How to navigate today’s smaller, more concentrated luxury landscape
Who’s Buying
The group Unity Marketing president Pam Danziger terms “lower-income affluents”—incomes of $100,000 to $249,999—have dropped out. (She’s talking about the nearly 22 million aspirational shoppers who drove luxury sales and store growth in the early 2000s by spending against their perceived wealth.) It’s the ultra affluents—earning $250,000 and up—and young affluents, aged 40 and under, who will lead the luxury market out of its economic doldrums.
What They Want
They want workmanship, design…but also something extra. Greg Furman, of the Luxury Marketing Council in New York City, calls it “connoisseurship,” when values like heritage and customization are leading purchase factors. It’s no longer, “Look at me, I have money,” says Marie Helene Morrow, president of Reinhold Jewelers in Puerto Rico. “It’s, ‘What do the things I surround myself with say about me, my values, my style?’?”
How to Sell It
Smart retailers will solicit clients’ input, says Danziger. Susan Fotos, owner of Higashi Pearls & Fine Jewelry in Lemoyne, Pa., asks customers what they’ve seen, what they like, and what they want. “It makes them feel a part of the store,” she says. Performance Concepts president Kate Peterson advises jewelers to incorporate tools like client books and computer programs to track special occasions, buying patterns, wish lists, and other stats that engage sales. “It’s relationship marketing,” says Peterson. “Value is no longer tied to what customers spend, but what they get for what they spend. They should get expertise, personal attention, and an engaging experience both in store and online.”
What to Stock
Danziger reminds fine jewelers that luxury buyers shop up-market, down-market, and in between—so product diversity is key. (Just because affluent consumers have money to burn doesn’t mean they want to pay more if they don’t have to!) But you don’t have to lose high-end merchandise or compromise quality. “The consumer craves something unique, lasting, and special,” says Morrow. “It doesn’t have to be a 5 ct. diamond. Making the shopping experience an exciting one, giving good value, and providing great service is what luxury is all about!” For Fotos, luxury means making her customers’ lives easier. “Our shoppers are busy, working professionals,” she says. “They trust that we are providing the best selection and prices possible, whether they’re looking for a $100 gift item or a $10,000 sapphire bracelet.”