retail

I’m a bit of a history buff. I particularly enjoy stories about people who took chances and accepted new ideas, approaches, or technologies despite social pressure to stick with the status quo. Why? Because progress depends on groups of this type or person–risk-takers and visionaries—to propel the rest of us into the future. But just as there must be early adopters to champion new ideas, there always seem to be people who avoid mastering the new ideas for as long as possible.

Don’t Be Left Behind

The internet as a sales and marketing medium has reached critical mass. Consumers across all age groups look to the internet for brand, quality, customer satisfaction, and product information, using every type of device from desktop computers to phones to tablets. Yet I am still frequently asked, “Is it really important for me to have a website?”

And then there’s the question of social media. Only last month I had dinner with a group of jewelry industry leaders where I heard one executive rather forcefully express his opinion that he did not see the value of social media to business, nor did he believe that computers had a significant role to play beyond increasing efficiency and data management.

If you want to increase the value of your business, you must embrace and master internet technology as an important part of your marketing, selling, customer communications, customer service, and brand management strategy.

The Next Wave of Cottage Industry

The publishing and video industries have much to teach small business. Both industries were transformed by big-box retailers—small retailers simply could not compete on inventory or on price. And now, as the behemoths of books and video crumble under their own scale, high-service, high-quality bookstores and video stores are returning to serve discriminating consumers.

But they are not returning in the same configuration as before. New stores offer more knowledgeable customer service, special order services, engaging social media experiences, rich websites to offer a breadth of inventory they cannot afford to carry in the stores, mobile apps to engage with consumers wherever they are, and in-store online technology to supplement the store experience. The stores are staffed with collectors and impassioned readers and film viewers who bring true expertise to their customers.

These changes have created opportunity for independent producers and publishers, who both sell to these more creative independent retailers and sell directly to consumers. Using the same tools, independent producers can now service more dealers and reach more consumers than ever before and sustain those relationships without creating expensive corporate infrastructure to do so.

You Can MustDo This

It’s no longer enough to just have a website. You must have a website that looks and feels current, and offers more than just a few pretty pictures.

About 10 years ago during the first big go-round of website building, many companies got stung by creating websites that were expensive to build—and even more expensive to maintain. Today you have better options. Both technology and the people providing and servicing it have evolved. Here are some tips to help you fully embrace internet marketing technology and all its benefits:

• Unless you can program using HTML, HTML5, CSS or PHP yourself, do not let someone create a static website for you that requires programming language to add content, images, or pages. Today you have an abundance of options for building a CMS (content management system) site, from richly designed Wordpress environments to Joomla, Drupal, Radiant, Silver Stripe, and CMS Made Simple.
• Have a professional website designer design and produce your website using a mainstream CMS tool. Then have her train you how to use the back-end for your day-to-day operations. After that, you need to use your website professional only for more complicated tasks, such as adding new functionality or changing your design on an as-needed basis.
• Yes, you need a Facebook page. If you’re not sure how to set it up yourself, this is a great task for a social-media-savvy college intern. Just getting a page up and running, adding pictures regularly, and beginning to have conversations with your customers is an excellent start.
• If you want to add more exciting options to your Facebook presence, such as integration with your website, catalog pages you can sell from, newsletter signups, promotions, forms, surveys, and campaigns, you may need to hire a professional. But you can add these features to your Facebook page as your customer list builds, so you can be sure to reap the benefits—and have the development pay for itself—as quickly as possible.
• Using a tablet computer, such as an iPad2 or a Droid device, is a fantastic way to show your work without carrying your entire line. But…you need a full catalog of quality images for this to work. You can download images directly to your device or create an online image catalog to which you can easily connect.
• Unless you are a retail store—or are doing a high volume of online sales—you probably don’t need a mobile app right now. But custom mobile apps will be considered as commonly required as websites in a few short years. Right now, spend your time using other companies’ mobile apps and getting comfortable with how the world of mobile marketing works. When the time comes to do it yourself, you’ll know what to expect.

The internet has moved off the dirt roads of its infancy and is now offering a smooth interstate experience at high speeds. If you’re still driving a horse-drawn hay cart and trying to keep up, you’ll not only be left far behind, but also be engulfed in your own dust.

As the jewelry industry heads into its biggest American show of the year, designers are questioning the best way to price their lines. What follows is a reflection on some important considerations when establishing a pricing strategy for a designer jewelry label.

Designer and brand jewelry lines must be very careful to avoid commoditization. Whereas non-differentiated manufacturing concerns price based on the current precious metal market, to do so as a brand or designer will reduce the design aspect of the jewelry to the equivalent of ‘labor’, which can only precipitate a race to the bottom. This is tantamount to saying that two paintings that required 22 hours, oil paints, and 17 brushes to produce hold the same value, though one was painted by Gustav Klimt and the other by a technically competent reproducer of others’ original works.

Designer and brand jewelry executives must consider a number of concerns – some of them conflicting – when establishing pricing strategy. This topic can hardly be covered in the space of a blog, but I will address the high points in the hopes of launching a meaningful discussion within the jewelry design community.

On Avoiding Commoditization

The only defense against price competition is differentiation. Though it is difficult to differentiate on design – and I strongly encourage designers to include elements of differentiation in addition to design – differentiate you must. Let Cindy Edelstein’s be the voice in your head on this point: Cindy preaches that all the designers in an aisle at a tradeshow should be able to commingle their jewelry in the aisle, and she should be able to tell from design characteristics alone to which designer each item belongs. Without a distinctive voice the buyer will ultimately force you to differentiate on price because you will have given them nothing else to work with.

