Jewelry is a piece of iconography. Though its utility can be debated, owning an expensive piece of jewelry symbolizes affluence, status, and luxury.
According to Edahn Golan, a leading authority on diamond market research, the report for Q1 2020 offers a grim description. The demand for jewelry fell to its lowest since 2009. The sales dropped 177% in the first two months of the pandemic. The supply for rough diamonds plummeted to near zero. The sale of synthetic diamonds also dropped by 72% and the prices were slashed by 13%.
However, the jewelry industry can turn to rebound fairly quickly if they implement the right strategy. Historically, the jewelry industry has revived quickly than other industries. The reason is simple: the reason for jewelry purchase stems from an emotional need.
As Erich Fromm said, “The ability to be alone is the condition for the ability to love.”
The pandemic will come and go. But love stays forever. And so will jewelry. That’s the essence that needs to be captured by the jewelry industry.
In other industries, business expansion is usually done by acquiring new customers. However, the jewelry industry targets its existing customers in order to improve their purchase frequency. Since jewelry is an expensive commodity, customers usually purchase from the brand they trust. In return, the brand rewards its customers for their loyalty. Specific to the jewelry industry, customer retention is a better strategy than customer acquisition as it offers a massive return on investment by improving Customer Lifetime Value (CTV).
Not everything we buy is for real consumption. Look around the stuff that you purchase often. You will find many items you really did not need in the first place. But you have purchased them anyway. We think we make purchasing decisions because of utility. However, there is a deep-rooted human desire for external validation and recognition. The greater the commodity, the greater is the desire to own it. Once you hit the right nerve by discovering the psychological reason for purchase, there is no more profitable business than jewelry.
Businesses that have robust 360-degree visibility and a strong customer retention plan emerge real winners. Having a customized jewelry loyalty platform for your business can improve retention rates and boost repeated sales.
If you are into the jewelry business, your primary focus should be on your repeat customers. How do you retain your customers in the jewelry business? The loyalty program is one way of rewarding your customers to keep coming back to you.
Promote jewelry purchase within your existing customer base by influencing their habits and decisions with reward points. A jewelry loyalty program is designed with a bottom-up strategy which makes customers’ shopping experience easy and convenient.
Some of the best jewelry reward programs focus on exclusivity. The membership is designed in such a way that it makes one feel privileged to be a part of a rare club. There is a great value in rarity. The loyalty programs for jewelry often pay the best dividends, because it is based on the deep-rooted psychological need as mentioned earlier.
While loyalty is a strategy, reward programs are the tactics. The best loyalty programs always make customers feel that they are in control, rather than rushing them towards the point of sale. People like to buy, without being sold. Since people still “look, touch, and feel” before buying jewelry, the transition to digital channels can be challenging. This is the reason customer loyalty needs to be built step-by-step.
Like every strategy, the first part is knowing exactly what loyalty program suits your business.
Loyalty programs for the jewelry industry can be quite different from conventional loyalty offerings. Traditionally, customers earn points on every purchase. However, this is a transactional deal mainly suited for industries that treat every customer equally. When it comes to jewelry, use customer data to identify your most sophisticated group and build a loyalty program to keep them engaged for the long term.
It does not mean those remaining customers, who are not part of the privileged pool, must be ignored. Connect with your customers by offering them a free loyalty program. The free points system should be with limited features, only to increase customer engagement. If they want to use the exclusive features, always keep the option open to join the privileged pool.
The next part is to stay visible to your customers.
Make your customers loyal by always being visible wherever they go. Involve internet influencers and ambassadors to place your brand in front of your customers. You can combine your loyalty program with influencer marketing because of the opinions of influencers matter.
You can hit the jackpot by combining your customer loyalty program with social media. Give them reward points for every like, share, or comment. There are other methods of engagement such as contests and video commerce.
A loyalty program always offers incentives for customers if they engage with the brand in any form. Especially in the jewelry industry, user-generated content can spread awareness and positive word-of-mouth. Reward points to users if they click a picture with your jewelry and post it on Instagram with your hashtag.
Out of sight is definitely out of mind. But there’s a way to stay in the mind of your customers forever.
As mentioned earlier, people buy jewelry to keep it for a lifetime. Make their purchase experience so delightful that it becomes a happy memory of their life. It strengthens customer loyalty and builds lifetime loyalty.
Another way to earn loyalty is by building personalized jewelry for your customers. Who doesn’t like a personalized piece of jewelry? If jewelry bears the testimony to a personal tale, it is priceless for the customer. Use the Diderot effect to your advantage by attaching the identity of the customer to jewelry, and see the magic that unfolds.
If the customer is able to find its own story in your piece of jewelry, you have hit the right chord.
If customers get more than what they expect, it creates a ripple effect that helps your brand in the long run. They will stay emotionally connected to you and visit you more often. Your competitors won’t be able to sway your most loyal customers if they have emotionally invested in you. This is exactly the reason we see Apple stores flooded before the launch of a new iPhone. A loyalty program for your most loyal customers should have an element of surprise: a VIP package, a special discount, or a freebie.
Diamond Per Tutti (DPT), a noted Belgian company dealing in natural diamonds, has designed a loyalty program that consists of multiple tiers. A reward point is called ‘carat’, which is earned after making a purchase of €1. The more carats you accumulate, the higher tier you belong to. The tiers are named Radiant, Emerald, and Marquise with increasing order of importance. Like every other jewelry loyalty program, DPT promotes high-tier benefits such as VIP shopping deals, pre-launch invitations, and special discounts. Another way to earn carats is by engaging with DPT’s social media channel which is integrated with their reward program.
How does that work? Say your birthday is in December and you want a gift. Why not buy a diamond necklace at Pandora which offers 15% off just because it is your birthday?
That’s how you build customer loyalty and facilitate a purchase. Many brands have emulated Pandora’s jewelry reward program successfully.
Swarovski Crystal Business, an Austrian jewelry business with over 3,000 retail stores across the globe, has adopted a tier-based system for rewarding its most loyal customers. The loyalty program, known as Swarovski Club, consists of three tiers – Bronze, Silver, Gold – depending on the purchasing power of the customer. A standard member gets perks such as exclusive pre-sale access, a monthly style subscription, and a special birthday discount. The benefits amplify after reaching higher tiers, unlocking premium, and other VIP benefits.
Swarovski Crystal Club is an exclusive loyalty program available to VIP customers on a subscription basis. This VIP program offers products that cannot be accessed by the members of the standard loyalty program.
Stella & Dot, a US-based jewelry brand focused on digital platforms, offers its most exclusive VIP benefits for the members of its loyalty program, Style Club. The membership is available at $29 per year for all customers and hostesses in the US and Canada, except individual business owners.
Some of the instant benefits of the Style Club include free shipping on the first order, 10% product credit on each order, and early access to new products for exclusive members. When you spend your first $50, you get a welcome gift as a VIP member.
If you are looking to design an all-inclusive loyalty program for the jewelry business, we are here to help. Annex Cloud helps you build a customer retention strategy by implementing a reward program tailored for the jewelry industry. As a loyalty partner, we have successfully implemented hundreds of luxury and jewelry programs that have yielded the best results. Request a free demo or consult us now!