Our data for the month of October continued to show strong same-store sales growth at the stores in our survey group. As the chart below reveals, average monthly sales of $121,717 per store represented a nice increase of 14 percent from $106,557 for the same month in 2014. Looking back further, overall same-store October sales are 33 percent higher than they were in 2013.
Unit sales have increased strongly, up 45 percent over the two-year period, from 286 units to 416 units sold. Average sale has slipped slightly from $298 to $277, although margins have largely been maintained, meaning overall gross profit has increased from $43,318 to $55,666 – an increase of $12,348, or 28 percent, over the two-year period.
Within the data set, smaller stores doing less than $1 million in annual sales continue to show lower unit sales and an average dollar sale ($200 versus $353) but maintain a much healthier margin (52 percent versus 44 percent) compared to larger stores.
This would tend to suggest that smaller stores receive a lower percentage of their sales from diamonds but in fact the percentage contribution from diamonds to overall sales is slightly higher at smaller stores than at their larger peers. (We’ll delve into these numbers in more detail in a future article.)
This month we will look at silver, which is a bigger contributor to smaller stores’ figures (15.8 percent) than for larger stores (10.7 percent).
As the chart shows, after an initial period of growth in silver throughout 2009 and 2010, silver has largely maintained its sales volume despite a resurgence in diamond product sales over the last couple of years. There have been some momentary dips and increases but the average store is generating sales of between 2,700 and 3,300 units of silver per year. That averages out at 7 to 10 units per day for a 7-day week, and at an average unit price of around $67, contributes between $500 and $600 of daily sales.
This may not be significant depending on how your store performs and is certainly more important to a store doing less than $1 million in annual sales than one that is doing more.
Sometimes, however, it can be about more than the immediate sale.
One of the most interesting changes in marketing in recent years, which has been driven by the Internet, is the cost of acquiring customers. Most online businesses now measure the cost of customer acquisition – and are willing to spend a significant sum of money depending on the value their customer is worth to them. Most simple email capture campaigns are budgeting on $1 or more per customer email address. This would have been unheard of in terms of gathering physical mailing addresses in earlier times but shows the value in establishing a customer relationship. Many online businesses will even send physical products to their customers for nothing more than the cost of postage in the interests of establishing a rapport.
So where does silver fit into your store mix? You might not see it as a significant driver of sales, but does it have a roll to play in building your customer list? Have you had customers in the past who may have started with purchasing silver but gone on to bigger and better things? Could today’s silver customer be tomorrow’s white gold or diamond wearer?
It’s worth investigating the role of silver in your business. If it’s a moneymaker for you then you don’t want to kill the golden goose but if you see it as a peripheral player – or worse, an annoyance that gets in the road, then maybe it’s time for a rethink. Could silver be used as a means of generating new customers – graduating them to bigger sales over time?
Only you will know the answer depending on how your business is set up, but one thing seems sure – there are a lot of people willing to continue buying it.
This article originally appeared in the January 2016 edition of INSTORE.
Latest Know How Stories
- His Big Exception to His Store's Return Policy Was a Big Mistake
- Does Your Business Need a Diet Plan for the New Year?
- Consumers Mainly Consider These 2 Factors When Buying Gems
- 21 of Jewelry Retailers' Biggest Fears and How to Forget Them for Good
- Real Deal: A Troubled Veteran's Assault Rifle Purchase Leaves Her Boss Worried and Confused