At the risk of seeming like I am downplaying the difficulty of finding good retail accounts, remember that you don’t need all the customers, you need the right customers. A retailer who only focuses on the price of your product based on the metal and gemstone content is not an ideal target. If he can’t see the design value for himself, what is the likelihood he has trained store staff to see and sell design to jewelry consumers? But once you are pulled into the retailer’s non-design-focused pricing strategy, it is nearly impossible to charge the right price when you encounter the right sort of retailer. You will do better working your tail off to find designer-focused retailers than to try to convince generic jewelry retailers to pay the right price. Sound difficult? It most certainly is. But that is the challenge of going into a designer business. If you had decided to be a high-volume producing manufacturing business, your big need would be the capital to invest in the production techniques and technologies necessary to produce in volume. The challenge for a designer business is the creative strategy, brand identity, intensive marketing research and analysis, promotion, and sales activities necessary to find the right customers.

On Variable Costs

You must know your variable costs to protect your margins. Variable costs include the raw materials and labor to produce each piece. Obviously, the first time you produce an item will take longer than subsequent production efforts, so you want base the labor on standard production. Estimating variable costs is, well, a big no-no. If your estimates are off and you negotiate a large order at the wrong price, you may run completely out of cash before you discover your error. Know your exact variable costs.

Metals are the big worry right now. Should you price gold at a $1300 market or $1500? Everyone has heard a horror story of $2000 or worse. Here are a few thoughts to consider when deciding what market to base your pricing strategy on:

• Investment demand for gold continues to hold at fairly high levels, bolstered by concerns about inflation and investor worries about the European economy. On 5/17/10 Kitco projected that gold could go up to $1700 this year, and most forecasts are eyeing the $1350 - $1500 range.
• Johnson Matthey is projecting platinum prices in the $1600 - $2000 range for the balance of the year.
• Silver has been experiencing market resistance in the $19 range, but if it manages to break through that resistance it could track up sharply and take many people by surprise.
• You must be aware of how other designers are pricing their lines. If you are at an $1800 gold market and everyone else is at $1300, you’ll likely be priced out of the market. Watch Cindy Edelstein’s blog this week for her report regarding current designer market bets.

Some will argue that it is better to be safe than sorry, and will price their lines at a specific market and tell retailers that orders will ship at the actual metal market the day of shipment. This may be fine for commodity-level manufacturers and distributors, but I advise against it for designers. As I said before, once you train the retailer to think about your line as a commodity + labor offering, you have thrown your design value out the window. I recommend a harder – but ultimately more sustainable – road for brands and designer lines.

Pricing for Margin and Value

So what’s a non-financial-analyst designer to do? Start by considering what price your target consumer is willing to pay for your line, and what margin your target (i.e., ideal) retailer wants to get. This involves market research. Trade shows are a terrible place to do consumer market research, because you can’t assume your competitors have done their consumer research. Pay attention to what your competitors are doing, but don’t fool yourself into thinking this is a replacement for consumer awareness. Listen to actual consumers, study what they are buying, find comparable items to your designer line, and learn what consumers are willing to support with their debit cards. This is where the real value of social media exists by the way. At any given moment hundreds of thousands of conversations are taking place, and many of those people are talking about what they buy, how much they spent, and where they bought it. These conversations are yours for the eavesdropping. Learn to listen in and you’ll begin to understand what consumers really think.

Once you have a sense of what consumers are willing to pay for jewelry like yours, subtract the target margin of the retailer. Now cost your line at a $1350, $1500, and $1700 gold market. Answer the following questions:

1. Can you meet your financial obligations and generate organic cash flow to cover your growth requirements at each of those margins?
2. If the answer to #1 is ‘no’, do you have outside financing available (already committed) to you?
3. If the answer to #2 is ‘no’, how will you fund the metal purchases, labor, and operational costs necessary to keep filling orders?

To generate organic cash flow, you must have margin. If you give up significant margin, you must generate so much additional volume that you can produce the number of dollars necessary to fund growth. If you can’t support the demand operationally once you get those additional orders – or if the number of dollars you need remains persistently out of reach - you’re out of business. Landing a few choice accounts won’t keep you in business. The key to remaining in business is producing more dollars. So giving up margin to snag a few choice accounts is rarely the road to success.

Look, if you’re going to put yourself out of business anyway, it’s probably worth your time and effort to get on the phone and call every retailer in the country yourself, just to find the 15 or 20 retailers who get it about designer jewelry and understand that it is not a commodity. There are more than 20,000 retail doors in this country, and most of them (sadly) are treating jewelry as a commodity these days. But not all.

Enlightened retailers exist. There are (dare I say it) more than 15 or 20 of them. There are at least several hundred retailers who understand that the key to turning consumers on about jewelry is being turned on about jewelry themselves, and training their sales and purchasing staff to be turned on about jewelry. They are using this advantage (yes, differentiation) to put their retail competition out of business, and because they understand love-of-margin, they are charging the right prices and doing the hard work necessary to find the right customers and encourage those customers to pay those prices.

Does this mean that when you find those retailers you will automatically solve your price problems? No, it doesn’t. You still must have tremendous control over your production, you need to know – not estimate – your variable costs, and you need to do everything in your control to keep your costs down so you can enjoy healthy margins after some reasonable negotiation with your retail partners.

You already know being in business for yourself is hard work. But working this hard for no money? That’s just not worth it. So don’t take your need for margin off the table. Differentiate. Do your variable cost homework. Do your consumer research. Price according to consumer demand and make sure you turn a profit. Strategize, brand, market, promote. Find the right retail partners. Sell your intrinsic value and differentiation (not your materials + labor!).

Make some money. You’re worth it.

(c) 2010. Andrea M. Hill

Thoughts on avoiding knock-off designer jewelry for custom jewelers

The subject of whose idea was it anyway is a sore one in the world of jewelry design. Designers throw their life savings and energy into creating a jewelry line, and worry (with good reason) about being knocked off. When they try to get a design patent, it’s nearly impossible. Why? Because it’s difficult to prove an original concept in a medium that has been well-documented for thousands of years. So how do we address the issue of knock-off designer jewelry?

