Paradigm shifts, bubble economies, the next new things: They come fast and furious in the 21st century. In good old-fashioned downturns, they can leave you feeling left out.
Take that ubiquitous piece of paper in the hands of every third diamond customer entering your store. Margins, year-to-year numbers, stock-turns, and foot traffic are down year-to-year, diamonds, metals, and inventory are way up, and across the counter is a 24-year-old fiancé who grew up on-line, wondering why you can’t show him that $5,000 1 carat GVS he’s seen on the Internet.
Relax. Human nature has its own, intractable rules. Even in our global and cyber age, answers to difficult questions still come, often as not, from within, and usually begin with a few good questions—and rules—of your own.
RULE NUMBER 1:
IDENTIFY THE SHOPPER
“When I see that piece of paper, my first question is: Is this my customer, or Wal-Mart’s?” says David Nygaard, the highly proactive Virginia jeweler who recently expanded to a seventh door amid the current downturn. “I am a specialty jeweler, and the numbers show that 50 percent of jewelry purchases are at specialty jewelers, the other half is everything from QVC to the big boxes. Yes, this guy has surfed the Internet, but that doesn’t make him one or the other, or answer my question. I need more information. So I ask a second question—of myself, and perhaps, of the gentleman. When he was Googling, or got to Blue Nile, and came to ‘sort by,’ which button did he hit? Given the blind nature of the purchase—and if anything, I think the Internet’s added blindness to the diamond sale—I’d guess that 99 percent of the time he sorted by price, first.”
And maybe last too? I ask. Net surfing tends to be a passive, more-the-merrier endeavor, rarely leading to analysis or depth, like watching TV with a mouse.
“Very often, that is the case,” says Nygaard. “Which means I can jump through hoops and hurdles, or simply accept that I have a price shopper in my store. This price shopper, however, has a piece of paper in his hands that says $5,000—and I could care less if it’s GVS or CVS—that paper is telling me his budget. Well, as fate would have it, I carry $5,000 diamonds. In fact, our average diamond engagement ring is $6,200, so with mountings, appraisal, etc., he’s in my ballpark.”
But not GVS at $5,000? “And that’s his first question: ‘What about these diamonds? They’re GVS.’”