Average inventory levels, calling customers “sweetie”, and the pros/cons of moving off the beaten path.
[h3]Inventory should be about half of annual sales]/h3]
[dropcap cap=Q.][h4][b]Do you have any data relating to average inventory levels in jewelry stores throughout the United States?[/b][/h4][/dropcap]
[dropcap cap=A.]The figure is around $500,000, says industry analyst Ken Gassman, adding that it’s a fairly easy number to figure because average inventory is usually about half of annual sales. So for the typical U.S. specialty jeweler, which has an average annual turnover of about $1 million, you could expect to see a half million dollars worth of inventory in stock at any given time. “Of course, if annual sales are $2 million, we’d expect to see about $1 million of inventory on their balance sheet (and so on),” says Gassman. You can also see this pattern with the publicly held jewelers such as Zales and Signet, he adds. If your inventory is more than 50 percent of the trailing 12 months sales, you probably need to take action to speed things up.[/dropcap]
[componentheading]PERSONNEL[/componentheading]
[contentheading]Terms of Endearment[/contentheading]
[h4][b]I have a 24-year-old employee who will not stop calling customers of all age “honey,” “sweetie” and “babe.” How should I tackle this?[/b][/h4]
It sounds like you’re dealing with something that is little more than a nervous habit, says retail consultant Kate Peterson. For many people, using terms of endearment is very much the cultural norm — a behavior learned in early childhood that becomes the default behavior in stressful situations. Help her to
overcome the problem with a few simple steps:
— Start by clearly defining the essential standards of professionalism in your business. Include things like appearance (dress code), speech and presentation, training and the customer experience.
— Gather your resources. What kind of training does she need to help her grow to where you need her to be?
— Meet with her and explain clearly that this is not a matter of liking or not liking her speech — it’s a matter of everyone in the store delivering a consistently professional message to the customer.
— Remember to coach daily. Work with her on your sales floor and look for the “coachable moments.” Praise (including praising progress!) and/or reprimand immediately.
Keep in mind that this person may simply not want to work within the boundaries you establish. Be prepared to part as friends if that’s the case, Peterson says.
[componentheading]INTERNET[/componentheading]
[contentheading]Ouchless Opt-out[/contentheading]
[h4][b]What’s the best strategy for dealing with people who unsubscribe to my e-mails?[/b][/h4]
You don’t have too much choice when it comes to honoring opt-out requests but there are things you can do to try to salvage the relationship. One such strategy is to send a farewell message in which you confirm the opt-out but also offer the customer other ways to stay in touch, such as via your snail-mail list (does she still want your catalog?) or with telephone anniversary reminders. Another is to ask the subscriber if she’d prefer to stay on your mailing list but receive fewer e-mails, for example, just your holiday-season bulletins. The best policy, of course, is to work hard on your content so that it’s interesting and relevant to the people who receive it. Then you want to have to worry about opt-outs.
[componentheading]LOCATION[/componentheading]
[contentheading]Destination Demographics[/contentheading]
[h4][b]My husband and I are tired of our big city and have found a store in a small town a couple of hours away. The foot and drive-by traffic are low, but we’re hoping this will be offset by the low rent and retention of some existing customers. What do you think?[/b][/h4]
We think that any time you surrender location you’re taking a big, big risk in retail. Unless you plan to build some sort of destination store (a real one that genuinely differentiates itself in a commercial sense), or the town is renowned for its arts and antiques, you need to carefully analyze the numbers and demographics. It’s unlikely your existing customers will follow you. Think this one over like a bookkeeper, not a disenchanted urbanite.
[componentheading]TRAINING[/componentheading]
[contentheading]Great Expectations[/contentheading]
[h4][b]What sort of results can I expect when I send staff to a sales seminar?[/b][/h4]
David Geller of Jeweler Profit says you need to demand the same results from a consultant or education program as you would from any other aspect of your business. “I see things as black and white,” he says. “Numbers are black and white. If, for example, an ad generated four times its cost ($5,000 generated $20,000), then ask the sales guru to do the same thing.” So, if the course is $1,600, the sales guru needs to create $6,400 in additional sales for the year. Geller says you need to work your own numbers but in most cases, as in the one above, the training pays for itself. “Sometimes, after a while the sales come back down. For that reason I wouldn’t send any sales staff to the course unless the owner goes too! The guru trains the staff … and you. It’s your job to keep it going after the course is over,” he says.
[span class=note]This story is from the July 2008 edition of INSTORE[/span]