Here’s the advice I give my design clients: Do what you do better than anyone else. Refine your designer aesthetic so it is clearly your own. Design cohesive collections that will work well at retail. Establish yourself as a quality, reliable manufacturer and service organization. And keep innovating – within your specific and identifiable design aesthetic – to ensure a steady supply of new, exciting products. Sure, someone will likely copy you at some point, but your strong business model will protect you against one – or even a dozen – individual knockoffs of your line.

Enter the Custom Jeweler

For the most part designers have come to accept this reality, even if it bites from time to time. They realize the one sure way to stay ahead of competitors is to keep innovating and improving. But there’s another area of possible infringement that is grayer than being knocked off by another jewelry designer, and that’s the design role of custom jewelers, particularly custom jewelers carrying designer lines.

I am often asked by sales staff and managers at retail stores producing custom work to tell them how to handle consumers asking for designer knock-offs. From a designer perspective, it’s a simple answer (absolutely not!). From the retailer’s perspective the problem is more complex; it involves everything from dealing with a tricky customer issue to being able to recognize the request for what it is.

The problem presents itself like this. A customer looks (often extensively) at the designer jewelry in the showcase (or online, or at another showroom). Next, the customer asks to speak with someone about creating a custom design. And she says something like:

“I’d like a ring. I want it to be made of yellow gold, but a really bright, rich yellow gold. And can you give the surface a really textured finish, like maybe with a lot of fine hatchy lines in it, but still shiny? Also, I like those rough looking diamonds, in gray or black. And maybe a lot of the little square gray diamonds set in a channel around the band. And when you set the big diamond, I don’t want those prongy things. I want the metal that comes up all around the main diamond like a tiny wall, matching the shape of the diamond.”

Oh, you want a Todd Reed ring?

The customer is often a lot less subtle. “I have an antique locket. Can you clean it up and put it on a chain like those lockets from Just Jules, and maybe add a few gemstones to the chain like she does?”

When the request is a blatant attempt to knock-off a designer at a lower price, a jeweler with integrity always says no. A good jeweler usually knows – or can find out – what their client has been looking at prior to the request – their jewelry inspiration. If it’s clear that the customer wants a custom-made designer knock-off, the response must be clear. “That look is the result of a designer pouring his heart and probably all his finances into creating it. My store will always honor that and will never copy it.”

Sometimes the request is less cut-and-dried. For instance, maybe someone absolutely loves the hammered look on the Pamela Froman jewelry, but doesn’t like the scale or design style. On the one hand, Pamela’s finish is a deeper, somewhat chiseled finish – in my opinion more distinctive than most hammered metal finishes. On the other hand, history is filled with examples of hammered metal finishes. As long as the jeweler seeks to create something entirely different, with the only similarity being a hammered finish, this can be an ethical choice. I view this as an example of a customer using a designer’s technique to express an element that they appreciate but for which they do not have the words (i.e., “hammered finish”).

I Made That Years Ago

If there’s one thing I hear over and over in retail stores – and which I admit sets my teeth on edge – it’s a custom jeweler looking at a piece of a designer’s collection and saying, “well that’s not original. I made something like that 10 (15, 25, 30) years ago!” (if you’ve said this, don’t cringe too much – I’ve heard it from at least several dozen custom jewelers by now). Well, that may be so, but one item with a similar element or look is hardly an example of preceding a designer’s entire design aesthetic. Most people who have made jewelry for any period of time will eventually create a version of just about everything.

So what’s the difference between a having on occasion designed with byzantine elements (mixed precious metals, mixed colored gemstones, scrollwork, granulation, talismans) and, say, Chanel’s 2010 Paris-Byzance collection? Well mainly, it’s the word collection. The Paris-Byzance collection is the result of a very intentional act of using Byzantine elements to create a cohesive and entirely self-contained grouping of jewelry (and apparel in this example). So to knock-off a piece of jewelry from that collection isn’t simply to draw a similar page from history. When a designer creates a cohesive collection using historical elements, they augment history.

What’s a Custom Jeweler to Do?

One of the most important things we can do is create a strong sense in our communities of being trustworthy. Even if the occasional customer doesn’t appreciate being told no (and will invariably find a less ethical jeweler who will accommodate them), word will get around that your jewelry store is the one that can be trusted. That’s worth more than any one commission. But that just addresses the risk of saying no.

What about the more challenging problem of recognizing when you’re being asked to create a knockoff? It’s impossible to know all the designer jewelry lines on the market. But it’s also essential for anyone in the jewelry industry to be particularly curious about and interested in the work that is being created, so one of the best tools in your toolbox is to be informed. Even if you don’t carry designer goods (though why wouldn’t you?) shop the designer areas of jewelry trade shows, look at designer news in jewelry trade magazines, watch particularly savvy designer retailers like Gump’s, Ylang 23 and I Gorman, and study your craft. And at the very least, it’s easy to ask a customer where they got their idea from.

Learn to distinguish (and make sure your staff knows how to distinguish) the difference between a request for a knock-off and a request for an element using a designer’s work as an example. You’ve chosen to be in the jewelry business, so let’s all be serious about jewelry. If you can’t immediately think of other examples of a particular technique or design element, do some research. If something is truly unique, be prepared to say you won’t copy it, and suggest to the customer that they invest in the real deal.

Most of the custom jewelers I know take immense pride in creating custom jewelry that fits within the design aesthetic and standards of their own shop, and wouldn’t be at all satisfied with simply knocking of someone else’s work.  And perhaps this overview of how to think about the designer/knockoff issue will prove to be useful as you continue to refine and promote your very own designs and brand.

