In my last article, I reviewed the importance of the in-store experience for diamond jewelry shoppers. Like Apple, specialty jewelry retailers must create a store where customers feel welcome and comfortable while browsing through the store and receiving answers to their pertinent buying questions. However, I think that this endeavor is easy to say and hard to do. Every retailer understands this, but only a few have managed to actually get it right.
This is just one element of a broader marketing strategy. Retailers must provide their customers a compelling reason to stay and shop in their stores, but they must also find ways of attracting them in the first place. Once in the store, retailers need to transform visitors into paying customers and perform all future follow measures for encouraging their return.
There has been much talk recently in the press about the need for improved marketing at all levels of our industry. This discussion has culminated in the creation of the Diamond Producers Association (DPA), whose mandates include, inter alia, “…maintaining and enhancing consumer demand for and confidence in diamonds, including joint-category marketing initiatives.” This is a good place to start and I look forward to seeing the outcome of this initiative.
Nevertheless, it would be a mistake for the industry to blindly rely on organizations like the DPA or the World Diamond Council (WDC) alone to fill the void of good marketing in the diamonds and diamond jewelry. Even with the best of intentions, these organizations can only scratch the surface of what is needed for improving our message to consumers around the world. Marketing must be an industry wide effort to help diamonds maintain their status as the ultimate luxury product.
Diamonds still enjoy a unique status among luxury goods, but the lines are getting blurry. Our industry is forced to compete with other luxury products that make a compelling offer to consumers. We must develop fresh, new and innovative approaches to marketing in order to inspire our consumers and we must be pro-active in order to drive sales, rather than just rely on consumers to remember how special diamonds are.
This is easy to say but often hard to do. I have extensively described the diamond jewelry consumer, examining the differences in how consumers buy diamonds, both locally and internationally. It is important to have industry wide marketing to reiterate diamond value to the consumers and motivate them to locally seek out diamond jewelry. However, local and regional marketing is what will bring customers into your store. Retailers of all sizes must be part of the solution and cannot continue to rely on ‘big brother’ to do their marketing and advertising for them.
What is marketing?
The American Marketing Association defines marketing as the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and society at large. This holistic definition implies that, in our industry, marketing must include more than just one group with its own particular objectives.
I find it important to distinguish between marketing and advertising, as many incorrectly use the terms interchangeably. Advertising is just one element of an overall marketing strategy, the activity of producing advertisements for commercial products or services. Marketing must be based on a more comprehensive system, derived of a focused objective. This objective must recognize and begin with an understanding of your customer, an awareness of your competitors and their strategies, and the trends in your market that effect both.
This should all seem straightforward, and one would expect any business owner or manager to focus on this kind of high-level thinking at all times. However, most of us have had retail experiences that prove that this isn’t always the case.
What to do?
Perhaps the hardest part of good diamond marketing is accepting that what worked yesterday might not work today and will surely look different tomorrow. Constant change is the new norm and retailers in every industry must understand this and adapt quickly. Consumers are busy and they are easily bored. Therefore, it is not enough to simply rely on what worked in the past. They are also better informed than ever before, rendering them much more demanding.
I believe that the first step to effective marketing is understanding of your own unique business. Who are your customers and are they the best kind of customers for your business? Does it make sense to target more of these types of people or should you try to identify and develop a new customer base? Who are your competitors and what are they doing differently? What future actions must be taken in both the short- and long-term in order to address what might not be working and boost what is? Great marketing begins with a great plan.
Retailers should also play a part in inspiring consumer confidence in diamonds. In recent years, consumer confidence has been shaken, perhaps like never before. The issue of conflict diamonds remains firmly entrenched in the public psyche. Labratory-grown goods have developed quickly and a few unscrupulous diamond dealers have mixed natural and lab-grown diamonds without proper disclosure. There have also been some high profile burglaries in recent years, including a brazen attack on a passenger-laden airplane ready to depart from Brussels in 2013.
These issues effect consumers and I hear such stories them regularly in conversations with people from all walks of life. These types of high-level challenges must to be addressed by global stewards, such as the DPA and WDC.
