A few months ago I went shopping for new eyeglasses, and stopped in a new optical store near my home. I told the shopkeeper what I wanted – round frames similar to Harry Potter’s. The shopkeeper smiled and said, “No, they are out of fashion. What you want are the newest rectangular frames. That’s what everyone is buying, and I’ve got the best selection in town.” At that point, I ceased being a customer; instead, I put on my retail-consulting hat, looked the shopkeeper in the eye and said, “I am the consumer. I am king. I know what I want, and you don’t have it.”
He stammered at being addressed so directly. He tried to save the sale by offering me a “special discount” on any eyeglasses in his store. I exited his store, never to return.
This merchant was clearly out of touch with his customers. He was showing eyeglass frames that various manufacturers had sent him. Those manufacturers were also not in touch with either the consumer or the retailer, both of whom could provide feedback about fashion trends such as eyeglass shapes, colors and styles.
As a retail consultant, I call this “putting the dog food out for the dogs and hoping that they will eat it.” That kind of merchandising is not sustainable – it won’t work.
As it turns out, this scenario appears to be rampant in the diamond industry. Once, when I gave a speech to about 300 diamantaires in Israel, I asked those in the audience to raise their hand if they had been in a retail jewelry store in America in the past year or so. Three hands were raised. If one percent of the diamond suppliers have been in a retail jewelry store recently, that leaves ninety-nine percent of the diamond suppliers in the bourse who have NOT recently been inside of a diamond and jewelry retail outlet – the final link in the chain of distribution.
How can a diamond supplier – cutter, polisher or wholesaler – have any idea of what product to make, if they are out of touch with the consumer? It doesn’t make any difference which market they are in – China, India, the U.S., or Europe – if you don’t produce what the customer wants, you will fail.
A couple of decades ago, Burger King changed the way fast-food hamburgers were sold in America when they introduced the slogan: “Have it your way.” Until then, all fast-food hamburgers came only one way: with mustard, ketchup and pickles. That was much like Henry Ford’s first cars; he said, “You can have any color you want, as long as it is black.”
Today, retailing is all about “having it your way.” Granted, the typical retail jewelry store has a vast array of diamond jewelry. But, is it what the customer wants? Or, it is what the diamond suppliers produce in their factories?
Recent diamond sales and price trends show that fancy shape diamonds are in demand in the U.S. market. Are diamantaires reacting to this change in demand? Or, do they continue to produce goods that don’t reflect consumer demand, especially since it is easier to cut and polish a round diamond than a fancy shape?
To be successful, diamond suppliers must – operative word: “must” – communicate with everyone in the chain of distribution, and everyone in the chain of distribution must listen to the retail consumer – the shopper. The consumer is king. Shoppers vote with their feet and with their dollars. If diamantaires, jewelers and retailers don’t have what shoppers want, they will shop elsewhere and spend their money on other goods.
A post-script: the eyeglass retailer who could not meet my needs is currently running a “going-out-of-business” sale.