I just returned from a trade show in New York, and I have to say, neither exhibitors nor retailers were maximizing the incredible value that trade events have to offer. The entire affair (a colocated retail show and supplier show) was just lackluster.

But it didn’t have to be.

My first observation was that a lot of trade show basics were missing. Exhibitors that didn’t consider their presence as a marketing tool. Booths that were completely lacking in compelling signage or any sort of draw to attract attendees to them from across the room. Salespeople unprepared with an offer other than, “what are you looking for? Let me show you my new collection.” And a lot of just failure to follow the basic rules of exhibiting at trade shows, which I’ve already addressed in these articles:

• 10 Rules for Successful Trade Shows
• Improve Your RTS (Return on Trade Show)

B2B buyers of all ages want experiences, and exhibitors who make an effort to turn their booth into something more compelling than the flyer-distributors on the strip in Las Vegas benefit the most from shows. If you sell tools, equipment, or technology, your products are exciting and can do the work of creating experiences for you if you treat exhibits as an opportunity to demonstrate rather than discuss. If you sell finished goods, turning your booth into the equivalent of an all-day-long HSN or QVC pitch experience, with clear offers and product sharing, will bring attendees to your booth. Show shoppers can find it intimidating to walk up to a booth and engage the seller, and they feel a level of obligation when they do. But it’s easy to walk up to a booth when a pitch is in motion … the psychological distance is comfortable, because the show “shopper” can tell that the pitch isn’t for them … it’s for everyone.

I could go on and on about how to improve trade show presence for exhibitors. But for the moment, I’ll just invite you to our next webinar, “B2B Marketing Playbook: Your No-Nonsense Guide to Winning Without Wasting.” Catch it live (Wednesday, March 27 at 12:00 PM Central) or watch the replay here for free. Free B2B Marketing Webinar

But what about retailers? I also notice that retailers are increasingly treating trade shows as buying shows, prioritizing time with existing suppliers to discuss things like buying more inventory and stock balancing. But buying and stock balancing are supposed to be the daily, ongoing work of being a merchant. Buying and stock balancing can be done over email, the phone, or a Zoom call, and should be looked at weekly.

On the other hand, there are a lot of things to be done at trade shows that cannot be done over the phone or in Zoom meetings or using email. So what are these things?

Before a retailer gets to the trade show, they should take time to review their merchandising strategy. Analyze their numbers to see what's selling and what's not, analyze competitors and customer feedback to understand what they’re not offering that they could be. Thinking about how they can differentiate their business from their competitors. If every retailer is selling the same or incredibly similar product mixes, then the only thing they end up competing on is price, and that’s a dead-end game, particularly in the luxury verticals I work in most frequently. Retailers often think they're competing on service, but good service is a minimum standard necessary to compete. Assuming that their service is good, what  are they competing on? Are they offering products that nobody else offers? Are they offering experiences that nobody else offers? How do they differentiate? These are the things retail buyers should be thinking about before they ever get to a trade show, because supplier partners should be an important part of that equation. Thinking about this ahead of time allows trade show shoppers to focus on those questions when they are at the show.

On the show floor, it's time to explore and say, “I have these needs. Maybe it’s a bulleted list of five things the buyer would like to accomplish that differentiate their business from both the individual product and overall product experience standpoints. This approach compels a buyer to explore a trade show in a different way, not for specific products they like, or which are similar to things they already carry, but for product experiences help them create better, differentiated experiences for their customers. Retailers will look at the show floor differently if they approach trade shows that way.

The other thing retailers should do at trade shows is learn about what's going on in the industry. The smartest merchants are asking everyone — whether exhibitors or retail peers or consultants — asking everyone, “What's going on? What's going on in your market? What's going on with your customers? What do you see that you think is unusual? What do you see that's concerning?” A trade show gathers an entire community of experts in one place, and the smartest retailers mine that environment for insight.

Another thing retailers should do at trade shows is ask a lot of why. Figure out who the producers are that do a good job of offering something new and different, who really listen to end consumers. Even if those products are not something retailers think would work in their store or market, they should pay attention, and take the opportunity to ask, “Why? Why did you decide to offer this at this time? Why are you the only ones offering this? What are you thinking about this product or this product category? What are you seeing that made you think this product or product category was needed?”

Perhaps the supplier won’t have a good answer because either the salesperson doesn't know or the company is just making things that are interesting to them. But some of them will offer useful insight about why a particular product is being offered, and retailers can learn from that. So asking why about new products is important.

Trade shows provide the opportunity for meaningful comparisons between brands, and retailers should use that concentrated supplier environment to gather information for comparative analysis.

This is the opportunity to ask suppliers about their trade policies, service approach, terms, and stock balancing. Do they support advertising? Do they participate in events? The answers to these questions enable retailers to ask themselves, “Are there opportunities to do a better job than the suppliers I'm working with right now? Am I already engaged in the best possible relationships?” The best possible relationship isn't as simple as the best price or the best stock balancing plan. The best possible relationship is the relationship that gives a retailer the greatest return on investment for their merchandising purchases, along with the most frictionless buying experience, because the cost of doing business varies from supplier to supplier. Trade shows are a great time to explore those things.

The last thing to think about for retailers shopping trade shows to consider, particularly for my readers in the jewelry industry, relates to the number of suppliers you work with. Abe Sherman, CEO and Founder of Buyers Intelligence Group (BIG), a jewelry industry supply chain analytics service, reports the average jewelry retailer has 200 suppliers. Now, they may not deal consistently with all 200 of them, but 200 suppliers is a lot of suppliers.

The number of suppliers a retailer buys from plays a direct role in overall merchandising effectiveness. More suppliers increases the cost of merchandising and decreases the ability to be important to suppliers. Trade shows are an opportunity to review the supplier mix, have conversations with existing suppliers about how they can work together to improve merchandising strategies, or identify opportunities to work with different suppliers that might check more of the boxes of what is important to the retailer.

