Last Call for Digital Marketing Adoption

Businesses that fail to adopt sophisticated digital marketing strategies are facing an uncertain future, as consumer shopping behavior changes and retailers fight harder than ever for traffic.

Would you rather listen to this as a podcast? You can access it here: Podcast

?

In the early 1980's, I was in the home entertainment business. I worked for a company that sold billiard tables and other in-home leisure luxuries. The '80s were a time of major change in home entertainment preferences. Until then, the dominant forms of home entertainment (besides television) were activities like board games and puzzles, and if you were well-to-do, you had a billiard or ping-pong table, or even a foosball or air hockey setup.

New technologies hit us right in the bottom line. Suddenly, billiard tables weren’t selling, but video game systems and video cassettes were. We managed to be flexible, and shifted our business model. In less than five years, we went from three billiard table stores to 18 video equipment and video rental stores. I had just experienced my first business transformation driven by technology.

Technology Drives Social and Cultural Change

So in 1988, when Shoshana Zhuboff’s book, “In the Age of the Smart Machine,” was published, I was more than ready to read what she had to share. People working in the technology sector put this book at the top of their reading lists, but it should have been required reading for every business owner and manager in the country. Why? Because Zhuboff predicted how technology was going to change not only the machines that did the work and the people who ran them, but how industrial automation would change our relationship with work and, ultimately, our identities, behavior, and economy.

Heady stuff, right?

The jewelry industry also went through massive changes in the late 80's through early 2000's, but those changes were driven by offshoring for cheaper labor rather than by industrial automation. Yes, new technology was adopted by the industry, but nothing that transformed work or behavior in the way that automotive or paper manufacturing were changed.

And as a result, the jewelry industry missed (escaped? skipped? opted out of?) much of the technological revolution. Which is a problem, because in many areas of the industry we still work as if it’s 1979. But consumers are not buying that way.

Radically Changed Retail and Wholesale Dynamics

Until only 10 years ago, the retail store was still the center of consumer activity. If you wanted to explore or buy new products, you visited a retailer. Then, in a shockingly short period of time, the retail store was supplanted as the place to learn about, try on, and consider new products. Malls have been shuttered and retailers that were icons have disappeared.

Of course, the retail model can’t collapse without giving the wholesale model a knock-out punch. Wholesale companies have long depended primarily on trade shows to reach their retail audience. But if the retailers aren’t buying, how do the wholesalers survive? How do they reach their markets?

Yet, contradictory as it may seem, sales at retail are up.

Consumers Shop (at retail) Less, Buy More

Today, consumers do nearly all their shopping online. Not buying, mind you. But shopping. According to research by McKinsey, Forrester, and other retail research firms, footfalls at retail are down as much as 80%, yet sales at retail are up.

This is because the way consumers shop has changed. Consider this scenario: In the past, the average consumer would have visited ten retail stores to complete her annual holiday shopping. She would have purchased a few things in several of those stores along the way. In this way, she spread her retail dollars around to many different retailers.

Consumer shopping behavior has moved online, and buying behavior has been concentrated into far fewer retail storefronts.

Today, the consumer uses her smart phone to do nearly all her shopping research. She orders some of the harder-to-find or better-priced items directly online. Then, she goes into two retail stores to complete her buying. In those two retail stores, she appears to be spending slightly more than she would have spent had she wandered into ten different stores. Consumer shopping behavior has moved online, and buying behavior has been concentrated into far fewer retail storefronts.

There Is No Marketing Without Technology

The challenge for retailers is to become one of the very few retail stores a consumer walks into. The challenge for brands and wholesalers is to A) find and sell to those marketing savvy retailers, and B) help drive consumers to their stockists. But the burden for this cannot fall entirely on the brands and wholesalers. If the brands and wholesalers must carry the entire financial and technical burden of marketing, they will need to get the expanded margins that come from selling direct.

The good news is, that while buying behaviors have changed rapidly, we have just as swiftly developed new strategies for marketing – for both business-to-consumer and business-to-business. It is possible to reach consumers, influence their buying habits by serving their desire to shop online, and get them into the retail store. It is possible for brands and wholesalers to connect with and support retailers who are doing a good job deploying today’s technical marketing. And yes, it is also possible for brands and wholesalers to build a consumer base and serve it directly if that proves to be more beneficial to the bottom line than the wholesale/retail model.

But none of this is possible without marketing technology, and business owners and managers who ignore this reality do so at their own peril. It’s time for every jewelry business owner to do the work necessary to understand the full scope of marketing technology. This goes far beyond simply buying AdWords or posting on social media. It’s more sophisticated than gaining Instagram followers or seeking Facebook approval. This new reality requires that you embrace content marketing, SEO, SEM, marketing automation, inbound marketing, paid online advertising, and social strategies with the same vigor you apply to buying and selling jewelry. Are you thinking that you don’t have enough time or resources to do this? I know it sounds harsh, but the market doesn’t care. The phrase do or die actually applies here.

For people who worked in automotive plants or paper mills in the 1980's, when technology was upending labor and communities, this social change isn’t that surprising. When people asked my old boss, Mike Friedman, how he knew it was time to switch from billiards to video, he would ask in return, “How could I NOT know it? It was right in front of my nose.”

Maybe you saw the changes in market dynamics and developed a strong online strategy that’s driving consumers to your store, or to your stockists’ stores. If you did, then you know this is a never-ending learning cycle that requires commitment and ongoing development. If you didn’t, then it’s not too late to get started. But it will be. And soon.

Full-Length Presentation on Digital Marketing Strategy

Andrea Hill has created a full-feature presentation on the Digital Marketing Challenge. This presentation has been hailed as transformative by digital marketing thinkers, and been presented at numerous jewelry industry and retail conferences. It is available to you to watch, for free, as part of Andrea’s commitment to jewelry industry success.

Watch the Presentation Now

Learn More at The Gold Conference, April 12-13, 2018 | Bohemian National Hall, NYC

Andrea Hill will be speaking on the topic of how technology is driving social and cultural change and reshaping consumer behavior at the Initiatives in Arts and Culture's Gold Conference. Learn more and register to attend here: Initiatives in Art and Culture

More articles related to this topic:

Collaborations May be Key to More Sophisticated Marketing

Digital Consumers in the Physical World

Social Media Isn’t About Selling . . . It’s About Prospecting