Conventional wisdom in retail is that on Black Friday, the day after Thanksgiving, the bottom line of retailers’ account books goes from red to black as annual losses turn to profits. It might have been true once but not anymore.
“Back in 1995, nearly one-third of the typical retailers selling gifts were generated in the last three months of the year. In 2014 it dropped to 29%,” tells Pam Danziger, president of Unity Marketing, Stevens, Pennsylvania. “The fourth quarter is not the moneymaker it once was as shoppers’ behavior has changed.” She attributes Internet shopping the game changer that disrupted the market as consumers turn to the Internet to select, research and buy gifts.
In its five-year study released in 2015, Unity Marketing reports Christmas gift spending has been flat since 2009, but overall spending on gifting increased nearly 7%. Gifters spent an average of $1,850 on gifts, wrap and cards. About 45% of that spending in the last year went to Christmas, down from 48% in 2009. Yearly retail sales quarter-to-quarter are flattening out.
Unity estimates the gifting market to total more than $131 billion. The opportunity for retailers to grow their share of the gifting market rests on attracting gift shoppers throughout the year, for other holidays, and occasions like birthdays, the birth of a child, weddings, anniversaries, and graduations, cites Danziger.
While the big gifting holidays remain important, birthdays give retailers reasons to celebrate everyday. “Every quarter 25% of your base has a birthday,” reminds Kate Peterson, president of Performance Concepts, Montgomery Village, Maryland. She says client relationship management is key. “Know your customers! They will tell you what you need to know if you listen to them.”
Focus on frequent customers and customize the approach, says Peterson. Don’t blanket your client base with the same pitch. Have sales associates divide and conquer to reach customers with personal messages. She says the reason many consumers unsubscribe from email marketing is the message is too broad. “It used to be consumers sorted themselves out and went to retailers that had what they wanted. Now they expect retailers to customize the experience for them.”
Remind and guide customers, and be their problem solvers, advocates Liz Chatelain of MVI Marketing and Jewelry Consumer Opinion Council, San Luis Obispo, California. “Promote your store as a gift destination. Plant the seeds in signage and marketing messages. Retailers should be asking things like, whose birthday is it today?” She advises jewelers create gift displays/posts of bestsellers for different gift-giving occasions.
It’s about creating cultural imperatives, says Scott Rauch, president SHR Jewelry Group, a division of SDC Designs, New York, who hopes to do that for the birth of a child occasion with its new collection Miracle Links. “Next to marriage (with engagement and wedding rings iconic), no other occasion—birthdays, anniversaries and personal milestones—has a specific product associated with it,” says Rauch, recognizing DeBeers’ success with three-stone, two-stone and journey diamond styles.
Rauch describes the brand’s patent-pending Miracle Links as a customizable open-circle design necklace in sterling silver and 14K gold, with/without diamonds and gems. The large circle represents mom, the smaller linkable circles represent each child. The line, which successfully launched for Mother’s Day 2015 exclusively through Signet, is now open to add retail partners.
Chatelain cites significant audience potential for year-round sales for this category, with 4 million births every year, 1.6 million first-time moms, and 85 million mothers in the U.S. She says most women would like jewelry for the birth of her child and men are eager to give it, but don’t know what to get. “Jewelers tell me their whole store is a push present, but you have to present gift ideas, men want the guidance, and they must be items women consider very personal.”
Personalization is key for any special gift. Products including initials, engravings, charms, and iconic symbols remain go-to presents, with brands like Chrysalis and Alison and Ivy offering great examples.
Appealing to women of all ages Chatelain advocates jewelers milk the charm bangle trend for all its worth, while gauging what consumers want to see next. “What’s next normally comes from the manufacturer down, but I encourage jewelers to send ideas up the pipeline.”
Diamonds remain a no brainer for special gift giving, advocates Maren Pfister, merchandise manager, Ostbye, Minneapolis, Minnesota citing the fashion forward so everyone can find their sparkle.”
Pfister also cites a strong trend for gemstone stackable rings for occasions like the birth of a child and anniversaries. Chatelian encourages jewelers do a better job of promoting birthstones to millennials, who don’t even realize the concept.
Kathy Grenier, marketing director Imperial Pearl, Providence, Rhode Island, reminds that almost everyone has an emotional connection to pearls. “They’re an iconic gift that’s always appropriate.” But jewelers need to identify pearl gifts for different occasions in styles from classic to fashion, suggests Wendy Fox, senior director of sales independent division for Honora, a Richline brand in New York. “Pearls can start at $25 to $35 for a simple silhouette and go from there.”
Watches too make great gifts to mark special moments in time. Priscilla-Marie Ilarraza for Seiko notes that technology is a huge factor when deciding on a gift for men, with traditional watches that hold cutting edge technology like Seiko’s Radio Sync Solar popular; and fashion is important for women who want to mix smaller, jewelry-inspired watch styles ala Tressia with stacking bracelets.