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The Luxury Market Is Changing: It’s Not The Millennials, It’s the Opportunities | December 16, 2015 (0 comments)
While every year brings change, this year seems to have brought more than most. At The Centurion, we know the retail landscape continues to evolve. To help you start out 2016 on the best note, we asked a variety of industry experts for their take on dealing with these changes. Each replied from their own viewpoint, offering strategies and insights into the changes the year ahead will bring. Our seventh installment is from Andrea Hill, left. Andrea owns Hill Management Group, LLC, with the brands StrategyWerx, MentorWerx, and SupportWerx; providing strategy consulting, professional development, branding, and marketing services to small and mid-sized businesses. --Caroline Stanley
Campbellsport, WI—When jewelry retail stores were the only place to buy fine jewelry and diamonds, marketing was largely an after-thought. A regular ad in the newspaper (because people still read them), seasonal ads on the radio, and the occasional mail insert or postcard represented a sufficient amount of marketing. Stores in larger markets with more competition had to step up to do occasional television advertising and perhaps a regional magazine. Today, jewelry business owners are faced with an array of marketing options: websites that demand constant change, upgrades, and new content daily; a social media landscape that defies measurement; and confusing strategies like adwords and click-based advertising.
When marketing options expanded to allow even the most local of companies to have global reach, the market changed as a result. This in turn increased the requirement to market well beyond the comfort zone of most small business owners. This change more than any other, including demographics, psychographics, political polarization, or economics, has led to much of the pain jewelry specialty retailers are feeling today.
As consumers, we respond to our options. When shopping involved going in and out of physical structures, it wasn’t necessarily a form of entertainment (except for the true shopaholic). But when large enclosed malls were built, an entire generation of American teenagers responded by turning shopping into an important aspect of social life. Was that generation of teenagers genetically pre-disposed to consumerism-as-entertainment? Not likely. They simply responded to an experience that hadn’t been available to previous generations.
As an industry we’re intensely focused on how Millennials are changing the market. But the change is not coming from them. Millennials are responding to options that are available to them—options that weren’t available to previous generations. Why limit yourself to what can be found locally, when you can sit on the couch in your PJs and surf the ‘Net until you find what you want? Why take precious time to go see something in person, when you know that online sellers make returns very easy and that in many cases online credit card portals like Paypal will protect you from the occasional unscrupulous seller? Just as parents in the 1970s and 1980s couldn’t relate to hanging out constantly at the mall, older generations haven’t embraced the new options as quickly as younger generations.
Just as large enclosed malls sucked the life out of main streets, the internet is sucking the life out of traditional retail. When historians look back at this time, they’ll see it as just another phase in the history of trade. But to those living through it, it’s a game-changer.
Retail needs to change, but adding a wine bar, a kids’ play area, or a wide-screen TV for bored husbands isn’t the answer. Those things may be part of an overall differentiation strategy, but they don’t address the fact that there are people all over the world who are looking for things to buy, and they can’t find you. Or, if they do find you, they’re not impressed. When gift-shopping in December I was able to find handmade specialty gifts for nurses, a hand-made Clydesdale ornament, and a very rare book on philosophy. None of these things would have been available in my small town in east central Wisconsin, and 10 years ago I wouldn’t have even looked for such specific things. Now that I can, I do. I can even ensure that I make purchases from individual crafts-people and small business owners.
Retail strategists believe there will continue to be a role for bricks-and-mortar stores, but the ones that survive will have a very robust online presence, and the online portion of their business will carry a lot of weight. They make every item they sell available online. The sales pages will be filled with excellent descriptive copy (think Spiegel in the early 1980s), strategically planned search words and search terms (think Amazon now), and terrific photography. Smart retailers will offer far more inventory online than they can offer physically in their stores, and they’ll do this by working out drop-ship or fast-ship arrangements with their suppliers and designers. They will offer easy on-line consults—preferably using video—and they will be visible on multiple social media platforms all day every day, bringing more traffic to their websites and physical stores.
Smart retailers will have dynamic websites that showcase new content daily. Websites will tell engaging stories about the store and staff, personalizing the experience for buyers hundreds or even thousands of miles away. The appearance of their websites will evolve gradually and constantly so they will never look dated—because graphic design has seasons much like fashion, and current generations of shoppers know what’s in and what’s out. Website managers will be part of the retail core team, constantly keeping up with how the online market is evolving and acting as trusted internal advisors on this essential part of the business.
Everything I have described here is immediately available and reasonably affordable for small business owners. I say reasonably affordable, because if your marketing budget has been languishing at 3% - 4% of your retail sales, it may be a bit of a shock to ramp up to the kind of constant marketing necessary in today’s retail world. But that’s the way today’s retail game is being played and won. Will it be something new in ten years? We should assume that it will. So the other thing smart retailers will do now is to set themselves up to be closer to the front of the change-train than hiding in the caboose. We don’t know what the next enclosed mall or digital revolution will be, but it’s safe to say there will be something, and the next generation will embrace it.
Missed any previous installments in our series? Click here to read:
- The Luxury Market is Changing: How To Deal With New Financial Realities by Jeff Gordon
- The Luxury Market is Changing: How To Turn Millennials On To Fine Jewelry Beyond Bridal by Edahn Gohan
- How Synthetic Diamonds Will Impact The Future by Abe Sherman
- For Local Jewelers, The Future Is Brighter Than You Think by Doug Gollan
- The Luxury Market is Changing: Social Media, Hiring & Firing by Suzan Flamm, JVC
- The Luxury Market is Changing: Marketing by Ellen Fruchtman, Fruchtman