However at a local level, retailers must still do their part to maintain the highest possible standard of ethics. They must make an unwavering commitment not to trade in conflict diamonds or undisclosed lab grown stones and they must ensure that all those in their diamond supply chain comply with the same values. Retailers must be fully transparent in their public communications and customers must make informed buying decisions, knowing that they are getting everything that they were promised when buying diamond jewelry.
Front Line Staff Create Bottom Line Profits
For local retail jewelers, the best possible marketing efforts often start and end with floor staff. Employing and retaining great sales people is perhaps the greatest challenge in any retail point of sale, but the one with the highest rate of return. Informed, courteous and patient associates have the ability to ‘create’ a sale. We have all had experiences with fantastic sales people who make our purchase seem so easy that we smiled as we gave away our money. The ‘sweet spot’ for a retailer is to have everyone in your business representing you in this manner, at all times, working towards the common goal that your planning has established.
I believe that the first step to achieve this is to go beyond the 4Cs. It has become far too easy to rely on the 4Cs as the only metric in diamond evaluation as the 4Cs are only a starting point in the discussion. The 5th C, which stands for Comments, greatly impacts the value of diamonds that might otherwise seem identical based on the 4Cs. Salespeople will ultimately be required to communicate this message to the public.
Staff must also remember that diamonds are most often purchased as an emotional and romantic gift. Women frequently buy diamonds for themselves as a symbol of achievement and status. While the 4Cs help to establish a price range for the purchase, they have little or nothing to do with the initial decision and motivation to purchase. Yet the 4Cs are far too often the main point of discussion. Sales associates should be well informed of all diamond characteristics, as I suggested time and again, but they should also focus their attention on the diamonds’ emotional attributes of beauty and rarity.
Staff must also adapt their message to portray diamonds as a potential wealth preservation purchase, and not as an expensive indulgence as so many consumers are conditioned to believe. Most buyers understand that items like consumer electronics have a limited lifetime and many manufacturers integrate planned obsolescence into their processes. Similarly with fashion or luxury apparel, these items can break down over time or simply go out of fashion. In contrast, the message of diamonds as an eternal source of value seems to be missing at the retail level and I think this could help any retail jewelry store to dramatically increase its customer conversion rate and profits.
Keeping Customers for the Long Haul
As mentioned before, it is much harder to acquire a new customer than it is to sell to someone who has bought from you in the past, provided they were treated well. Good businesses focus their marketing efforts on making a sale, but great businesses understand that real marketing begins once the sale is made.
According to the Harvard Business Review, the biggest complaint that customers have when dealing with any business is poor follow up. Just as a systematic approach is needed to bring people into your store and convert them into customers, retailers must employ a process of reaching out to former customers on an appropriate schedule. Modern communication makes this much easier than it was in the past and there are many software tools available to help manage this complex task.
Make no mistake; marketing is a challenge, and often the biggest challenge in any business. The world of retail is crowded and consumers have more options competing for their resources than ever before. Past marketing campaigns, such as De Beers’ immortal ‘a diamond is forever” slogan helped shape diamonds into the ultimate luxury product that it is today. No longer can the industry point fingers and say that marketing is “not my job.” We all have a vested interest in promoting diamonds at all levels, mine to market, in order to benefit the millions of people around the world who make their living in this industry.
The views expressed here are solely those of the author in his private capacity. No one should act upon any opinion or information in this website without consulting a professional qualified adviser.
Diamond industrialist Ehud Arye Laniado is a man passionate about diamonds. From his early 20s in Africa and later in Belgium honing his expertise in forecasting the value of polished diamonds by examining rough diamonds by hand, till today four decades later, as chairman of his international diamond businesses spanning mining, exploration, rough and polished diamond valuation, trading, manufacturing, retail and consultancy services, Laniado has mastered both the miniscule details of evaluating and pricing individual rough diamonds and the entire structure of the diamond industry. Today, his global operations are at the forefront of the industry, recognised in diamond capitals from Mumbai to Tel Aviv and Hong Kong to New York.