Instore Magazine • May 2025 • Real Deal

A jewelry retailer discovers the limits of automated service the hard way BY MEGAN CRABTREE

FOR YEARS, Sterling & Crown had prided itself on its exceptional customer service. The family owned jewelry store had built a reputation on personal relationships, knowing their customers by name, remembering anniversaries, and offering thoughtful recommendations. But as technology evolved, management saw an opportunity. They believed AI could enhance the business by offering 24/7 responses and handling routine inquiries, leaving associates with time for more important tasks.

Their solution was “GemBot,” a chatbot integrated across the store’s website, online chat, and text messaging. It could answer frequently asked questions, provide basic product recommendations, and even schedule appointments. Customers appreciated the convenience, and with the staff spending more time on in-store clients, it seemed like a win-win.

Each year, Sterling & Crown’s in-store custom design event drew a surge of customers. Among them was Julia, a longtime client who had been shopping with the jeweler for over a decade. Her purchases were always significant custom pieces and high-ticket designs requiring expert attention. This year, she had something extra special in mind.

Julia wanted a custom-designed diamond necklace for her daughter’s wedding. She envisioned a 5-carat diamond centerpiece, incorporating sapphires from her late mother’s jewelry collection — a sentimental touch honoring the bride’s great-grandmother. Her budget was $12,000, and she trusted Ava, her go-to salesperson, to bring her vision to life.

Real Deal scenarios are inspired by true stories but are changed to sharpen the dilemmas involved and should not be confused with real people or places. Responses are peer-sourced opinions and are not a substitute for professional legal advice. Please contact your attorney if you have any questions about an employee or customer situation in your own business.

Late one evening, Julia reached out through the store’s website, expecting to hear from someone first thing in the morning. Instead, she got GemBot.

She detailed her request through the site, expecting a confirmation for an appointment with Ava. Instead, the chatbot responded with generic diamond pendants from the store’s online catalog. No appointment was scheduled, and no human followed up. Frustrated, Julia sent another message, trying different phrasing, hoping to bypass the bot. The responses remained seemingly canned and unhelpful. Though irritated, Julia decided to call the store directly the next day.

By morning, Sterling & Crown was overwhelmed with foot traffic from their annual event. Staff barely had time to check the phones, assuming GemBot was handling inquiries.

When Julia finally got through to a real person, she was told Ava was with another client. The associate quickly jotted down her name and number, instructing her to schedule online, the same system that had already failed her. Feeling dismissed, Julia decided it wasn’t worth the hassle of continuing to try and reach out.

Days later, after the event ended, the associate finally mentioned the missed message to Ava. Realizing the mistake, Ava called Julia immediately. But it was too late.

Julia had already taken her business elsewhere. Another jeweler had responded promptly, worked within her budget, and created the necklace in time for her daughter’s wedding. In addition, the competitor also upsold her three solitaire necklaces for the bridesmaids, a $2,000 add-on sale that Ava never had the chance to make.

Everyone at the store had assumed GemBot was working efficiently, but they had failed to set up safeguards. No one checked on the automated messages to follow up on abandoned conversations. In their eagerness to embrace AI, Sterling & Crown had seemingly lost sight of what had made them successful: personal service.

Ultimately, it had cost them a loyal, high-value customer. Now the owners had to ask themselves: Had they gone too far with AI, or had they simply failed to use it correctly? And how many other clients quietly slipped away, unnoticed?

MEGAN CRABTREE is founder and CEO of Crabtree Consulting, a boutique consulting firm with a proven track record of growing jewelry retailers and manufacturers for over two decades. Known for their data-driven approach, they identify barriers and create tailored growth opportunities, fueling success and helping clients reach their goals in the industry.

THE BIG QUESTIONS: 1 What could Sterling & Crown have done differently to ensure their clients received the personalized attention they expect while still taking advantage of modern technology? 2 In what areas of a jewelry store’s operations can AI be beneficial? 3 What can Ava do to try to win back her loyal customer?

