With diamond jewelry being one of the few unique product areas that jewelry retail has to itself, it makes good business sense that a reasonable amount of time and attention should be devoted to this. Hence the Diamond Drilldown we will be concentrating on in the lead up to December. If diamonds are not a significant part of your sales then it’s time to ask why.
As a benchmark we recommend the first goal should be to have Diamond Departments Totals of at least 45% of your Total Sales on the KPI (key performance indicator) report. There are already some stores that are achieving better than this, so their target should be 50%. Whatever your current level you always need to be aiming higher.
The Diamond Departments Totals include, diamond rings, diamond anniversary, diamond pendants, diamond set bracelets, diamond earrings, loose diamonds and semi mounts.
How does your percentage compare to (a) your group average? (b) the 45% benchmark?
How can you lift your percentage?
If you don’t currently receive our KPI reports which allow you to compare yourself to the industry standard then you can complete this exercise by comparing yourself with some of your fellow jewelers. Have you spoken to others about their diamond departments? What are they currently achieving in average sale? What about mark up? There is no better proof that something can be done than to see others doing it. Too often many retailers believe something isn’t possible without fully testing the market. If someone else is achieving a particular result then you can too. Don’t ask if you can do it, but how you can do it. There are few questions more powerful than those which start with the word How!
First look at the diamond ring department. How does your percentage of total sales compare to your group average? Repeat this exercise for each of the departments that make up the overall Diamond Departments. What you are looking for in this is, do you measure up to some/any of these? If so then you have some foundation to build on and apply what has worked to the other Diamond Departments. Your numbers are a reflection of what is going on in your store. Every number has a story behind it and a reason as to why it is happening. Understand the why behind your figures and you will uncover the step forward to improving your results.
If not, step outside your store and have a look at your windows. Does your store look like you sell diamond jewelry? If you can’t attract passing traffic then it will take longer to change the results. Is the lighting good? Are the diamond items displayed as special pieces rather than in large pads? Can the public see retail prices? Is the inventory clean and are they current designs? Remember selling diamonds is all about the sizzle. Dirty diamonds don’t go anywhere! Neither do items with messy displays or dog eared price tags.
When did you last talk to your staff about how to sell diamonds? Are they adequately equipped to sell them? Diamonds are one of the hardest product lines to sell – let’s face it nobody needs a diamond, it is very much a want. The value of diamonds are often intangible and emotional and this needs to be reflected in the selling process. Is your staff equipped for this?
These are just a few things that probably need to be done early in the process of change. Putting better or new inventory in won’t have the impact you expect without addressing some of these issues, just like a set of new tires on the car won’t make you a better driver. Unfortunately most jewelers assume their product is the issue and spend a lot of money on buying in new diamonds when it may not necessarily be the problem. Some simple changes to your store and your staff training may be the key to unlocking the value of this most important area. Feel free to talk to us about your diamond business if you feel you need some specific assistance with this.