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What’s in Store

Brick-and-mortar stores will be critical to tomorrow’s consumers

By Shawna Kulpa

To paraphrase Mark Twain, the reports of the death of brick-and-mortar retail stores are greatly exaggerated. For a few years now, there has been this belief that all commerce would be moving to the internet, and that the retail store as we know it would soon cease to exist. But trends and consumer surveys have revealed that not to be the case. In fact, retail experts and forecasters are now predicting a resurgence in physical retail stores.

In the results of its Future of Retail 2017 survey, Walker Sands Communications, a public relations and marketing firm in Chicago, found that “physical stores could be making a comeback, especially among younger consumers who crave more authentic and engaging experiences.” The survey revealed that while 54 percent of total consumers polled still prefer to shop in-store, a surprising 58 percent of 18- to 25-year-old consumers showed a clear preference for shopping in physical stores versus online. Among the top reasons for the in-store preference among all consumers were the unique experiences stores offered, such as providing food and beverages, product demonstrations, and entertainment.

This is particularly true for luxury product categories such as jewelry. In its annual global luxury study, management consulting firm Bain & Co. found that while online sales continue to climb (rising 24 percent in 2017), physical stores are expected to account for 75 percent of retail sales by 2025.

Experts believe that e-commerce will continue to be important, but emphasize that it shouldn’t be the sole focus of a company’s efforts. “We’ve seen lots of attention by stores on upgrading their online presence but much of it is at the expense of what happens in the store,” says Leonard A. Schlesinger, Baker Foundation Professor at the Harvard Business School in Boston. “There are lots of things to do online for convenience, but it’s pretty difficult to recreate the romance, joy, and emotional experience of buying jewelry online. The large emotional component of jewelry has justified a large number of physical stores.”

While mobile technology has certainly made it easier for consumers to shop, it hasn’t addressed the need that people have to see, touch, and try out products before they buy. This is where physical stores have the upper hand and why, especially for market segments such as jewelry, they will continue to be key for consumers. 

Change Is in the Air

“When you can buy almost anything from your couch, what is making us go to the store?” asks Cristina Ceresoli, senior vice president for retail strategy at the National Retail Federation in Washington, D.C. “There’s a social element to shopping, which is very satisfying to people.”

“Human beings are social,” confirms Schlesinger. “Give them the opportunity to engage in social activities that are pleasant and fun and timely, and they’re going to take advantage of them.”

Peter Smith, president of VIBHOR in New York City, agrees with this assessment. “There is something still in our desire for community and to be engaged with other human beings,” he says. “The online players understand it clearly, and that’s why we’re seeing them opening physical stores. They’re not doing it as a vanity project—it’s a function of maturation.”

He’s specifically referring to companies such as Amazon, Warby Parker, and Bonobos, which previously existed only online but have started opening up brick-and-mortar retail locations in the last few years.

“Great online retailers have all recognized that it goes way beyond online presence and that they need a physical presence as well,” says Schlesinger.

But even though consumers are still expected to continue shopping in physical stores, especially for a luxury item such as jewelry, it doesn’t mean that change isn’t necessary for future success.

As was found in the Walker Sands retail study, one of the primary reasons consumers continue to shop in store is because of the experience they receive. In order to stay relevant to tomorrow’s shoppers, the in-store experience jewelers are currently offering needs to change.

“Consumers want a better experience,” says Smith. “We know that young people do go into jewelry stores. We can also reasonably glean from data that while the majority have made the decision to go into the store to buy a ring, they’re also looking around at the environment, and they’re not excited by it.

“There needs to be greater emphasis on the experience, and we, as an industry, have done a poor job on that,” he continues. “Some point fingers at the internet, but it has nothing to do with it. We aren’t evolving. We’re continuing to deliver the same experience we were delivering 20 years ago, and then blaming everyone else for the issues instead of asking what we need to do differently.”

Luckily, offering customers a unique shopping experience can start small.

Creating the Right Atmosphere



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“People often misinterpret what an experience is,” says Smith. “Experiences aren’t only about activities. [They’re] also about engaging the senses.”

