Jewerly Spakles this Holiday Season

The economic recession devastated the American luxury market, that’s no surprise. What is a surprise is the increased demand this season for perhaps the most quintessential luxury item: jewelry.

Some encouraging stats:

-The percentage of people who bought jewelry during “Black Friday Weekend”, Nov. 26-28, increased from 11.7 percent to 14.3 percent. That is close to a three percent increase.

-In a recent study from the National Retail Federation, the percentage of people saying they will be giving jewelry as gifts has increased from 18.4 percent to 20.3 percent.

-According to “Cotton Lifestyle Monitor” jewelry is ranked at number five as planned holiday gifts in 2010. Jewelry didn’t rank at all in 2009.

The jewelry industry may not draw out the 2 a.m. crowd on Black Friday, but the increase in jewelry sales this past weekend was felt immediately by both retailers and designers. It also helped spark optimism for the economy and retail sales in general.

“While Black Friday weekend is not always an indicator of holiday season performance, retailers should be encouraged that a focus on value and discretionary gifts has shoppers in the spirit to spend,” said Matthew Shay, National Retail Federation, president and CEO.

Looking at the bigger picture, the fact that people are looking at jewelry a lot more this holiday season could mean that American’s are ready to start spending on luxury items in general again. It might be possible that this is the first sign of the recession being a part of the past.

Stich up the wounds left by surgical shoppers

It’s no surprise that the economy has changed how people spend their money. Everyone has been pinching pennies and in turn became smarter shoppers. People have been working overtime and getting second jobs. Who has time to browse shops? Who is going to fall for the impulse buy when money was strategically placed elsewhere? The Great Recession may officially be over, but the changes that people made to their spending habits may in fact be here to stay.

The new type of shopping is referred to as “surgical shopping” because the time spent shopping in stores and online has dropped drastically. No one is taking the time to wander stores and browse through websites to stockpile on clothing, necessities, etc. Instead, people know what they want and aren’t sticking around after buying it. Shoppers today visit an average of three stores during a trip to the mall, according to ShopperTrak, a Chicago research firm that tracks sales and customer counts at more than 70,000 stores. That compares with an average of five stores in 2006. There is even evidence accounting for stores being messier due to people dumping most items right before the check out.

How are companies and brands adjusting to surgical shopping? Often, through the strategic use of social sites like Groupon.com. The site has attracted more than 25 million subscribers to “group” together to get the lowest price on an item. Subscribers are pitched local discount offers on restaurants, retailers, etc and if enough people take advantage of it, it takes effect. The Gap's recent Groupon offer of $25 off a $50 purchase was a blockbuster Gap’ sold 441,000 offers as part of a one-day only promotion in August, for a total of $11 million.

With this new type of shopper mentality, what’s the best way to get them in AND to leave with your product? To help capture their attention, this might be the time to step up your “social media” strategy beyond the typical Facebook and Twitter. Along with Groupon, foursquare is another great tool to utilize. Promotions through foursquare are coming up everywhere (more on foursquare). I myself came across a promotion while shopping in NYC. Walking into an H&M, there was sign on the door that said “Check-In here and receive a special discount!” With incentives like that, who wouldn’t check in? Companies like Wholefoods, Saks 5th Avenue and Starbucks have all partnered with foursquare as well.

The continued practice of surgical shopping is creating a new reality for brands. And websites like Groupon.com and foursquare are helping them embrace consumers’ new way of shopping.

Another Ode to Customer Service

Last week was my parents’ 50th wedding anniversary. Neither mom nor dad is a fan for big parties, so my sister and I opted, instead, to give them a big gift and a small family dinner at a favorite restaurant to celebrate.

Being very particular, mom and dad have their limited list of fav restaurants. Our first choice was a seafood spot they adore. Mid-market in price, the Maine Fish Market isn't (as my dad would say) "fancy", but the seafood is among the best in Connecticut. The caveat? They don't take reservations. Being in PR and having been a business editor for more than a decade, I scoffed: for a 50th anniversary dinner in honor of loyal customers, AND a party of 10 (including my almost 103-year-old aunt), they would surely make an exception and not make us sit in the bar for 2 hours on a Friday night! So, I called. My answer: "sorry, no reservations." I explained again. The response: "Nope."

