Is Diamond Brilliance a Marketing Claim or Quantifiable Science?
The luxury jewelry customer is changing -- Winning brands will adapt to their changing demands
No doubt you've seen the latest headlines on Tiffany & Company, like this from the Wall Street Journal, Tiffany Again Cuts Outlook, with its report that profits dropped 30 percent on "weaker demand, weighed down by high precious metal and diamond costs."
In studying the analysts' reports, it looks like Tiffany, which has historically led the luxury jewelry industry, continues to pursue strategies that worked successfully in the past, but may not be appropriate for today's changing and challenging jewelry market. If Tiffany is set in its ways and keeps repeating its 'same-old, same-old' strategies, it gives more adaptable companies an opportunity to capture market share lost by Tiffany.
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Unity Marketing's latest Luxury Tracking Study finds dramatic changes in the luxury jewelry market
In our most recent survey of luxury jewelry customers, we found that the share of luxury consumers who purchased jewelry rose from 13 percent to 15 percent. While this measure of demand still lags the 18 percent tracked in 2010, it points to people's willingness to shop once again for jewelry items.
But what they don't seem willing to do in the current environment is spend more for the jewelry items they buy. The amount spent on jewelry was down both from previous quarter and same period last year. In the current environment, luxury jewelry shoppers are making choices for less expensive, more affordable jewelry items.
In today's jewelry market value is key and even high income consumers who can afford the real thing are opting for less-expensive metal and gemstone options, as well turning to discounters and other value-oriented retailers to make purchases.
The key for jewelry marketers is to create strategies around the new realities of today's jewelry customers - what they want; what they value; what features, benefits, experiences they are willing to pay more to obtain.
Leo Schachter Diamonds is an innovator that discovered a new way to position the diamonds they sell beyond the traditional 4Cs - cut, color, clarity and carat -- that every other marketer uses, but that few customers really understand.
The company introduced a new concept, brilliance, that customers can actually see and experience. Rather than having customers look through a loupe to try to see features that only a trained jeweler can really distinguish, Leo Schachter Diamonds translated the concept of cut into what it means to the customers: how brilliantly the diamond sparkles and shines.
Brilliance makes a diamond brighter to the customer's eye and creates a new and meaningful way to communicate the value and quality of a diamond to the customer. You can read more about Leo Schachter Diamond's luxury marketing strategy in my book, Putting the Luxe Back in Luxury: How new customer values are redefining the way we market luxury.
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Understanding your target customers - and be willing to change direction based upon what you learn - is how to grow your market share in the new luxury market
The way for marketers to grow market share in the current luxury jewelry market is to get down to basics and reexamine the foundation of one's marketing in light of new consumer expectations, like Leo Schachter Diamonds did. They still deliver the 4Cs that diamond customers expect, but they created an additional value that gives customers a new reason to buy a Leo Schachter Diamond over another brand. That is a powerful competitive edge.
Unity Marketing offers marketers a variety of different solutions to gain deep and powerful consumer insights that will translate into winning marketing strategies for the new luxury market.
- Explore the overall jewelry market -- Subscribe to Unity Marketing's Jewelry Report 2011. This syndicated market research study is the place to start. It outlines the size and growth of the overall jewelry market, both fine and costume; what products are hot and what not; demographics and psychographics of the jewelry customer market; where they shop; favorite brands; and key market trends.
- Pin point promising target customer segments, and delve deeply into their needs and desires. For many jewelry brands, the affluent customer segment is the most promising to pursue. They have plenty of money to spend and their sophisticated lifestyle tends to make them appreciative of higher quality jewelry designs.Unity Marketing conducts an in-depth survey of affluent jewelry customers, their buying preferences and spending habits, four times per year. Marketers can keep their fingers on the pulse of their best customers through Unity Marketing's Luxury Tracking Study .