Attracting New Customers
Analyze the market space other retailers own. Then adopt some of their successful qualities to woo new customers
How do you compete against all the retailers who vie with you for customers discretionary income? An article in the Harvard Business Review (Creating New Market Space, January-February 1999) says any retailer can analyze the benefits competitors offer, then add some of that value to his or her own business and products. Heres how.
What Do They Have That I Dont?
Hardware chain Home Depot realized it shouldnt compete just with smaller hardware stores. As the do-it-yourself revolution took off, the company decided to take business also from building/remodeling contractors. Home Depots solution was to combine the same bargain-priced materials it always sold with the know-how of contractors. It began to hire knowledgeable salespeople to instruct customers in the details of home renovation and offered classes through its in-store Home Depot University. This format is so successful Home Depot has grown to 660 stores with $24 billion in sales annually.
Jewelers Application: Analyze why your customers are attracted to other retailers or their products. If its another jeweler, does he or she have more inventory, longer hours, a Web site that allows customers to preview or buy jewelry online? Find out what matters most to customers then work with your suppliers to offer the same thing. For example, many suppliers now offer smaller retailers electronic access to their large inventories.
If you look at other industries that attract potential jewelry dollars, the same analysis applies. What attracts consumers to that retailer or product? Travel, for example, provides a treasured emotional experience. You can offer the same by showing a wonderful travel video on the South Seas to promote South Sea pearls, for example. Or run an emotional video clip from De Beers new three-diamond anniversary ring campaign in which a husband surprises his wife on their anniversary by taking her to an empty movie theater to view their wedding video.
Finding time and quiet to read is difficult even for those who love books, a problem many traditional bookstores ignore. Clerks in these stores know little about what they sell and often discourage browsing. Meanwhile, Borders Books & Music and Barnes & Noble, whose executives think more broadly about the book-reading experience, encourage browsing by providing comfortable chairs and hiring book-smart staff members to advise customers about possible purchases.
Jewelers Application: Many consumers dont know how to coordinate jewelry with clothing or what colors work best together. Train your staff to offer such advice. Another tip: Consumers are often too intimidated to try on much jewelry in a store. Make trying on even your most expensive jewels a key feature of the experience of shopping in your store. However, be security-conscious and do this in a special room to avert the risk of a sneak theft.
Add Function to Emotion
Most products appeal is either emotional (how it makes you feel) or functional (what it does). Jewelry fits more readily into the first category. But you can appeal to another set of customers by exploring its functional qualities also.
Conversely, some companies that offer function-oriented products try to add emotion to the shopping experience. For example, Starbucks, the coffee-house chain, imbued its commodity product coffee with emotion by associating it with a chic gathering place, status, relaxation, conversation and creative drinks. To those who value such things, Starbucks $3-per-cup price seems reasonable.
Jewelers Application: Adding more functionality to jewelry isnt as hard as it might seem at first. For example, offer more convertible jewelry, the kind women can dress up or down to suit their needs. Such diversity may better appeal to your function-oriented customers. Stress the benefits of newly popular colored gemstone jewelry to women who want to continue dressing in neutrals, but would like to add a dash of color to their wardrobes in keeping with fashion trends.
by Mark E. Dixon