Jewellery has always been a popular gift choice for Valentine’s Day, which makes it an important selling season for jewellery brands. For real jewellery brands, special occasions like Valentine’s Day are more important to them compared to costume jewellery brands as real jewellery is bought less frequently. This is simply because of the higher price point associated with real jewellery. Valentine’s Day is celebrated in countries around the world, with its origins largely affiliated with the west. As cultural influences transcend borders, there are increasingly more countries in the world celebrating Valentine’s Day. Aside from showcasing an exclusive Valentine’s Day collection, jewellery brands are riding on the wave by launching Valentine’s Day campaigns aimed at driving increased sales revenue or consumer engagement. Among the top 10 jewellery players globally, brands like Swarovski and Pandora are positioning themselves as shopping destinations for gift-giving during Valentine’s Day.
Source: www.pandora.net
Source: www.swarovski.com
Exceeding sales per square foot
Given the physical constraints of the retail store fronts, it is an obstacle for brands to deal with the wave of customers streaming in during Valentine’s Day. However, it is not possible for brands to expand their retail store during peak selling seasons in order to cope with the spike in demand. Therefore, it is important to formulate a strategy for brands to maximise their given retail space and supersede expectations in sales targets despite their physical constraint.
Beating the crowd with vending machines
Exceeding sales per square foot does not equate to setting up more sales counters within the store or employing more staff during peak seasons as such factors inculcate the diminishing returns to scale in economic terms. Instead, brands should look at adopting another channel aside from the traditional sales counter within their retail store, for example, employing the use of vending machines.
Traditionally used to dispense food items, there has been a proliferation of the use of vending machines in other aspects. The use of vending machines is no longer restricted to items of a lower price point. Example, Fendi introduced vending machines in its visual merchandising to woo the crowd. The use of vending machines for luxury brands juxtaposes the concept of vending machines which are typically used for convenient purchases. According to LVMH Moët Hennessy Louis Vuitton SA, which houses the Fendi brand, the vending machine was intended to lure crowds into the store.
Fendi vending machine in Fendi Rome store
Source: Fendi Instagram (https://www.instagram.com/fendi/)
Fendi vending machine in Fendi Beijing store
Source: Fendi Instagram
Herein lies an opportunity for brands to introduce vending machines and transform customer engagement to close sales. The use of creative props is usually adopted only during special store events and private events for a selected group of consumers, as part of fringe activities. However, brands can look to employ the use of vending machines as another channel of sales within the retail store, which would help maximise the store space. Additionally, such novelty is bound to draw crowds as well.
Viability of using vending machines in retail brands
In adopting the use of vending machines in retail stores, it is also important to analyse the type of product that is appropriate to be marketed through a vending machine. According to Pandora, charms make up the majority of its sales revenue. In its 2015 quarterly report, charms generated at least 65% of the company’s total revenue. With charms having a relatively easier purchase route compared to bracelets and rings, where the latter come in different sizes, charms are also easier gift ideas. With the adoption of a vending machine at the store front, customers looking to purchase gifts during special occasions such as Valentine’s Day or Mother’s Day would find it easier to complete the purchase through a vending machine to beat the crowd.
However, the use of vending machines in dispensing jewellery is limited to product categories that are homogeneous in size and are of a lower pricing point. Consumers would be inclined to purchase an item through the vending machine only if it is an item they can “pick and go” and which does not require any fitting. Additionally, they would more willing to purchase an item through the vending machine if the price point is low enough to encourage their consumption of the item.