If a retailer has three or four bread and butter suppliers that provide them with generic merchandising or generic products, and then has a dozen or so suppliers that provide them with differentiated goods not carried by their competitors, that's an interesting mix. If instead they have a dozen or so suppliers that are providing them with generic merchandise, and very few suppliers that provide them with differentiation, that’s not helping their business.

Approaching trade shows strategically can assist retailers in reducing their overall cost of merchandising and, ideally, increasing their value to some of those suppliers.

Using trade shows to improve differentiation, merchandise balance, cost of merchandising, and reshape and manage supplier relationships for the best possible merchandising strategy is a valuable way to spend time at trade shows. Save things like stock balancing and filling holes in inventory for the day-to-day work of merchandising. Trade shows are not about the day-to-day work of merchandising. Trade shows are about the once or twice per year work of strategy.

“Being able to do something online that you can’t do in any other way is important . . . That’s because the web is a pain to use today! We’ve all experienced the modem hangups and the browsers crash — there are all sorts of inconveniences: websites are slow, modem speeds are slow. So if you’re going to get people to use a website in today’s environment, you have to offer them overwhelming compensation for this primitive infant technology. And I would claim that that compensation must be so strong that it’s basically the same as saying, you can only do things online today that simply can’t be done any other way.”  Jeff Bezos

Website Innovation Goes Beyond the Technology

This quote is from an interview Jeff Bezos did in 1998. I remember reading it at the time and trying to wrap my mind around how I could take advantage of the internet in the business I was then running. It seemed clear to me in 1998 that even though we could use the internet to take orders and ship goods (the business was a jewelry industry distributor), using the internet as a simple replacement for phone or fax orders was not going to take sufficient advantage of the emerging technology. Back then, we didn’t even have the computer systems necessary to facilitate significant use of the internet. We didn’t have fast bandwidth to the building. We didn’t have employees who could type fast enough (or in some cases spell well enough) to manage online orders in the absolutely superb way they handled phone orders. We needed all the building blocks and had to build them fast.

So much has changed since then. Today, 70% of internet use takes place on a pocket-sized device with 4G or 5G. Still . . . if you take away the modems and terribly slow internet speeds of 1998, what Jeff Bezos said back then is still highly relevant: Every website must present a compelling reason to use it.  And yet, most businesses in 2021 are still not providing a meaningful, differentiated, online experience. That’s what website innovation is all about.

In 1964, communications theorist Marshall McLuhan said, “The medium is the message.” Back then, he was focused on the communication medium of television, and how television was changing not only the way households received information, but the culture itself. But he could have easily been speaking about every communication revolution since then: cable tv, digital distribution of music, video games, then online games, social media, the internet. Each new form of communication brought with it new opportunities for communication, new ways of achieving objectives, and new cultural implications.

Business websites are also a communication medium, capable of changing the way customers interact with, experience, and feel about a business. But instead of using all that potential, most business owners have attended to only the most superficial aspects of offering a website.

• The standard page format of websites has barely changed since 1999: Home, About, Services, Contact, Shop. . . maybe News.
• Many retail websites feature pictures and in-store videos to show the website visitor what it would look like if they paid a physical visit. Some go so far as to spend tens of thousands of dollars producing virtual tours, à la real estate agent home videos.
• Product selection on retail websites is often limited to images and iframes provided by suppliers, or which come as part of an industry platform environment.
• B2B websites are even further behind, failing to put full product offerings online or offer the specific services (and price levels) their customers expect to access when meeting up at a trade show or picking up the phone.

Website visitors do not expect the website to replicate your store, are not motivated by seeing all the same products on your website that they find on every other website, and they certainly do not want to purchase your building. Much of what businesses are doing with their websites is missing the point — and the potential — entirely.

That's because most of the work of creating an effective business website isn’t about building the website at all. Effective websites are borne out of the work that comes before they are built.

The Pandemic Effect

Business as we know it has changed forever. Online shopping and buying trends that were happening prior to the pandemic have been dramatically accelerated – economists and social scientists have estimated that we experienced five years of technological evolution in the eight-month period of March - October of 2020. When physical restrictions are lifted, we will not go back to the old ways of working, shopping, buying, interacting with brands, collaborating with known suppliers, or finding new suppliers.

In many ways, this is excellent news. By 2019, most businesses had become mired in price competition. Too much corporate energy was being focused on driving prices down to satisfy price sensitive B2B and B2C customers. But chasing prices is a zero-sum game, forcing companies to offshore work, lay off employees, pile more work on the employees they have left, and ultimately, reduce quality.

Price sensitivity is not going away, but there is another truth here to which most business owners pay insufficient attention: You don’t need all the customers. You just need the right customers. Your value offering can be . . . must be . . . about more than price. Click to Tweet And your website, which will remain a central part of your communications strategy from this point forward, must communicate your value offering in more than just words. Your website must communicate your value offering through experience and benefits.

The Cost of Pricing

Ah, now you're thinking, "But price does matter! People bring up pricing all the time!" Sure they do. So let's break that down. When does price matter most? Two scenarios come to mind:

• Price matters when selling to highly price-sensitive consumers.
• Price matters when there is no other point of differentiation between products.

If you are a grocer in a food desert, God bless you and this article probably is not for you. For everyone else, if you are feeling the squeeze of price competition, it is probably because you have not done the work to differentiate your business from your competitors. Sure, there will always be customers (or potential customers) who complain your price is too high. But if you peer beneath the surface, you will quickly realize that those customers are not your ideal customers. Unless you are interested in competing solely on the basis of price, and are prepared to do all the operational improvements necessary to still make a profit while selling at the lowest price, you shouldn't be competing on price at all.