My head ready to explode, I tried mom and dad's other favorite: a fabulous Italian spot in Hartford's South End: the First and Last, an independent that has been around since the 1930s. Like the Maine Fish Market, First and Last doesn't ordinarily take reservations. However, I told their lovely employee, Emma, the situation and, voila, we had a table reserved during their busy 7 p.m. Friday-night rush. Further, First and Last has an affiliate Italian bakery, so they prepared a made-to-order cake (dubbed by my 15-year-old, food-connoisseur nephew as “Perhaps the best cake I’ve ever eaten”) at the end of the meal.

I’m not going to tell you what the bill came to, but suffice it to say: significant. The Maine Fish Market? Well, they lost that business. However, much more important than that one big dinner (because, I’m certain, the Maine Fish Market didn’t notice our absence)… is, as always, word of mouth and personal reputation. I wouldn’t just not recommend the Maine Fish Market to anyone looking for a restaurant in the Hartford, Conn., area, I would actively DISCOURAGE it. As for First and Last, well, I (and the rest of my family) are huge fans (PS: if you are in Connecticut, go... and order the Cioppino. Amazing!). I expect not only future dinners, but probably a whole lot of bakery orders, as well.

The moral? QUALITY is not enough. Especially for independent businesses (and especially in this economy): service and flexibility are key. Those are the things that keep customers coming back. An establishment like the Maine Fish Market (est. 1986) might be enjoying 2-hour waiting lists on Friday and Saturday nights now, but when they disregard customer loyalty in favor of rigid rules? Well, let’s just say I wouldn’t expect them to EVER be celebrating a 70th anniversary like the First and Last did last year.

Rules are important, but when it comes to your best customers, service is more important. If you are a travel company with a set itinerary and price, think hard before refusing to re-price without airfare for someone who regularly travels with you. A jewelry firm that doesn’t like to change a gemstone in a design? Reconsider before refusing that service to your best customer. A PR firm that has a set retainer, but is approached by an up-and-comer with fabulous potential? Be careful before you turn them away. Remember: there are a million other businesses out there who will happily take your customers by bending rigid rules to accommodate and honor loyalty. Just ask the Maine Fish Market...

It's the Little Things That Count

I'm a stickler for customer service. I've written here, and in numerous editorials during my tenure as editor, about how to earn repeat customers. Clearly, making judgements on customers is a bad idea, as I've already posted. But what little things make a one-time shopper a loyal customer? 

Almost everyone can name a favorite place to shop or dine. And, aside from those who are label-obsessed, it usually boils down to the experience. My sister in Connecticut, for example, is loyal to Michaels Jewelers, because the salespeople are friendly, non-assuming and offer little things like jewelry cleaning while she shops--regardless of whether she's spending $50 or $5,000. My best friend, Jenn, a high school teacher in the D.C. area, meanwhile, shops at J. Crew because the mega-brand gives props to hard-working (and underpaid) educators by offering a 15% discount. 

My own personal favorite example: Tim Hortons. For those not in New England, Tim Hortons is, roughly, a regional competitor of Dunkin Donuts. Being a coffee fiend constantly on-the-go, I stop for coffee, on average, once a day. When I moved to Rhode Island last year, I drove right past this unknown Tim Hortons and headed for the DD I knew from New York. Until, that is (I don't remember why, but) I hit the Tim Hortons drive-thru in Westerly about a year ago. As usual, my lab pup, Mia, was in the backseat. We pulled up to the window and along with my coffee (which is also, I should note, cheaper than DD), the employee asked if Mia would like a Timbit (Tim Hortons equivalent of a DD Munchkin). Well, with that, Tim Hortons certainly earned a loyal customer in Mia. Like most with fur-children, I'm a sucker for my pup. So, I was thrilled that this chain-restaurant offered a little something special to my little girl.

As a result, I avoid Dunkin Donuts (even when Mia isn't with me) and seek out Tim Hortons. Now, I'm not a mathematician but, by my rough estimate: in a year, Tim Horton has invested $50 in free "timbits" for Mia. In return? They've made about $600 in profits off my coffee purchases. Dunkin Donuts, meanwhile, with higher coffee prices, has lost roughly $900. 

Interesting food for thought, no? Generally, as this example illustrates, it's a matter of seeing the forest and ignoring the pesky trees. Sometimes merchants think they can't "afford" to "give" things away... even little things, regardless of what they may mean for customers. But, when you break down the numbers, the question really is: can they afford NOT to?