriving, offers a beverage (beer, wine, champagne, coffee, etc.) and helps direct them to the appropriate person or area in the store — i.e. service/repair, vintage/estate jewelry, engagement rings, fine jewelry, etc. This approach can cut down on the “just looking” response since the concierge isn’t directly trying to sell them something. At the Diamond Vault, the concierge, who is a graduate gemologist, is also equipped with a computer and a phone and can easily answer customer-service questions, no matter how technical they may be.
8. DON’T DELAY E-COMMERCE. It is a mistake to move slowly into e-commerce, says Dorsey. “Companies need to acquire Gen Y customers now, while we’re still figuring out our loyalty and seeking a jeweler who can be a resource.
If that means you first reach us with an inexpensive item online that’s OK, because it’s our lifetime value that is most attractive rather than maximizing profit on our first sale. Over time, our purchases grow in line with our earning power and our trust in a specific jeweler.”
9. AD STRATEGY: FUNNY IS THE NEW SEXY. Gen Y responds to positive, straightforward and informative ads and those with edgy humor. “If you are not funny, you don’t speak their language,” says Bruce Freshley, president of Freshley Media. Based on the December 2011 results of Freshley Media’s “Engageables” focus group study of young adults, ages 24 to 32, they want to hear from other millennials and will tune out pompous old radio announcers telling them how great XYZ jeweler is. They grew up watching Friends and Seinfeld and so they like ads with dry humor and straight delivery. Sappy emotion or huge marketing claims don’t work. “Even big sales and discounts seem to be lost on most Gen-Y’ers. They just don’t buy it. In the Web age ... you just Google a product and get all you need to know including pricing. These kids have learned through experience that they can usually beat a local offer on the Web somewhere.”
10. HEIRLOOM IS A MAGIC WORD. Affluent customers rate their family and emotional health as the most important priorities in their lives, according to Unity Marketing. Watchmaker Patek Philippe recognizes this with its Generations campaign. The gist of it is: “You never actually own a Patek Philippe. You merely look after it for the next generation.” Ivanka Trump put a modern spin on the heirloom idea when she opened her own store and created a collection of “heirloom chic” jewels. “We all appreciated the vintage styles that are so popular these days, but didn’t want to wear our grandmother’s jewelry,” she says. “We wanted our heirlooms more vibrant, fresher, but with the quality and appeal of the most sought-after jewels in the world.”
11. OFFER LAYAWAY. Delayed gratification, in the form of layaway, has made a comeback, according to a January article in The New Yorker. It makes historical sense, since layaway first proliferated during the Great Depression, when credit dried up. Now, as then, credit card companies have tightened their standards, dropped customers and shrunk credit limits. Other customers prefer layaway as a way to manage their money and trade interest payments for a small service fee.
12. SET A BUDGET FOR THE BANDS. The current prices of precious metals make it important that you hint at the cost of the wedding band early in a bridal sale, says Michael Lebowitz, vice president of Buxbaum Jewelry Advisors. “Today, the typical wedding budget is quite limited, and yet everything — the flowers, the cake, the photographer, the venue — is important to the bride, especially if it is her first wedding. If jewelers don’t make that sale early in the process, or at least point out the need to keep X-amount available for the groom’s wedding band, they will miss out.”
13 NO SIR! We know that you’re just trying to be polite. But according to Monster of Sales Harry Friedman of the Friedman Group, 95 percent of thousands of people he has asked, hate being addressed as “Sir” or “Ma’am.” It makes younger or middle-aged people feel older and reminds more mature people of the age they’re trying to hide.
14. DON’T APOLOGIZE FOR THE PRICE. “It’s all relative,” says Shane Decker, president of Ex-Sell-Ence. “We thought it was high when gold was $200 an ounce and we thought it was high when gold was $800 an ounce. When I got married, my wedding set was $1,000; now, maybe it’s $8,000. Cars go up in price, and we don’t talk about the price of tires and the price of steel.” If the salesperson acts like it’s a lot, tries to justify the price or apologizes for the price of the metal, the client thinks the sales person thinks it’s marked up too high and leaves. Sell it on the merit and romance and the reason, not the metal. We sell hope, sentiment, memory, love, forgiveness. Listen for trigger words — like my wife’s always dreamed of ... We’re just getting engaged .... My son came home from Iraq. Make a big deal of the reason, before you discuss the price.”
15.EXPLORE NEW MARKETING OPTIONS. A company called Truaxis allows retailers to team up with banks to get their messages delivered on bank statements. Potential customers are chosen based on past spending behavior. “We would come up with a data set that indicates there is a mother in the house (for Mother’s Day), or someone who shopped at a competitor or bought a lot of costume jewelry,” says Jen Millard, managing partner of Retail Growth Partners and chief revenue officer of Truaxis. “A retailer, hoping to convert them, would give us a promotion that gets inserted into their bank statement. We take that offer and only show it to the customer that it’s most relevant for. The retailer only pays if the customer redeems the offer.” So far, the opt-out rate is less than 1 percent.
16. ADVERTISE EVERY DAY, says Bruce Freshley of Freshley Media, in order to dominate your market. Pick one medium and own it. “To the average customer, all jewelers are pretty much the same,” Freshley says. “Change the way they think, and you can change the way they spend money. If you are not top of mind you are out of the mind. You do not exist.” Local radio is still very viable for young adults ages 25 to 34 years old with music and connection to the local scene being the key factors.
17. IDENTIFY THE DECISION MAKER. If a family of shoppers enters your store, it’s important to identify the ultimate decision maker up front, says Shanker. “This knowledge can help guide the conversation and purchase suggestions. However, it is extremely important to keep in mind that the other member(s) can be influencers who may even have the power to say ‘no.’ Often sales professionals err by failing to realize that although the secondary buyer cannot say ‘yes,’ he or she can say no.’ All parties need to feel their views are being listened to and considered.”
