Saturday, January 19, 2008

Designing in Recession - Part II

(Designing in Recession - Part I)

The customer jewelry buying behavior during recession can be divided in two parts:
  • The initial bang where everyone takes a hit and essential purchase is the only thing that happens
  • And the follow up, when people try to recover and there is hope and struggle, a mood that sets the purchase in every field
Let us begin with the first part of Jewelry Buying behavior during Recession
We are at a point where we know what sells is what is essential... Engagement rings and wedding bands. The next product category that will sell are earrings and pendants. And finally the rest of the categories in this luxury market, bracelets, necklaces, watches and the rest are going to be a much tougher sell than usual.

Competition has never been tougher, so what is it in a product that will sell and what will take a step back?

Let's Talk about the materials:
Your customer for an engagement ring wants to pay less without a compromise in his expression of love because this is the most important piece of jewel that he is about to buy. To deliver to him what he desires, we must have a look at the most important ingredient in making an engagement ring: the material. The rock and the metal that holds this beauty.

The various options that you have, while choosing the metal for an engagement ring is usually gold or platinum. Despite the fluctuating prices of gold, it is still cheaper than Platinum which makes gold the obvious choice for the metal. 18K Gold will however compete with 14K and that is something that a store should look into as the personal choice of their clients.

A bigger diamond is usually considered better and therefore the compromise is made in the rest of the 4C's of a diamond. This is specially true during a recession. Customers will prefer size over color, clarity and cut. Help your clients make a decision by offering them better clarity and a bigger size with compensation in the lesser known Cut and Color. The key is to set the right balance of visual appeal and worth.

Give your customers a break and introduce them to the fascinating world of colored stones. Since an engagement ring is all about the rock, give them an option of other stones such as Topaz, Citrine, Quartz and other stones used for Engagement rings. Give diamond accents around the stone or else in a diamond ring, give accents by use of other color stones. Synthetics and treatments are coming in strong, but make sure your clients are well aware of the drawbacks of these options regarding the return policy and investment.

Lets now talk about the design:

Limit the metal: A Classic design such as a simple diamond held in a prong setting is most likely to sell faster than a more modern tension or even a bezel set diamond ring. The use of metal should be limited to what is required rather than being ornate. Comfort setting may not be a big seller for once. People are looking for what shows without having to pay the price of what does not. So get rid of that excess metal on the bottom of the shank and stay away from tension and flush settings.

Increase the visual size: Add in accents where ever possible to introduce the look of "bold" and splash in some color. Use shapes other than round brilliant for options because some of them look bigger and cost lesser while hiding the flaws better.

Do not miss out on the manufacturing details such as white prongs ALWAYS and back the diamond with white rhodium. Use accents of lower color grade than the main diamond to make it look apparently whiter. Do not allow the prongs to over lap the diamond but make them big enough to compliment the diamond and increase its visual size.

Raise the diamond to give it prominence. Lower the rest of the diamonds to highlight the center stone. The few things that you cannot compromise on are the strength of the prongs and the width of the ring in context with the design.

To make the sale:

If you have a discount to offer, then flaunt it and publicize it.

Know what your competition has to offer because his customer could be yours and vice versa. This is the only time when you will get new customers because customer loyalty will strictly be dictated by price and quality. So make sure that every window in your store and every ad you put across is as inviting as a warm Christmas cake because that is what your customer will look at in times as these.

Your priority at this point is to move your inventory in all segments, so make that your motto. Instead of simply reducing the direct cost of the ring, add in a bonus or discount for the next purchase. Or simply offer another product for the price of the discount you were about to offer.

Subtly remind your client of what they already own and make them feel good about it by offering jewelry cleaning and repair etc.

To reduce inventory costs be more creative with stocking up samples of that which will sell and can be easily modified to more complex designs. By this I mean that for every few similar looking designs, keep 1 ring complete with the setting etc to represent the several blanks ready to set the stone that your customer may choose. Keep the option of introducing other stones ready so as not to at least loose the customer.

Open up your online subscription to buying ready stones without raising the costs and yet maintaining the variety. Keep your catalogs ready and make yourself available on the world wide web. Internet is the most important tool you can put to use to promote yourself.

Brush up your sales staff, because the knowledge of product is the key factor to sales more now than ever before.

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