In times like these, the only sure path to sales and profits in the retail jewelry business is Bridal, so I emphatically urge you to focus your efforts on growing that portion of your business. Fortunately, there is a very specific course of action you can take this Fall that will seed your Bridal business for next year. Even better, this course of action is self-funding (in fact, it creates incremental sales and profits, in addition to expanding your customer base), so you’ll actually make money while creating next year’s Bridal customer base.
In order to understand what you need to do, let’s start with an important piece of information that was discovered in DeBeers focus group studies that took place about 6 years ago. DeBeers’ researchers discovered that over 95 percent of American women who receive an engagement ring received a gift of fine jewelry during the prior twelve months.
If you think about the typical American dating ritual, this makes sense. As their relationship evolves, a dating couple’s activities will probably involve dinner, movies, and parties, as they get to know one another, and at some point, he’s going to buy her a piece of jewelry. I think it’s extremely interesting that DeBeers’s studies were able to establish the 12 month time line, as a predictor of the future behavior of getting engaged.
This does not, of course, mean that all women who receive a gift of fine jewelry will ultimately receive a ring. But you can predict with almost complete assurance that today’s recipient of an engagement ring was a recent recipient of a piece of jewelry. In my view, this is an incredibly powerful piece of marketing intelligence, because it provides us with an integral part of an effective strategy for communicating with a couple that’s in an incipient engagement stage of their relationship.
I don’t have data for this, but I’m prepared to speculate that at least half of these pre-engagement ring gifts get purchased in a 14-day window: either during the 10 days prior to Christmas, or the 4 days prior to (and including) Valentine’s Day. To see why this is the case, let’s consider a hypothetical couple who choose to get engaged in July. Let’s rewind the clock, and go back in time to see what he was giving her for Christmas and Valentine’s Day. He was giving her jewelry, wasn’t he? It’s just the way the dating ritual works.
So, while you can spend huge amounts advertising that you sell Bridal 365 days a year (and I am certainly an advocate of doing consistent, top-of-the-mind awareness advertising campaigns aimed at young consumers), you can achieve the same - or perhaps even better - results by advertising 14 days per year that you sell inexpensive gifts. The key is that when she opens that box, revealing his first jewelry gift, it has your company’s name on the inside.
In order to develop a better understanding of the mechanics of this link between the inexpensive purchase and the subsequent engagement ring, I’ve done a series of recent tests to confirm this hypothesis. Consider the experience of an Independent retailer in Oregon in 2009, where we designed a Valentine’s Day promotion that flooded his store with young male shoppers. In just six days, they sold 284 items to young males (the vast majority of whom were new to the store’s database), based on a special offer of flowers, candy, and dinner out, all with a purchase of just $99. We then tracked subsequent purchases of those male shoppers during the subsequent 10 1⁄2 months, and found that they bought 32 engagement rings from the test jeweler.
Armed with this information, we expanded the group to 72 of our customers last year. One retailer sold over 1100 of these packages in just six days, and surging increases in their Bridal sales confirm this very strong link between selling the inexpensive gift, and making the subsequent bridal sale.
The problem for most Independent jewelers is that they’re often not interested in making this inexpensive sale, and they rebel at suggestions that they should advertise inexpensive gifts at key holidays for fear that they’ll turn off their affluent customers. I hear this all the time. Fortunately, we have excellent metrics from extremely upscale stores (notably, Rolex and Hearts on Fire dealers) confirming the fact that the affluent consumers’ perceptions are not adversely impacted by price point advertising aimed at younger consumers.
The challenge, of course, is to determine which products to advertise, and at what price points. I watch the Majors very carefully in this regard, because their continuous memo test programs with their vendors allow them to identify the right items at the right prices. And while it’s true that they won’t share the results of their memo tests with me, they don’t need to. All I have to do is watch what shows up in their flyer programs to understand which sku’s were the winners.
I also rely on a network of friends who supply the Majors, so that I can understand what they’re being asked to produce. For example, last year I got word during the Spring that Helzberg was looking for snowflakes to put in their Christmas flyers. I further recognized that these same suppliers would be telling the Zales, Sterling, and JC Penney buyers (to name just a few) that Helzberg would be featuring snowflakes, so I thought we could probably expect an advertising induced snowflake frenzy in mid-December, at exactly the time that young male consumers would enter the marketplace. Our customers were pre-armed with a key snowflake design as a result, and predictably, they sold thousands, once the Major’s Christmas advertising appeared featuring the snowflake category.
So... using this methodology, it’s clear that you can dramatically increase your Bridal traffic during the ensuing 12 months. I urge you to take advantage of this amazing insight. It can make a huge difference to your business, especially if the economy softens. Reach out and touch these young pre-Bridal consumers, and start a dialogue, so that when they’re ready to buy their engagement ring next year, you’ll be in the game!