ColumnistsMay 24, 2022
The PR Adviser: 10 Questions to Contemplate ColumnistsMay 31, 2022
Squirrel Spotting: Growing Your Business When Unit Sales Peak
Discount less and sell more expensive products, Peter Smith writes.
Peter Smith is an industry consultant, speaker, sales trainer, and author. He can be reached via email at TheRetailSmiths@gmail.com.
Dan Ariely, the author of “Predictably Irrational,” one of the seminal books on psychology, wrote, “If we see a discounted item, we will instinctively assume its quality is less than that of a full-price item—and then, in fact, we will make it so.”
The psychology of pricing is no easy matter.
In many respects, we see what we want to see, and, absent the safety of company prohibitions, our actions are often the result of personal biases, effected with little consideration for the overall health of the business or the longer-term benefits to customers; pricing becomes nothing more than a baseline for discussion, even as that discussion is often a catalyst for customer anxiety.
Price ambiguity can, at its worst, be a descent into the abyss of unprofitability.
Accepting the profound impact that pricing has on profitability, and, consequently, the health of a business, one would expect a good deal more discussion on the subject, as a moral issue, as a practical matter, and from the perspective of consumer psychology.
With the amazing run we are seeing with jewelry and timepiece sales these past couple of years, it would be easy to ignore the impact of discounting and pricing decisions in general. However, there are signs now emerging that should signal a note of caution for the near future.
The biggest of those signs is a flattening of unit sales with independent retail jewelry stores.
Related stories will be right here …
The psychology of pricing is no easy matter.
In many respects, we see what we want to see, and, absent the safety of company prohibitions, our actions are often the result of personal biases, effected with little consideration for the overall health of the business or the longer-term benefits to customers; pricing becomes nothing more than a baseline for discussion, even as that discussion is often a catalyst for customer anxiety.
Price ambiguity can, at its worst, be a descent into the abyss of unprofitability.
Accepting the profound impact that pricing has on profitability, and, consequently, the health of a business, one would expect a good deal more discussion on the subject, as a moral issue, as a practical matter, and from the perspective of consumer psychology.
With the amazing run we are seeing with jewelry and timepiece sales these past couple of years, it would be easy to ignore the impact of discounting and pricing decisions in general. However, there are signs now emerging that should signal a note of caution for the near future.
The biggest of those signs is a flattening of unit sales with independent retail jewelry stores.
March’s decline of 1 percent and April’s decline of 2 percent might not yet trigger fire alarms, but they are import indicators as unit sales have long served as a proxy for foot traffic. Put simply, foot traffic has likely begun to recede from the heady days of late 2020 and 2021.
If you plan on growing your business in an environment with fewer people coming through your door, and fewer units of sales, you must explore strategies to increase your average ticket.
There are effectively two ways to do that.
The first is to stop discounting, or at least discount less, and the second is to sell more expensive products.
In a prominent case on price perception, researchers from Stanford and California’s Institute of Technology tested wines on students while measuring their brains on fMRI technology.
Without telling the students, the researchers presented the same wine twice. Once, telling the students that the wine was a reasonably priced variety. The second time, telling the students that the wine was a very expensive type.
The reaction of the students was to point to the most expensive wine (again, the exact same wine they had tasted earlier believing it to be a lower price) as the most enjoyable.
However, rather than arriving at their assessment of the “expensive wine” because they believed they ought to prefer the expensive wine (who among us wants to admit we can’t tell the difference between ordinary and extraordinary wine?), what the researchers discovered was something they had not expected.
“If you plan on growing your business in an environment with fewer people coming through your door, and fewer units of sales, you must explore strategies to increase your average ticket.”
When the expensive wine was presented and the students were told it was the expensive wine, there was a flurry of activity in their medial orbitofrontal cortices not witnessed when they believed they were drinking the lesser priced wine. That’s the area of the brain where we perceive pleasantness.
In short, telling the students that it was a higher-priced product actually changed their neurology and improved their enjoyment of the wine.
Roger Dooley wrote in his book “Brainfluence: 100 Ways to Persuade and Convince Consumers With Neuromarketing” that, “What the research shows is that what customers believe about a product can turn into reality; if they believe a product is better, it will be better.”
This is probably as good a time as any to remind ourselves that we can’t make a silk purse from a sow’s ear. I’ve never seen any research to support the idea that taking a poorly constructed piece of jewelry and marking it up to pretend it is something else is ever a good long-term strategy.
What customers want more than anything else is to come away from their shopping experience feeling good about what they purchased. They don’t want to harbor regrets about whether they bought the right thing or not and, provided the quality is good and as stated, they actually feel better when they pay more for a product. They assume that the premium priced product is a better quality.
You may believe your customers want the lowest price. Your salespeople may be primed to negotiate and make a deal with every diamond conversation. You may even believe that you are doing your customer a favor by discounting your products or by under-selling the customer.
But you would be far better articulating the real value proposition of your products. Understand what customers really want and inspire them to reach and extend themselves to acquire the best products they can. That, ultimately, is the best deliverable.
You might even include a nice bottle of wine.
More on Columnists
The Latest
IndependentsNov 25, 2025
Pearl Stringer Margaret Hoisik DiesShe is remembered as an artist who loved her craft and was devoted to her faith, her friends, and her family.
