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Does the Jewelry Industry Have a Competitiveness Problem?

Competitiveness Means Meeting Customer Needs

originally posted on LinkedIn

The nature of business is competition. There can be collaboration – where businesses team up to compete together. There can be good will, and there should always be ethics and character. There can be tremendous respect among competitors, and in the strongest industries there is. But competition is at the core of business. And yet sometimes I wonder – do we understand the nature of competition well enough in the jewelry industry?

Competition isn’t about putting another company out of business. Smart companies know that strong competitors make them better, smarter, faster, more profitable. About six years ago a new company called Flourish and Thrive Academy jumped into my competitive space and started doing smart things on the internet that I wished I’d done first. But I hadn’t. So what did I do? I got better, thanking the owners of F&T (Tracy Matthews and Robin Kramer) every step of the way. Why? Because a business segment is only healthy if the players in it are growing it. When the automobile industry became complacent, overall auto sales got soft, because consumers were not excited. Once the big auto makers got their groove back, people started buying more cars more often. Sometimes Ford is on top, sometimes it’s Toyota, and the competition keeps it all fresh for consumers. Good competition means everyone makes more money.

As my favorite competitiveness guru Michael Porter likes to point out; in war, or the Superbowl, there’s only one winner. In business competition, there can – and should be – many.

When Blue Nile hit the scene, we had a bit of an industry freak-out. What we should have done is paid more attention, learned from them, and competed with them. Not with prices (which is what happened), but with value. Not with one kind of value, but with many different kinds of value. Because Blue Nile is the right diamond seller for some kinds of diamond buyers, but certainly not for all kinds of buyers. Many people said this very thing, but it was rarer to find companies who went out and made their case to consumers with compelling and persuasive marketing and messaging.

We had a similar reaction to the ‘Big Boxes’ cutting in on our turf. In commerce there is no turf. There are just customers, and customers don’t care about your perception of your turf. Customers have needs, and the companies that think hard and fast and jump in and meet those needs win their business. This is exciting, because customers don’t share the same set of needs. So to be competitive, you identify a group of customers with a specific set of needs, and you get ambitious about meeting them. Good competitors know that you don’t need all the customers – you just need the right customers.

Competition isn’t about doing what the company next to you is doing. It’s about turning your attention to the customers you serve, and challenging yourself to find new ways to give them what they want the way they want it. It’s about finding ways to meet needs that your customers haven’t even articulated yet. And while you’re at it, go find some new customers and turn them on to what you do.

Competition isn’t comfortable. Competition is about innovating and taking risks, and those things are inherently uncomfortable. Competition makes you sweat, makes you train, makes you dig deep and come up with new ideas and new skills. It’s not about coming up with new ideas once every few months or a few times a year. It’s about trying new things every week — every day. Competition favors the curious, the smart, the hungry, the enthused, the finishers. Without competition we wouldn’t be closing in on a cure for Alzheimer’s or driving affordable electric cars.

Competitors welcome the disruption that is always and forever coming their way. Good competitors create the disruption. I was told recently when speaking at a jewelry industry event that we weren’t supposed to use the word disruptive, because that word scares people. Consumer needs change and our businesses must change with them — and ideally, a step or two ahead of them. Change is inherently disruptive. Go be disruptive.

So sometimes, I worry that we are an industry that fears competition instead of embracing it. Closed systems tend to shrink, and any system that fights to keep innovation and competition out is closed. Systems that work hard to protect territory instead of working hard to expand it are playing a zero-sum game. Our industry requires people with a drive to create new kinds of value and find new customers. People who don’t want to do things the way they’ve always been done, but instead, have a powerful urge to carve new paths and discover new opportunities. People who understand that serial failure precedes most success. We have some businesses like that. Retailers that are quietly pursuing ambitious agendas. Designers finding new ways to reach consumers. Manufacturers thinking more like aeronautics companies than jewelry workshops. But not enough. Not yet.

Competition can be tiring. It doesn’t care if you’re overwhelmed, or sick, or out of ideas. It’s not personal. Competition isn’t personal. It’s just people, with needs, directing themselves toward the businesses that do the best job meeting those needs. That’s probably why entrepreneurship isn’t for everyone. Because for every beautiful thing we make, there has to be an even bigger effort to connect that thing with a consumer, and that part is competition. Competition doesn’t care how hard you worked to make that thing. It cares if that thing – and the way you deliver it and service it – fits the customers’ needs and interests.

We are not entitled to market share. Customers don’t owe us any loyalty. But we owe it to each other to keep raising the bar, invite in new voices, learn from other industries, try new things and fail, try again, and again. We owe it to each other to learn faster and better and make new things happen. We owe it to each other to challenge each other and accept those challenges. We owe each other an industry charged with the energy of competition. We owe each other an industry with a competitive mindset. Why do we owe all this to each other? Because that’s how we’ll once again expand the jewelry industry and create more opportunity for everyone. That saying “may the best person win” . . . that’s not a threat. That’s an invitation.

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