Doing the Work of Website Innovation

You can't produce a website that delivers an ideal experience to your target customer if you haven't defined your strategy. You must be able to articulate who you are, what you do that makes you different, and why you matter to your target customer. It is a big topic, but for a quick overview of what’s involved, here is a 17-minute podcast and transcript.

How you apply your business strategy to website innovation should ultimately be as unique as your strategy itself. Let’s look at a few examples to illustrate the potential.

An Online Retailer’s Website Innovation

This example involves a jewelry designer who sells to both boutiques (B2B) and consumers (B2C). Her product is fine jewelry, so it's expensive. She produces two collections for boutique distribution, for which she stocks small inventories and has the capability to produce reorders quickly. For consumer direct sales she only offers one-of-a-kind and custom. A big part of her brand value is her aesthetic – people come to her for her design. But her customers return because of her commitment to developing and nurturing relationships, and because she has an uncanny ability to help her customers articulate their ideas and desires and then realize those ideas in physical jewelry form. Finally, this designer has the exquisite ability to help a customer give herself permission to spend money on herself.

A Shopify style, put-a-product-in-the-cart-and-ship-it website will never be able to deliver on this value proposition.

To start, her website needed both a consumer front end and a gated B2B back end.

One-of-a-kind products that are ready to ship can be ordered as is or can be adjusted according to the client’s wishes. From within those product listings, it is easy to book a quick video chat or send an email or text message.

The collections available only through boutiques are also available for browsing, with easy links and directions to the retailers that carry them. She uses these pages to explain why she makes some products available only through retailers, and why she thinks it is important to protect and buffer her retail partners. This transparency builds trust and respect for her business principles.

All her product pages are peppered with links to articles with images and commentary about what she is creating and why. This invites her website visitors into her design process in a way that is unique to an online experience. When a customer visits the physical shop, she can experience the design process in a way that is intimately about herself. Visitors to the website can experience the design process in a way that is more intimately about the designer. Both are excellent experiences, and each is designed to work most effectively relative to the benefits and drawbacks of its respective channel.

The site pays extensive attention to the experience of creating custom design, with obvious and easy options to launch or schedule a phone or video call throughout the site. She toyed initially with trying to figure out how to create a ring builder, a website convention showing all the possible components and iterations of a design. But she ultimately decided against it, because dragging a graphic around to make a new graphic could not possibly replicate the rich experience of letting a talented designer guide one through the creative process.

Her B2B clients can log in to a secure back end, where they can see their negotiated prices and order products. They can place a purchase order or credit card order immediately, or schedule or launch a video or phone call to speak with the designer. B2B clients can also see past orders, track order progress, and see shipping details.

This website does not require expensive software or management. The technology is fairly basic. Superficially it may even seem like a lot of other websites. But by approaching her website through the lens of her strategy and value offering, this designer went beyond setting up a website and deep into website innovation.

Website Innovation for B2B

Let’s look at the website of a company that distributes instrument and music supplies to music stores and schools. They manufacture some of their supplies at their northern European production facility and distribute thousands of supplies from other manufacturers. Not only are they faced with a shrinking market, but their suppliers can also take advantage of the same internet technology to cut them out as the middleman.

To shake themselves out of survival mode and actually start growing again, they did a strategic overhaul in the years before Covid-19 came calling. During that process, they recommitted to the idea that their deep knowledge in all things music supplies was just as important as the products they sold. They decided to stop worrying about how much cheaper their clients could find things on Amazon, eBay, CDiscount, and Otto, and instead focus on how much their customers trusted them to not only sell the best products, but to help them select the right products.

They knew all their products had to be available for shopping and comparison, and that their business systems had to be upgraded to support that. Their systems overhaul made it possible to manage all their products in only one system and make those products sellable both through their traditional office support and on the website without any extra administration. The systems update also made it possible to show each customer their negotiated prices automatically and made it easy for customers to check on order history and statuses.

Implementing an Inventory Control System

But the big work of website innovation involved answering these questions:

• What are the things we already do really well – the things that gained us trust and respect from our customers?
• When we update our website, how might a website underperform on those important things due to the insufficiencies of a website compared to a phone call or a meeting?
• What can our website do to mitigate those shortcomings and offer something new and better, ideally in ways that a phone call or meeting could not do?

The answers to these questions clarified that their website needed to provide all the information, training, recommendations, and knowledge that their customer service team had been providing all along. The solution was to create a wiki-like information architecture using tagging and categories to make it easy and intuitive for customers to learn about any product, find other products like it, compare products, and do deep-dives into product features, functions, and benefits.

Because so many of their clients are music teachers, they had always offered proforma quotes and provided an extensive form library to assist teachers with budget requests. They turned these forms into an on-demand, easy-to-use, interactive, system. They are currently in the process of refining that system so they can more closely collaborate with individual schools relative to budgets for music supplies.

The website also makes it easy to jump on a phone or video consult, which blurs the line between online and in-real-life interactions, builds trust, and increases close rates. For this company, website innovation was about making sure the online experience was the best possible experience of their company by mitigating the downsides of the channel and playing up its potential.

What Will Your Website Innovation Involve?

You, too, can use your website as a strategic extension of your brand value. Customers are not looking for thousands of products on one site, without curation or context. Sure, they want to be able to buy things, but it is easier than ever to find things and buy them. In fact, consumers are currently overwhelmed by choice, much of it meaningless. 

No, if you want to stand out online, you must identify your target audience and do the brand-relevant things that matter to them (or that will appeal to the right subset of new visitors). The technology is available, and it is affordable. What is generally missing is thoughtful analysis, planning, and imagination. Once you do that work, new answers will occur to you that simply had not occurred before.

