There’s no doubt in my mind the Australian jewellery industry has experienced a seismic shift in the past five years, driven in the main by branded products, but there are two things that have been missed along the way as businesses benefited from rising sales created by the new trend.
Firstly, many retailers rode on the coat tails of the supplier brands, as they reaped the rewards of the branded product evolution. But as leading suppliers spent big promoting their products in order to drive consumers to stores, I fear many retailers have missed an opportunity to create their own brand, or at least strengthen it.
Many retailers think of brand as only a ‘product’, but successful retailers have been a community-based brand for a long time. The fact that jewellers have been known as, for example, the diamond specialist, or the engagement ring or watch specialist, in local areas is akin to branding yourself.
But two things have happened over recent years: many jewellers who were, or are, a brand in their own right took their eye off the ball while reaping the rewards of the charm and bead trend, and those that had no brand recognition missed the opportunity to create it.
Rather than merely just scooping up the easy sales that, effectively, came walking in the door courtesy of the supplier brands, more jewellers should have been taking the opportunity to promote their service business to a captive audience.
Ask yourself; when customers were coming to purchase the latest products they saw in magazine or TV ads, did you think to gain a better understanding of them? Did you think to find out their birthday, wedding anniversary or other jewellery interests?
Forget all that – did you even get their name and address?
You see, most people don’t mind being marketed to after a purchase, provided it’s for something that interests them. They were in your store buying and ready to be sold to again, some time in the future, provided you handled it correctly. But how can you brand your business in a local community if you don’t even know who your community is?
It’s called CRM – customer relationship management – and it’s vital to the service industry. Not only that, it gives you a weapon to fight off the chain stores, whose business is not knowledge or service based but price based.
While many retailers either do not fully comprehend branding, have not fully taken advantage of other people’s branding or have just been plain lazy, many suppliers too have been shaken by the shift.
For some, it’s too late… I am witnessing many Australian suppliers on their last legs as they struggle to find their niche in a changing market. They are often quick to point their finger at others for their declining business.
The restructure of the local jewellery industry began 15 to 20 years ago as Australian manufacturing started to move offshore. That era witnessed the demise of many suppliers who refused to evolve, but now we are seeing the next restructure as those that did survive selling generic (unbranded) product now have to find a point of difference.
To offer another acronym, it’s called USP – unique selling proposition – and if a supplier doesn’t have it now, they will need it to survive. So, the second thing that has gone relatively unnoticed is that many (competing) suppliers, who also rode the coat tails of the brands, will slowly wither away as the industry changes again. The weak get weaker…
But it’s not all bad news! Read our Australian brands feature to see what the smart, savvy operators are doing about their USP.