In case you haven’t noticed, the times they are a-changin’, wreaking havoc on many businesses. In particular, the jewelry industry is being hit especially hard. To help jewelers find ways to adapt to these changes, we met with several of them from across the U.S. recently to discuss strategy.
Building their business around weddings with a particular focus on diamond engagement rings and couples “tying the knot” has always been an effective business strategy for jewelers. Not anymore.
The market has changed—substantially—but sadly, many jewelers have not. At least, not fast enough. During our strategy sessions, we identified four major Millennial trends that, taken together, demand a shift in future growth strategies:
1. Weddings and marriage are not occurring as they did in the past. This is a major blow to those who depend on wedding rings and diamonds for their core business. What are Millennials doing instead of getting married? Living together. Or living with friends in shared space. And why not? In today’s sharing economy, just about anything goes.
2. Retail shopping is changing rapidly. Today’s Millennials are shopping online, and that’s only going to increase. To survive, jewelers must shift their sales methods to capitalize on this trend.
3. Student loan debt is seriously hobbling expenditures on fine jewelry sales. According to the Federal Reserve Bank of New York, outstanding student loans have nearly quadrupled since 2004, to just under $1.2 trillion, which is putting a major crimp in Millennials’ spending.
4. Branded products are growing faster than expected. According to McKinsey & Company, “new money” consumers are copiously and conspicuously wearing branded jewelry instead of heirlooms or estate jewelry.
What can help jewelers open new markets and find better ways to reach today’s buyers? Corporate Anthropology.
To recognize—better yet, capitalize on—new opportunities and untapped markets, jewelers simply need a “little anthropology.” What they “see and feel” through personal observation can help them better “think” about how to solve their customers’ problems.
For the jewelers out there, I have three solutions for you:
1. Listen to what your customers are asking for. Are people even buying diamond rings anymore? If not, what are they buying? Pay attention to the items they are asking for and you might just uncover a huge market waiting for you.
2. Change your target audience. Maybe the starry-eyed young couples shopping for diamond engagement rings are a thing of the past. Time to shift your focus. Is there a market in “friendship” jewelry? Or in going after older consumers whose taste in jewelry is very different from the young’uns?
3. Ask your customers for stories. How old are they? Where/how do they live? What role does jewelry play in their lives? Listening to their stories will yield a much richer kind of insight than just asking them “what they’re looking for.” Stories give you details and context, enabling you to offer people solutions they will actually want to buy.
These are but a few of the many observational methods and tools which corporate anthropologists routinely use to help business leaders identify innovative solutions. I encourage you to give them a try. No telling what great ideas are waiting to be discovered.