So stop. Before you jump into Wix (or Weebly, or Square, or Shopify) and start dragging and dropping your way to a same-as-everyone-else website, do the work. The thinking work of website innovation.

If you want to stand out online, you must identify your target audience and do the brand-relevant things that matter to them. Anything less is just a waste of website space. Click to Tweet

I’m not a consumer jewelry blogger, but this is something I wish every consumer jewelry buyer would know. It’s about how (great it is) to buy designer jewelry.

When you buy designer jewelry, your jewelry has a back story

Nearly every piece of jewelry I own came from a designer. As I write this blog, I am wearing raw diamond floret earrings and a raw diamond tennis bracelet from Todd Reed, a ring from Bree Richey on my left hand, a ring from Elizabeth Garvin and another from Jennifer Dawes on my right hand. I have lovely little button earrings from Robin and Remy Rotenier. I nearly always wear a bracelet from Walt Adler and another from a craftsman in Mexico whose name I have long forgotten but whose face I will always remember. My favorite brooch is a mokume-gane gem from Jim Binnion and Steve Midgett (yep! both of them).  Someday I will own a heart pendant from Rhyme & Reason. Something from Mark Schneider’s color collection. A mother's cuff from Erica Courtney. A Padparadscha anything from Omi Prive. Anything from Suzy Landa (preferably green or purple), hoop earrings from Pamela Froman, something nouveau vintage from Just Jules, Diana Widman’s Night Sky pendant, and a piece from ZAIKEN’s Throwing Stones collection.  (I have not received compensation from any of these designers for mention in this blog).

What don’t I own? A single white diamond ring. No diamond studs. I don’t own any Cartier or Tiffanys. I don't buy jewelry for the sparkle, the status, the vault value, or even the fashion. I love the sculptural quality of jewelry, the gemstones (all of them), the art. In this way, I am representative of the type of women who buy designer jewelry – or women who would buy designer jewelry if they knew what was available to them. There are many of us.

'Art' and 'Decorations' are Different Buying Experiences

Buying designer jewelry is not, should not be, like buying generic jewelry. What is generic jewelry? Any piece of fine jewelry that was designed for mass appeal. Does saying it’s generic mean it’s not beautiful? Not at all. I can see the beauty in a perfectly manicured lawn, even if it is similar to the other perfectly manicured lawns down the same stretch of manicured road. I just don’t want that for my own yard. My yard was designed, layer upon delicious layer, to make a statement (entirely different blog here – but you get my point). Does this make me a better customer or a more desirable customer for jewelry? Not at all. But it does make me - and women like me - a different kind of customer, and one that is not currently very well served.

Buying designer jewelry is about buying art you get to wear. What do you do when you buy art? You look for something that speaks to you. You look for something that pulls a feeling out of you that you weren’t feeling before you looked at it. You look for art that you know you’ll be happy to sit and stare at for hours and years on end. You don’t buy art to match the paint and furniture in the room – for the right piece of art you design the room around it. Good art grows old with you.

Great art doesn’t have to be expensive. Would I be giddy with excitement to own an original Rothco? Absolutely. But there is a painting in my living room painted by an artist named James R Gros. He is not famous and the painting cost me less than $200. But it’s one of the most expressive pieces I own. I never get tired of studying it, and everyone who visits our home at some point wants to talk about it.

Too many people do not know the joy of seeking and acquiring art – which is not a money thing, it’s an awareness thing. You can teach a child to buy meaningful art on her allowance.

So when I look for jewelry, I want it to have artistic merit. I want it to have been conceived of and created as part of a thought process about beauty, and craftsmanship, and precious materials. I want to know that whenever I wear it, I will see it, and when I see it, it will mean something to me.

That’s the first thing I wish every consumer knew about designer jewelry. That it’s buying art. When you take a person by the hand and show them the sheer delight and wonder of buying art, the experience can be transformative. I want consumers to have that experience with designer jewelry.

There's Another Opportunity Beyond Custom

 The other thing I wish consumers knew about buying designer jewelry is the difference between buying custom/bespoke and buying a designer commission. If a consumer has an idea for a piece of jewelry he wants to make, and he primarily needs a pair of hands to help him execute it; or if he wants a design that is very traditional but using some of his own elements, that’s what I refer to as custom or bespoke. There's no criticism in this – it's an essential service and can be a terrific experience. But that’s not the same as buying designer commissioned jewelry.

Just as you wouldn’t go to Klimt, hand him a photograph, and tell him to paint your portrait precisely as seen in the photo, I personally wouldn’t go to a jewelry designer and tell him what to make. A big part of the value of buying jewelry from a designer is the designer’s point of view. It's not that the customer has no input. Most designers who will do individual pieces have a discussion or series of discussions with the client first. They talk about gemstones, which ones the client likes most, and why. They ask about how the client wears jewelry, why they wear it, and how it makes them feel. As a client myself, I have loved those conversations. But once you find a jewelry designer who clearly has beautiful images in his head and the ability to turn those ideas into real objects, much of the joy in wearing the finished piece is turning the designer loose and seeing how that designer transforms your conversations about intangible things into a physical work of art.

Of course, not everyone who calls himself a designer is actually a designer. There is ample room for argument here, but generally someone who is truly a designer will have a clear point of view, a body of work that expresses that point of view, and a recognizable evolution in their thought process over time.

I have this imaginary scene in my head where a consumer walks into ABC Jewelry Store with her grandmother’s rings and says, “I’d like to turn these diamonds and rubies into something I can wear and love.” And the jeweler, who is very talented at the bench, asks “Do you know what you want?” The consumer says, “No, I really don’t, but I appreciate beauty, and I want something that is a bit unusual but which will keep me visually engaged for the next 30 years.”

