Several recent studies are practically shouting at the jewelry industry to reevaluate our behavior and prepare for the future. We've relied on Baby Boomers to buy our luxury goods for so long, we've practically forgotten that they would eventually age out of the major acquisition stage of their lives (which, admittedly in the case of the Baby Boomers, was enormous and economy-building).
What are the Studies and What are they Saying?
The first study, by McKinsey & Company (A Multifaceted Future: The Jewelry Industry in 2020), essentially predicted that the jewelry industry would continue to consolidate and would start to mirror the changes in the apparel industry, which means more intense brand focus and a blurring of fine and fashion. Stores with a single strong brand identity and focus will be the clear winners. This points to younger buyers, who are more into the experience of a specific brand than the experience of encountering many high-end brands in one location. The department store jewelry experience will wane and the Todd Reed Studio store in Boulder, the Alexis Bittar Studio stores in New York, Los Angeles, San Francisco and Chicago, or the Greenlake Jewelry Works experience in Seattle will rise.
The second study, by Unity Marketing and summarized in this article on Rapaport's Diamonds.net, says that we are at at tipping point in branding and marketing. The study asserts that older consumers - long depended upon for their brand-buying habits - have reduced their spending, and that luxury marketers need to adjust their marketing, branding, and channel behaviors to appeal to the younger buyers taking their place.
So what does this mean? Several things.
1. Respect the new consumer. Some things never change. Just as the parents of Baby Boomers were mystified by their children and found them to be disrespectful, responsibility-averse, and entitled, the Baby Boomers are laying the same labels on the next generations. If you're stuck in this rut, dig on out, because the labels are more a product of Baby Boomer age than of younger generation reality.
2. Learn about the new consumer.
- Millenials are more informed than any prior consumer generation, which means they have done their research before they come to the sale, and they know a lot - perhaps more than most sales people - when they arrive.
- They care less about social conventions than any prior generation - which means that they don't buy for status. If they want something, it's to satisfy themselves only, which means everything they buy is far more personal. "But wait!" you say. "They run everything by their friends first. Isn't that status seeking?" Actually, it's not. It's collaboration. This is the most collaborative generation we've ever met, and their opinions matter to one another. They share, borrow, rent, and trade as a way to spread the enjoyment and the wealth.
- They pride themselves on doing more with less. They search for the right deal, the right product, the right timing, the right experience. This is true in their jobs and it's true in their purchasing behavior. This generation has been labeled entitled, but that's not accurate. They just don't settle.
- They value experiences. This is the first generation that will blow an entire paycheck on a meal and then live on Ramen for the rest of the month. It's not about the food, it's about the experience, and they don't want to wait until they are retired to have experiences.
- This generation isn't waiting for luxuries. But their acquisition of luxuries isn't systematic, and it doesn't follow the same life patterns (school, marriage, children, luxury acquisition) as their parents did. If they want something now, they find a way to acquire it now. But see the four points above regarding what motivates them and how they buy it.
- This one should go without saying, but remember that this generation doesn't perceive any difference between internet marketing and billboards - it's all communications to them. The time to perceive a difference between traditional marketing and new/internet marketing is over. Similarly, whether a store is online or brick-and-mortar, it's all shopping to them. Sales and marketing channels are forever changed, and you need to be out in front of that.
I have a few ideas for you, but first, I want you to go back to the previous section of this article, and read each bullet again. After each bullet, ask yourself, "how does my product offering, my brand, my store look to the new consumer in light of this piece of information?" Try to see it through the new consumer's eyes, because that young person is your next patron.
Now let's start with the basics.
Mobile computing. If your store/brand/offering isn't readily available to the new consumer on her mobile device, there's a good chance she won't see you at all. This next generation of shoppers does most of her computing right on her phone or tablet. If your website doesn't automatically reformat itself to be mobile friendly on any device, this new consumer will quickly dismiss you as out-of-touch and a waste of time.
Your Brand Experience. The new consumer mingles entertainment with shopping. Entertainment can be a variety of things, from educational and informative to interactive. Your store, your website, your social media presence, your radio ads, your magazine ads - all of these methods of communication must present a single, clear brand message that engages the new consumer's interest and emotions.
Unfortunately, there is no pat answer to how to do this. In fact, pat is the antithesis of the new consumer. To define your brand experience, you must dig deep into your identity, purpose, and meaning as a brand. Figure out what it is about you that consumers identify with - and what you want them to identify with. You won't appeal to all consumers, and that's the point. You don't need all the consumers - you just need the right consumers. Figure out who they are, and how to communicate with them, and you will discover which brand experience is resonant. This work can only be done by you. It can be guided by someone who knows how to do such work, but you are essential to it - it can't be provided to you.
Your Sales Organization. The new consumer is coming to the sales cycle late. What does this mean? It means that in the past we were able to guide the consumer through the sales cycle but those days are gone.. Before the internet and the uber-informed new consumer, most pre-purchase research was done in the store, aided by a skilled salesperson who was the expert in the product area. Today, consumers conduct significant research online prior to entering a store. They have already availed themselves of product reviews, user comments, technical reviews, design critiques, and alternative purchase options before they approach your sales organization.
At one time, a salesperson asking the question "How may I help you?" was making a an offer of help that was likely needed. Today those words are simply an annoying form of hello. The only way to impress the new consumer with your sales organization is to be even more informed than them - and that requires work, and energy, and curiosity.
Your sales organization must have insight, knowledge, and stories that the consumer can't find anywhere else. The help the new consumer wants is not small talk and it's not a pitch - it's genuine assistance, even when that means getting out of their way. To the extent your sales staff is a contiguous, meaningful, seamless part of the overall brand experience, the new consumer will accept and welcome their assistance.
Retail is Evolving
A new retail experience is coming, one that combines the best of ecommerce with the best of bricks-and-mortar. It's the next logical thing. Ecommerce has taught mighty retailers like Amazon more about their customers than any other retailer has ever known about its customers before, and this information has been used brilliantly to tailor offerings, engage visitors, and close sales. We are rapidly approaching a time when consumers don't know retail without ecommerce as one of the options, and along the way consumer expectations of both are going to both evolve and blend.
If you're not heavily engaged in—invested in—ecommerce, you won't be part of witnessing first-hand what it means to serve customers in that way, and you won't have the necessary insights to take your business to the next level . . . whatever that may be. So be sure to include ecommerce as part of your business model now, doing your best to offer your products and services digitally and learning everything you can.
Keep Your Business Fresh
It's always a brand new world, whether we are talking about generational shifts in consumer behaviors, or technology change, or just next season's colors. The stakes may seem particularly high to you right now, as you take steps to ensure your business is not left behind, but in fact, the stakes have always been high. Static businesses do not thrive, and they never have.
The recent studies about changing consumer behavior are a boon to us, because they force us to stop and think about the business we need to be to stay relevant and profitable. Embrace the change! There's more where that came from.