In a personalized, customer service-oriented business, leave AI for helping with the copy on your email blasters. And if you are hoping to take advantage of technology, keep it for CAD.

When it comes to understanding someone’s personal taste and making them feel heard and valued, nothing succeeds, in this area, like another human! When it comes to designing a custom piece, clients want to have the opportunity to explain what they really want and have a real person not only understand what they are communicating but share in the excitement! A bot might be able to recommend items, no matter how off base. But as my mom said about my favorite dish she cooked for me, “It’s made with love.” Same thing when we make a beautiful jewelry piece for someone. It’s made with love and the desire to hear, understand, and make something special that they will be proud to own and wear forever. We are in the business of making memories. And when we are lucky enough to share in those memories, why not!!?

AI can be beneficial when writing copy for a promotion or an email blaster. It can also be handy when naming parties or events. Some people (not us) might even use it to help design a jewelry piece. But for customer service, it’s usually half on target and half frustrating for the consumer. So, we all need a higher rate than a 50% chance to please a customer. Therefore, leave it to the humans.

If I were Ava, I would reach out to the client and apologize profusely. Explain that we thought this technology would enhance the customer experience and it has not! And I would explain to the client how important she is to us. Also give her a private number (cell) so that she can reach me no matter what in the future. I then would offer her a gift card encouraging her to return and give us another try. An additional call from the owner could also be helpful. We all do our best, and sometimes, there is just no replacement for human interaction and compassion.

The store should have assigned a dedicated client services “ambassador” to monitor the AI daily, perhaps setting up alerts. You don’t want clients (whether returning or new) to be frustrated in any way. These days, people’s tolerance is thin, and the expectation is that calls will be returned promptly. Someone should have run a few “mock” calls to see what challenges using this type of system creates.

Winning back a client is not easy. You can do 100 things right and one negative experience is what stands out. Ava should reach out, send her best wishes on the daughter’s nuptials and apologize on behalf of the establishment. Perhaps add they would have been honored and delighted to contribute to such a special event. By switching to AI in an effort to streamline, they missed what would have been a very special opportunity. Perhaps invite the client to lunch and offer some special purchasing opportunity. Send flowers and a note — I think it should have a personal element because the client believed she had a special relationship with Ava and with the establishment and rightfully feels slighted.

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Chatbots are amazing time savers, but here’s the glitch: Real world moments, especially with high-end customers, can unfortunately get lost in the automated shuffle. Different providers can place alert parameters on keystroke words like ORDER, RESPOND, and PRICE (you may choose your alerts). Rather than allowing GemBot to go rogue, set up a system where it flags high-value inquiries (like Julia’s) for immediate human follow-up. That way, if GemBot doesn’t quite get it right, a real person can swoop in before the customer feels neglected. Automate a follow-up check for abandoned conversations. Maybe GemBot can’t sense a broken heart over missing the chance to design a wedding necklace, but a well-timed reminder from a human could.

Don’t use AI, period. Customers expect when they send a message at night that they will get an answer in the morning; it doesn’t have to be instantaneous. I can’t tell you how many companies I once frequented that I have stopped using because of phone banks or AI. Have a real person do everything. If you don’t have the staff, hire someone or expand hours. Jewelry is a personal business, and if you’re not personal, they may as well buy from some faceless online corporation.

Nothing replaces the human voice or response to an inquiry. Everyone wants to feel they matter or are important, and nothing can do that like human interaction. It’s in your voice.

The only thing I can think of is a line from a movie from 20 years ago: “Open the pod bay doors, HAL!” We are in the personal business, and though there is always room for modernizing your operation, be careful about relying on AI.

Nobody likes systems that are designed to prevent customers from speaking to a real person. Customer service should always put a top priority on serving customers, not on saving time or saving money.

If an AI system is used to answer routine questions, it should not be used as a substitute for friendly service, and not for any sales-related questions. It should also make it very easy for the customer to chat with a live person or leave a message after hours. If you have extensions for individual salespeople, it should route the customer to that person.