I field calls and have coffee with many retailers every week who pose this question or multiple variations of it constantly – so what is the answer?
Well evidently there is no single answer but I’ll give you my take on it, using some examples that come to mind.
On one occasion the question of how tough business is came from an “upstairs” retailer who has a strong web presence. He was complaining how other similar web retailers and brick and mortar stores were cutting their margins so dramatically that there was nothing left.
I have to say that I almost wanted to laugh – if he were not so serious!
Doesn’t this story sound familiar; however the shoe is firmly on the other foot.
The upstairs web retailer was created and the “bricks and mortar” retailers were screaming blue murder, to the point that they didn’t even want to allow those retailers to be members of the JAA. Well, these retailers are now part of the jewellery landscape like any other and are facing the same uphill battles.
Another example is the bricks and mortar retailer who found business slowing down and decided to move to a new location, make his store “up market” to compete with the big guys.
Hmmm, if only it was that easy; last I heard the store was closing.
Did you find a niche in the market? Were you one of the first diamond dealers on the web? You were doing something different! Maybe better than the next guy. Well done! But remember, you cannot be so inwardly focussed that you fail to recognise the principles of why you achieved success in the first place!
In marketing we analyse the product life cycle, and, like a bell curve there are peaks and troughs. We constantly look for ever changing conditions.
I know that in every issue of every jewellery magazine you hear the same thing, almost like a “pneumatic drill” in your head.
What’s your unique selling proposition (USP)? How can you be different? I know your first response is “damn, I sell diamond rings; how different can I be?!”
We all have a different story to tell. You might be a bench jeweller – OK, let’s call you an “Artisan”. Your family may have been in the trade for a combined 100 years – that’s already a “tradition”. Everyone has something they can highlight. What’s yours?
However, if all you have to compete with is price, you will have no business in the long term. There will always be someone looking to undercut you; their expenses maybe less, they are happy to work on a ridiculously low margin. We see more from the manufacturing retail jeweller who will sell the diamond at a minimal margin but make a healthy profit on the ring.
Let’s be realistic, if you sell a diamond based solely on the paper, being “GIA” you are saying – loud and clear – that to you, it’s just a commodity. Therefore, what value do you add to the equation?
So, why is business this hard? It’s because to be successful in business we have to constantly reinvent ourselves and that takes time and effort. Your success depends on offering your clients a point of difference.
It’s not that it’s hard, it’s just not static. My kids love to say to me “you snooze, you lose!”