It's no surprise that the jewelry industry faces a tough road ahead. With JBT continuing to report increases in jewelry business discontinuances it's difficult to predict who will still be in business in the next 12 months, especially when hearing that stores like Dorfman Jewelers suddenly announced their closing. It only takes a few bad months of sales to completely put a business into an unrecoverable tailspin.
Poor marketing is one factor that could lead to a drop in sales. I'm referring to the overall marketing strategy that a store has, which includes the ad creatives, customer targeting, and the advertising medium. Over the years, I've had several jewelers tell me they've given up on advertising, or told me that nothing works in their area. It's thinking like that which will eventually lead to business failure. Even the Small Business Administration of the U.S. says that you should be spending at least 2-3% of your projected gross revenue just to maintain your business. Entrepreneur.com suggests that you should be allocating between 6-12% of your gross. Regardless which number you go by, marketing is key for survival.
I'm bringing this topic up today because I just finished reading a Forester predictions report from October 2015 on winning on the basis of customer experience, in which they explain that many organizations are working on ways to improve how they interact with customers to create a better experience.
Tracking The Customer Journey
When you think about your own customer experience situations, how many times have you been faced with a situation where the right hand doesn't know what the left is doing? Simply put, many organizations do not have efficient customer relationship management software that allows everyone to tap into the most recent customer information easily. Forester's research was intended to reveal that "years of uncoordinated technology purchases" across marketing teams, product lines, customer management, and store operations have created disconnects in customer data, and therefore unhappy customers.
Customers can interact with you in many different ways, but you'll never know how unless you can tie their information together. That information exists in social media accounts, in website browsing history, in ecommerce transactions, and in your in-store transactions. As of right now, for jewelers who are willing to employ the technology, there are ways to connect most of the online customer journey together; but that journey is disconnected from the in-store experience.
Forester suggests, and I agree, that most companies will have to rebuild their entire technology infrastructure in order to connect the customer journey from end to end.
Insurmountable Technology Hurdles
Being able to track a customer journey would have an amazing affect on your business, starting with your marketing. Right now, it's pretty easy for an ecommerce website to make new product suggestions based on previous purchase history. It's even easy for marketers to set up ad criteria to show those suggestions through Facebook ads or Google AdWords Remarketing. These types of ads are highly effective at generating repeat business for websites employing it.
That same remarketing could be applied to in-store purchases if POS software could somehow tie customer purchase history into online marketing, but as of right now that technology bridge doesn't exist. The absence of this technology isn't because the jewelry industry is lagging behind, indeed this is one situation where all industries are lagging.
Very few businesses have figured out how to seamlessly tie in-store customer data back to the digital world. Those who are doing this effectively have reengineered all of their software from scratch. Right now, I can only think of two companies who have figured this out, they are Micro Center and B&H Photo Video. Another benefit of tying their in-store and online experiences together is that both of those businesses offer the ability to purchase online but then pick it up in the store.
As another means and requirement for survival, I expect most retail jewelers to adopt ecommerce over the next few years, but what I don't see is a marriage between the existing in-house POS/CRM software and those ecommerce sites. There are only a few point-of-sale software companies dedicated to the jewelry industry, and unless one of them are reading this right now, and heed my advice, I don't see any of them making a move to reengineer their software in such a way as to support the future needs of this industry. Yet, just like it says in the Forester report, "short of rebuilding their technology stack, companies won't be unifying the end-to-end customer journey anytime soon."
What this means is that there's a real opportunity here for an upstart to swoop in with a new solution that offers a customer relationship management tool, point-of-sale tool, ecommerce platform, online marketing tool, and analytics reporting all in one. This type of system would have to be cloud based or run from a dedicated server on a public IP address within your store.
The Bottom Line
Most of what I've written today isn't immediately actionable, but I want you to consider keeping an open mind about different methods of personalizing your marketing and exploring new options to replace the technology you are using right now in your store.
Another interesting statistic from the Forester report was that 40% of those surveyed felt that the ads they saw didn't deliver anything of interest. In other words, most marketers are sending the same ads to their entire customer list without segmenting or personalizing them based on past purchases or browsing behavior. Segmenting is possible today with almost any POS system you have, although it might take a little bit of elbow grease to get the job done. Online personalization is also easily possible with most website technology, assuming of course that your website and marketing systems play well together.
I recently wrote that the jewelry industry was going through a metamorphosis in how jewelers and designers had to work together. Now I'll add this future shift in technology as another required factor in that metamorphosis.