What can retail jewelers do to better engage the senses of their customers? They can start by examining how their stores look, sound, and smell.

First, consider lighting. Is everything in the store illuminated? Beyond that, is lighting being used to create an interesting effect?

When Smith recently visited the store of a jewelry retail client, he noticed that although the cases had good lighting, the walkways surrounding the cases were also equally illuminated, leaving little visual interest. “Having contrast is so much more interesting,” he says. “We turned off the lights illuminating the floor and saw something that was very different. It didn’t take away from the cases or the ability to engage customers with the product. And turning off the lights actually saves money, so this one change didn’t cost a thing.”

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When it comes to sound, retailers should look at how they’re using music. “It’s so inexpensive now to create a great soundtrack that’s executed in a way that’s approachable, but still allows for conversation,” says Smith.

And don’t forget about smell. “Using scents to create imprints is extremely powerful,” says Tony Bynum, director of client innovation and program strategy for RTC in Chicago, noting that some retailers, such as the trendy apparel brand Hollister, have done an excellent job of developing signature scents that are instantly recognizable to customers. In the case of Hollister, the company uses a light, fresh scent created to bring to mind the Southern California style that serves as inspiration for its clothing.

“There’s been a lot of research done that shows that when smells are detected, it causes more brain synapses to fire simultaneously, resulting in a stronger, harder-wired imprint of the experience,” says Bynum.

Touch is another sense that is important to engage but can be difficult in jewelry stores, as the merchandise is typically small and valuable—a combination that makes security an issue.

“You can’t let customers interact too much with jewelry because it’s easy to slip into pockets,” says Pamela Danziger, owner of Unity Marketing in Lancaster, Pennsylvania. “There’s a barrier there.” Instead, jewelers should focus on other interesting ways to display jewelry that will engage customers beyond having them bend over a glass case.

“Some jewelers have hung jewelry on the walls in picture frames, displaying it at eye level like a piece of art,” says Danziger. “It’s a powerful way to overcome the barrier... It’s a little more interactive and engaging. And it en-hances the customer’s experience with the merchandise.”

She also recommends retailers rethink how they have the jewelry arranged. “Jewelers are thinking in the jeweler mindset,” she says. “They need to look at it from the consumer point of view.” She gives the example of how jewelers often arrange jewelry by gemstone or brand. “Most men don’t know the difference between gemstones. Think about different ways to arrange your product, such as by color.”

Harold Dupuy, FGA, vice president, strategic analysis, of Stuller Inc. in Lafayette, Louisiana, points to Apple as a company that delivers both a high value product as well as a great in-store shopping experience, letting people freely interact with products and focusing on how customers can enjoy themselves rather than be sold to.

“We need to make it more like entertainment as opposed to a serious experience,” he says. He points to the customization trend as helping with this, by having the jeweler work alongside the customer. “Side-by-side selling helps break down barriers between the customer and the salesperson.” The more fun it is, the more memorable the experience—which can increase both repeat sales and word-of-mouth referrals.

As you think about how to best position your inventory, also consider just how many products you have on display and if they’re all necessary.

“This notion of putting out a massive number of SKUs is nonsense,” says Smith. “Any stories that you’re trying to convey to the customer are getting lost in a sea of nothingness. The more you have, the less they see.”

“Shoppers don’t select products, they de-select products,” explains Bynum. “They weed out what they don’t want.” And when shelves are full, “it makes getting to the product they want very difficult. Retailers can simplify the process by breaking things up. It’s about making it easy for consumers to be able to get at the product they’re looking for in an intuitive and simple way.” 

Expanding Experiential Offerings

Once retailers have created a space that offers shoppers an enjoyable and engaging in-store experience, it’s time to look at other activities that could be offered to both increase foot traffic as well as further confirm a store’s brand and mission.

