The jewelry industry can be extremely competitive. In addition to the upfront costs of precious metals and gemstones, retail jewelers must also consider store location, renovations, security requirements, and competition from local, independent, and e-commerce giants. The result is that it can be challenging for small, local jewelers to survive in this highly saturated market.
To stay competitive, jewelers must master many aspects of the business, from sales to inventory management. Having a clear understanding of your core customers can help you refine your product selection and develop marketing campaigns that resonate.
Product Selection
Jewelers must strike a balance between variety and depth when it comes to their inventory. Offering too many options can overwhelm and confuse shoppers, while not having enough variety can limit your customer base. Additionally, jewelers must be sure to maintain stringent quality control processes to protect their brand reputation.
In-store shopping is still popular, and it offers customers a tactile experience and personalized service. Increasingly, however, consumers are turning to online retailers for convenience and price comparisons. This can be a challenge for brick and mortar stores that depend on in-store sales to drive profitability.
Regardless of the shopping channel, knowing your customers can make or break your jewelry retail business. This includes assessing their demographics, psychographics, and purchasing behavior. For example, if your target audience is comprised of environmentally conscious millennials, you might want to stock more sustainable and ethically sourced pieces.
Price Negotiation
Many people who visit jewelry stores expect to be able to negotiate the price of a piece. This is especially true for high-ticket items, such as engagement rings or wedding bands. While this is not always possible, it’s important to have an understanding of how jewelry pricing works.
Jewelry pricing is largely determined by supply and demand, as well as the cost of raw materials. For example, a basic cable chain is inexpensive to buy and easy to sell, so it will be cheaper than more complex designs that require more skill and labor.
Similarly, mass-produced jewelry is typically more affordable than handmade, higher-quality pieces. This is because mass-produced jewelry can be manufactured at scale, using cheaper raw materials and wages. In contrast, a custom-made piece will be more expensive because it requires more skilled labor and a longer production time. For this reason, it’s best to research the prices of comparable pieces before asking a jeweler to discount an item.
