Every day someone asks me whether we are starting to climb out of the sluggish economy or if it will continue for an extended period of time. Realistically, history has shown that even when the economy experiences an uptick after a recession, the jewelry industry experiences a much more gradual turnaround. The average growth rate during the first year of recovery averages only 0.3 percent for jewelers. Boom times that we all experienced in the past are unlikely to return any time soon, but that doesn’t mean it’s time to shutter the operation. In fact, we’re advising jewelers to embrace and adapt to this new reality now and to move quickly to minimize performance deterioration.
It’s important to recognize that shoppers have a lot more options today than they had in the past. They have become more savvy and selective, and jewelers need to fight harder and be more persistent to ensure that their customers are loyal to them. It is extremely important to not only offer great products that are attractively priced, but also to create a shopping experience that is both convenient and memorable for the shopper. The following are a few ideas for reaching this goal.
• Assess where you stand in the marketplace. Shop your competitors and compare what they do in their stores. Call upon your employees and family and friends to evaluate the competitors also. You may be surprised at how differently someone else may see the same situation.
• Speak to your suppliers and ask them for ideas that they know to have been successful for other retailers.
• Speak with your own customers and get feedback as to why they shop your store and ask for recommendations. Invite some of your best customers to a special roundtable luncheon and ask them for advice on how you can improve your service, what products they would like to see and how they view your store layout. Offer them a special discount or other perk for their assistance.
• Review your policies and procedures, minimize costs and identify areas for improvement within the internal operations of your business.
• Focus on your inventory mix and identify your best selling SKU’s. Make sure you have ample supply of the best selling SKU’s.
• As customer buying habits have changed and the majority of jewelers are seeing a reduction in the average ticket price of purchases, you should make sure your current inventory mix accounts for these changes. Is your average ticket price at the right level?
• Identify problem SKU’s. How long have they been in stock? Reduce the price of these items to increase your chances of converting them to cash, allowing you to reinvest in faster moving inventory. Advertise these reduced prices to increase traffic in your store.
• Review your sales staff. Are there areas for improvement? With the large amount of employee turnover occurring during a weakened economy, there may be several opportunities to recruit stronger talent.
• Review your advertising budget. Are you spending your dollars in the most effective way possible? Is your sales staff keeping your mailing list up to date? Are you monitoring the results from your current media buys? If a certain amount is dedicated to newspaper and you are not experiencing effective results, reallocate those funds to another medium that may be more effective.
• Speak to other local retailers and discuss how you may be able to create partnerships to reciprocate and cross-refer. Offer your customers discount cards to visit the other retailer in exchange for the other retailer offering similar benefits to your customers.
• Look into partnering with a local charity and hold a special event with a portion of the proceeds going to the local charity.
Part of the fun – and challenge – of running a business is constantly seeking ways to do things a better way. In order to survive during an economic downturn, jewelers must be willing to adapt to keep their customers satisfied. By adopting a few simple changes, you should be able to maintain your customer base and stay profitable, even in a down economy.
Bob Epstein is CEO of Silverman Consultants, LLC. Offering a legacy in sales strategies for jewelers since 1945, Silverman Consultants provides guidance to store owners seeking to turn around a business, sell off unwanted inventory, or liquidate an entire store. With offices located in Charleston, South Carolina; New York, New York; and Saskatoon, Canada; the company helps jewelry store owners and chains formulate strategies designed to maximize revenue in times of transition, whether due to retirement, store closing, or simply when needing a boost in sales. For more information, visit www.silvermanconsultants.com or call Bob direct at 800-347-1500.