And the jeweler thinks, “I’m really good at making jewelry – the best – but I don’t have an artistic point of view and what I make is pretty traditional looking. Since this consumer doesn’t want to direct this effort and she wants something different, perhaps I’ll teach her how to buy art!” Then he says to his new customer, “Let’s have some fun. I’m going to introduce you to some different types of designer jewelry – designers who will also do commission work. We’re going to see what you like and learn a bit together. Then, let’s pick someone for you to work with, and let them create a piece of art just for you, something that you will always treasure and be proud of.”

Shoot, I get goosebumps just thinking about it.

Is this experience for everyone? Of course not. But for some, the right guidance from the beginning would turn buying designer jewelry into an obsession for them, something to look forward to once a year, or once every few years.

So these are the things I wish consumers knew. I wish more people were able to have the ultimate experience of buying designer jewelry. Because my new ring designed by Jennifer Dawes just arrived today. I’m utterly conscious that I'm wearing it. It brought tears to my eyes when I opened it. And I know that if more consumers felt like I do right now after acquiring a new piece of jewelry, they’d want fine jewelry more often.

When Will We Start Treating Lab-Grown Diamonds Like a Product Instead of Like an Intruder?

The jewelry industry continues to take polarized positions on lab-grown. It seems like every time we've grown past this debate, another social media group comes to virtual blows over the topic. I'm not surprised - it was the same conversation when Chatham first started offering lab-grown emeralds and rubies. But it's not useful. Not to us, not to our customers.

You don't see grocery stories saying, "we won't carry organic/gluten-free/paleo/pick-a-theme" groceries because they interfere with our other grocery sales. They evaluate consumer interest and potential demand, and offer choices. Fashion has done this with alternative fabrics. Car companies had a harder time doing it with alternative fuels, but that's largely because of the expense of tooling up to produce new equipment coupled with wanting government assistance to do so.

When it comes to lab-grown diamonds, we get all tied up in our shoestrings with our own preferences, fears, and perceptions, and in the process lose sight of the customers.

In the most recent social media post and following thread, I saw all the same black-or-white arguments. Diamond mining concerns are doing great! So much change! Mined diamonds are terrible, so much abuse. Lab-grown diamonds are not ecologically friendly - so much electricity! Lab-grown diamond producers are abusive, they're all in (pick a country). None of these tropes serve the industry, our businesses, or our customers. But if we're going to have honest conversations and learn from each other, we need to get comfortable with shades of gray - because that's all there are right now.

Shades of Gray Shadow Both Mined and Lab-Grown
The social and ecological issues are very challenging to sort. Tens of millions of artisanal miners around the world rely on mining to feed their families. Anything we do in the mining sector must be done not only with regard for their health and safety while mining — but also with regard to their health if they cannot mine. In that regard, the pandemic is causing horrific food insecurity around the world.

Want to help support artisanal miners suffering from food security caused by the pandemic?

On the other hand, diamonds do not "do good" yet. Not by a long shot. They are "doing better," and better is a good direction to go in. So we must keep applying pressure on the mined diamond front.

But let's never demean progress. The natural diamond sector was pretty bad for a long time, they've made progress, and if we treat progress as an all-or-nothing proposition, it tends to stop. We don't want that.

So, are lab-grown diamonds a more or less ethical solution? Like natural diamonds, it all depends. If you're talking about factories abusing their labor, then no. But just because a factory is in China doesn't mean it's abusive. I spend a lot of time in manufacturing facilities around the world, and I've seen rotten treatment of employees everywhere — including in the United States — and excellent treatment of employees everywhere — including in China.

Are lab-grown diamonds more or less ecologically sound? Again, it depends. I know of growers working to use the most responsible power generation possible, and some that don't care about that at all. Until lab-grown producers start disclosing some of those details, it's just impossible to know.

But, if you have a customer who has a really hard time with the concept of digging and blowing holes in the earth, then lab-grown may be the flavor of "responsible" she's looking for. I don't agree with making green statements that can't be validated, but I'm uncomfortable with blanket statements that lab-grown producers are all disruptable too.

Which Holds Its Value Better (Hint: It's a Red Herring)

Do lab-grown diamonds hold their value for the future? That's a laugh — a discussion we shouldn't even be having. Not because lab-grown will or won't hold their value for the future — nobody knows that yet! It's a laugh, because mined diamonds don't hold their value. We should never treat diamonds of any sort as if they are a financial instrument. A very small number of collectors in the ultra-rare mined color diamond sector do use diamonds as a financial investment, but that's it. We should never make any promises or inferences to customers about the future value of a diamond.

Should you Sell Lab-Grown Diamonds?

So - should you or should you not sell lab-grown? Well, you could base that on your own preferences, fears, and biases, but I'll suggest that's a terrible business approach. You should make every business decision based on your businesses core values (which are different than biases), and on the desires and interests of your customers. It won't be the same answer for everyone, nor should it be. If analyze this question with intellectual rigor, self-awareness, and deep interest in your customers, you'll have the right answer - and nobody else can tell you otherwise.

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We like to think of ourselves as rational beings, but when it comes to buying, we're just not (oh - and wait until I address reason versus emotions in business decision-making, though that's another article entirely).

Consumers - female and male - buy based on emotion. No matter how many statistics and facts they line up on the way to making a buying decision, that data collection effort tends to  be done in the service of making the decision they want to make. 

But you already know that trust and connection are essential to closing sales. Now make sure that you are also speaking to emotions from the beginning of the process - including the merchandise you choose to offer and the messages you convey to browsers and shoppers - long before the customer lands in the store or the products land in the cart. Be sure you are selling to feelings.

In this month's article for InStore Magazine, I wrote about how the anxiety and disruption of 2020 will influence the shopping emotions of 2021. Read the article to see how the themes of comfort, tradition, and responsibility are the themes to merchandise and market to in the year to come.