18. CHECK UP ON PHONE MANNERS. Blogger Kare Anderson (www.sayitbetter.com) says the four most frequent complaints Americans have about clerks with whom they speak by phone are that they: Speak too fast, don’t enunciate clearly, don’t sound like they care and don’t propose ways to solve a problem. Agree on the exact greeting and tone of voice for answering your store phone. One Italian clothing chain asks its clerks to listen to audiotapes of melodic, rich voices saying the greetings that management believes most represent the style of the store. Practice with each other until you are proud of what you hear.
19. STAY IN TOUCH. If a woman says she’ll have to think about it, she probably means it, says Bridget Brennan, author of Why She Buys. Men often believe this is code for “I’m not interested,” but women put a lot of pressure on themselves to get a purchase right. They will often be impressed if you actually contact them to follow up. Women want to buy from someone who values their business.
20. GO LIVE. It’s not practical for everyone, but if you’re cultivating e-commerce and you have a full-time social-media or marketing associate, consider chatting — offering customers online help in real time. (This can also be outsourced to a larger company.) “Real-time chat is quickly becoming a requirement to help your online clients,” says Moltz. “Can video chat be far behind, for an even more personal touch?”
21. HIRE A SMART 27-YEAR-OLD. “A lot of young people don’t want to go into stores because they don’t want to put up with an attitude,” Decker says. “They’re also tired of being pre-judged if they have piercings and tattoos and wear different clothes than we do. So what do you do? Hire a 27-year-old who dresses like them, who is really smart and who will know more than anyone else in the store knows within a year.”
22. TARGET YOUR ADVERTISING. Target colleges and MTV, Decker says. Why? The 20-somethings who “think you’re snooty” watch MTV. Not only that, 10 percent of college students get married every year. If you’re in a college town, that can mean thousands of prospective bridal customers.
23. FORGET THE WEATHER. “Opening lines should be unique, sincere or different enough to cause a conversation,” says Harry Friedman. “Don’t be surprised if a customer says they’re just looking when you ask them, “How’s the weather outside?” Sit down and write out at least 100 of your own opening lines and then practice them, Friedman says. “They have to be written by you because you may not be comfortable saying what someone else would.”
24. CREATE A FANTASY. Research demonstrates that consumers — especially those ages 18 to 35 — have a high regard for the products celebrities are seen wearing, says Michael O’Connor, founder of marketing firm Style & Substance. When Angelina Jolie wore a pair of Lorraine Schwartz emerald earrings to the Academy Awards, similar styles quickly became part of many jewelers’ inventories. Then there was the pink diamond craze spurred by J.Lo; and if you think you’ve seen an increase in using colored stones as centers for engagement rings since Kate Middleton got Princess Di’s sapphire, you’re not alone.
25. MAKE YOUR WINDOWS PULL THEIR WEIGHT. Digital technology can replace lifeless storefront windows with interactive screens that change with the weather or time of day and are capable of playing games, generating recommendations, taking orders or designing products when the store is closed, according to the Harvard Business Review.
26. WEDDING RING PLAYGROUND. During a remodeling project last year, John Carter, new CEO of Jack Lewis Jewelers in Bloomington, IL, installed a “wedding-ring playground” — a custom-made bar-height table to display bridal sample lines from vendors. It allows engagement-ring shoppers to try out many different styles in a relaxed setting. “It’s helping start the conversation with the client,” Carter says. “It’s become a way to break the ice, hear about their likes and preferences, and then we can delve into all the options.” Carter has started the process to trademark the term and registered the domain name, www.weddingringplayground. com.
27. LET YOUR WALLS SELL YOUR STUFF. High-definition video walls at the redesigned Lagos flagship store in Philadelphia appeal to the YouTube generation and serve as silent ads at night, after the store closes. When it’s open, “a lot of customers will sit there and look up at the video wall and get a feel for the newest collection,” says Chris Cullen, CEO of Lagos. They also can watch company founder Steven Lagos sketching a jewelry design on the video.
28. GIVE ’EM A SCRIPT. If spontaneity just isn’t working for you, consider that Canadian retailer Spence Diamonds gives its sales staff a 70-page script they are expected to follow. Why? CEO Sean Jones discovered that his “diamond consultants” were six times more likely to be effective if they followed “the Spence way,” step by tiny step, from the moment a customer walked into the store to the moment he or she signed on the dotted line. The process is designed to find out exactly what customers want and to help them feel confident acting on it. (From Uncommon Service: How to Win By Putting Customers at the Core of Your Business, by Frances Frei and Anne Morriss).
29. THE FIFTH C IS FOR CHARACTER. Retailers who expand their idea of what bridal can be, by focusing on what is simply “cool” looking jewelry, can cultivate a whole new market, says designer Todd Reed, who incorporates rough and opaque diamonds in his designs. “They are actually willing to pay a little more for something unique,” Reed says. “Be interested in the diamond’s provenance. Don’t emphasize the four Cs, but rather the fifth C — the character aspect of it, and that’s pretty priceless in a lot of ways. Consider the esoteric sense of “value” rather than the monetary sense of the word. A lot of it has to be about the things that they see in it. They really just want a diamond that is different from everybody else’s diamond.”
30. GO THE EXTRA MILE — RUN, IF YOU HAVE TO. Customer service touches like delivery and gift wrapping are important. Online jewelry store owner Cindy Brown, quoted in an Inc.com article last year, says a client from Australia asked her if a gift box came with the purchase. Brown said, yes, then ran out to buy them. The thrilled customer bought more than 500 pieces from her.