SourcingNov 25, 2025
Finestar Opens Diamond Manufacturing Facility in JohannesburgIt joins the company’s other manufacturing facilities globally, including in India, Botswana, and Namibia.
TrendsNov 25, 2025
Amanda’s Style File: Polka DotsThe polka dot pattern transcends time and has re-emerged as a trend in jewelry through round-shaped gemstones.
Brought to you by
Impacting Tomorrow TodayHow Jewelers of America’s 20 Under 40 are leading to ensure a brighter future for the jewelry industry.
CrimeNov 25, 2025
Former Arizona AG Official Charged With Trafficking Stolen JewelryVanessa Hickman, 49, allegedly sold a diamond bracelet that was mistakenly sent to her home.
Weekly QuizNov 20, 2025
This Week’s QuizTest your jewelry news knowledge by answering these questions.
Events & AwardsNov 25, 2025
GIA Awards Susan Jacques With Its Highest HonorGIA’s former president and CEO was presented with the Richard T. Liddicoat Award for Distinguished Achievement.
Recorded WebinarsNov 24, 2025
Watch: Top Tips for Social Media EtiquetteSocial media experts spoke about protecting brand reputation through behaving mindfully online.
Brought to you by
Roseco Releases New Full-Line CatalogRoseco’s 704-page catalog showcases new lab-grown diamonds, findings, tools & more—available in print or interactive digital editions.
WatchesNov 24, 2025
Breitling Reveals Plans for Gallet, Universal GenèveIn 2026, the three will come together as “House of Brands,” with Gallet sold in Breitling stores and Universal Genève sold separately.
CollectionsNov 24, 2025
Muse Debuts a Wicked 'Have a Heart x Cynthia Erivo' SequelThe second drop, which includes more Elphaba-inspired pieces from additional designers, will continue to benefit nonprofit Dreams of Hope.
IndependentsNov 24, 2025
J.R. Dunn Jewelers Names New PresidentSecond-generation jeweler Sean Dunn has taken on the role.
MajorsNov 21, 2025
Natural Diamond Council Names New CEOAmber Pepper’s main focus will be on digital innovation and engaging younger consumers.
SourcingNov 21, 2025
De Beers’ Branded, Traceable Diamonds Roll Out to 19 Retailers Called “Origin by De Beers Group,” the loose, polished diamonds are being sold in a total of 30 stores in the United States and Canada.
CollectionsNov 21, 2025
Piece of the Week: Melissa Kaye’s ‘Rocky Infinity’ NecklaceThe lariat necklace features a 4.88-carat oval-cut Zambian emerald in 18-karat yellow gold.
AuctionsNov 20, 2025
Vanderbilt Jewels Shine at Phillips Sale, Pink Diamond WithdrawnA 43-carat sapphire brooch from the Vanderbilt collection was the top lot of the Geneva sale.
CollectionsNov 20, 2025
Rebecca Rau Jewels Debuts With ‘Then & Now’ CollectionRau is a fourth-generation art and antique dealer from M.S. Rau gallery whose first jewelry collection merges artifacts with modern design.
Policies & IssuesNov 20, 2025
RJC Names New Executive DirectorFormer De Beers sustainability leader Purvi Shah will take over the role in February 2026.
WatchesNov 20, 2025
LVMH Takes Minority Stake in Citizen Group-Owned Movement Maker La Joux-Perret is based in La Chaux-de-Fonds, Switzerland, and makes solar quartz as well as mechanical watch movements.
GradingNov 20, 2025
Julia Griffith Joins SSEF as Head of EducationShe previously taught at Gem-A and is the founder of The Gem Academy.
CollectionsNov 19, 2025
Larkspur & Hawk Celebrates 25 Years With Helena Bonham Carter CampaignThe British actress and her daughter modeled pieces from the brand’s new “Palette” capsule for its “Once Upon a Time” holiday campaign.
TechnologyNov 19, 2025
Google Has a New Form for Reporting ‘Review Bombing’ Attacks Plus, the tech giant shares the steps retailers should take if they believe they’re a victim of a review extortion scam.
IndependentsNov 19, 2025
Houston Jeweler Keith Shaftel Retires, Next Generation Steps In Danny and Gaby Shaftel are now Shaftel Diamonds’ CEO and chief operating officer, respectively.
TrendsNov 19, 2025
Midas Chain Releases 2025 Holiday Style GuideThe jewelry manufacturer’s seasonal offering features its new “Melodie” bangles, as well as mini stud earrings and layering pieces.
Events & AwardsNov 18, 2025
NYC Jewelry Week 2025: 12 Must-See EventsWith more than 140 activations taking place in New York City now through Nov. 23, these 12 events are can’t-miss moments.
MajorsNov 18, 2025
Lugano Diamonds Files for Bankruptcy, Looking for BuyerThe Chapter 11 filing follows the resignation of CEO Moti Ferder, who stepped down after an investigation into the company’s finances.
Events & AwardsNov 18, 2025
A Giant, Bejeweled Moldy Berry Is on Display in LAThe artwork is part of an exhibition featuring works by Kathleen Ryan, an artist known for her gemstone-studded rotting fruit sculptures.
SourcingNov 18, 2025
Another Diamond Company CEO Steps DownMark Wall, president and CEO of Canadian mining company Mountain Province Diamonds, will vacate his position next month.