Already we’ve seen jewelry stores introduce wine bars and offer beer on tap, which can be an attractive lure particularly for bridal-jewelry-buying Millennial customers. Another thing that has become popular with retail stores is offering consumers the opportunity to charge their mobile devices. (According to the Walker Sands study, 78 percent of consumers have smartphones, while 31 percent are sporting fitness trackers or smartwatches, all devices that could potentially run out of power during a shopping trip.)

“It’s delivering something that’s relevant to customers,” says Smith. “It’s about finding a way to make deliverables to the end consumer that are consistent with our needs today.”

In addition to these types of ideas, retailers should consider other experiences that can help them stand out from the crowd.

“Book signings, hosting talks about issues that might be of interest to your customers, having jazz trios come in…there are lots of ways to make your store an interesting place to go that has nothing to do with jewelry,” says Smith. “These are things that make stores more accessible.”

And sometimes the experiences can be as simple as using what, and who, a store already has at hand—the jewelry makers and designers whose work it carries.

“Origin stories are another way to help shoppers connect to products,” says Bynum, adding that all of the stories about a piece of jewelry—the decisions that went into a design, the way it was made, and the care and craftsmanship that went into its creation—go into the enjoyment of it. “Bringing those stories to life in a store helps customers relate to the product, creating a curated relationship. It’s what consumers are looking for. We need to figure out ways to bring the storytelling experience to life in our stores.”

He recommends thinking of your store as a monthly magazine. A magazine needs to maintain a consistent message, but every month it features the voices of different contributors. “Think about your store in a similar way,” he says. “How can you give your craftsmen a voice in the store? How can you give them a platform that be-comes a reason why consumers would come to the store?”

Another reason retailers should consider putting on unique events in their stores is because jewelry is a luxury, and a retailer can’t view itself as competing only against the jeweler across town or online; it’s competing against everyone offering experiences and events.

“Don’t just look at other jewelers, look at any competition for consumer’s attention and dollars,” warns Schlesinger. “Jewelry is a discretionary purchase. You’re competing with everyone for the dollar.”

“In the past 30 years, consumer spending on experiences and events relative to total spend has increased by 70 percent,” confirms Ceresoli. “It’s important that retailers consider that they’re competing against someone going to a concert.”

Regardless of the types of events and experiences a retailer decides to offer consumers, the key is staying true to its brand and mission, and delivering an authentic experience that speaks to its community’s wants and needs.

“Jewelry stores are very niche,” Danziger says. “They have a narrow customer base, so you need to craft your experiences based on what’s important to your customers. That’s why we see so many national chains failing—they aren’t customized.”



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Omni-Channel Marketing

Although a majority of consumers prefer to shop for luxury items such as jewelry in physical stores, jewelers still need to invest in their online presence. Retailers will need to embrace the concept of omni-channel marketing, making sure that their online presence matches the experience that their physical stores offer.

“You must have an effective online presence,” says Danziger. “It doesn’t necessarily mean e-commerce, but you have to be able to put forward the right representation online—a lot of local shopping starts there. Consumers can’t appreciate a piece of jewelry in an online setting so a website has to be designed to attract people to come into the store.”

Smith confirms this, noting that one of the first things he does to check out a retailer is to pull up its website on his phone. “If the site isn’t user-friendly on my phone, it doesn’t exist,” he says. “You have to have a great website that starts on the phone and iterates what your story is, what you’re about, and it should be the same thing I experience when I walk into the physical store, drive by your billboard, or look at your Facebook page. Consistency of message is really big and important.”

“The proliferation of channels from retail stores to catalogs to online to mobile has provided customers the opportunity to shop any way they choose at any time and expect to get access to the same inventory and information,” says Schlesinger. “It’s about omni-channel, balancing the presentation to the customer. It’s not mobile that will dominate. [All shopping channels] have their challenges, but the retailer will have to develop mastery in all of them.”

Ceresoli agrees, noting that “commerce is channel agnostic. There’s no online and offline anymore. Customers have expectations, and we need to be ready for that level of openness.”

To read more about how to incorporate omni-channel marketing into your business, see December’s “A Look Ahead.

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