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Ask INSTORE: September 2007

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Exactly why “Can I help you?” is so bad, industry “shrinkage” rates, when customers turn down custom designs, and more.

[h3]What’s Wrong With This?[/h3]

[dropcap cap=Q.][h4][b]At a presentation in Vegas I heard Kate Peterson say with a rather incredulous tone that she’d visited stores and been greeted with: “Can I help you?” Errm, what exactly is wrong with “Can I help you?”[/b][/h4][/dropcap]

[dropcap cap=A]Of course, we knew the answer, but thought it best to ask Kate. Here’s her response: “First and foremost is that when you sound like a salesperson, you are treated like a salesperson. And the most instinctive thing we say to every salesperson is ‘just looking.’ As a greeting, there’s nothing at all personal or interesting about it. If a neighbor knocked on your front door, would you open it and say, ‘Can I help you?’ Speak to me like I’m a person, not a credit card number. In every case, a warm smile and direct eye contact are essential. The best greetings are the most sincere and personal. These are the most disarming and the most likely to get the customer’s attention and let them know that they are about to have a unique and special experience. Something as simple as ‘Hello, Welcome to XYZ’ can be very effective. Recently, I visited a candy store where a cheerful man who obviously enjoyed his job greeted me. He started with ‘Welcome!’ with a big smile on his face. As he got a little closer to me, he spied my hand and said, ‘Young lady, does your grandma know you’re walking around with her favorite crystal doorknob on your hand?’ Unorthodox but highly effective. He made me relax, let me know he’d noticed something about me and made me feel like a person instead of a ‘customer.’ “[/dropcap]

[componentheading]INVENTORY[/componentheading]

[h4][b]Although we have a freestanding store in the better end of town, with upper-class clients and a dedicated staff that has been with us for many years, we are still concerned about the amount of inventory that goes missing every year. What is the industry standard for loss written off each year, especially with regard to independents?[/b][/h4]

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We asked the INSTORE Brain Squad how they fared in this matter and the most common response was “less than 0.5 percent” (see page 18), which seems to match existing industry data. Getting accurate information about this issue, however, is difficult because many jewelers are reluctant to divulge information about shrinkage at their stores, says Bob Frank, vice president of the Jewelers Security Alliance. “I can tell you that there are large chains which indicate shrinkage of less than 1 percent while others, not many that I know of, may go as high as 3 percent,” he says, adding that the JSA doesn’t break down figures for chains and independents. “I believe it is an accepted fact by most of the security directors I know, from other industries as well, that as much as 60 percent of shrinkage can be attributed to employee theft,” he says, adding that “if your reader is trying to determine how much shrinkage is acceptable, the answer is none.”

[componentheading]MARKET RESEARCH[/componentheading]

[h4][b]I am trying to plan an event for newly engaged couples to promote wedding bands in our Ohio store. I would like to do a mass mailing, however I’m running into problems finding a mailing list. Do you have any advice on where to find good ones?[/b][/h4]

As you may have well discovered, an Internet search will turn up thousands of companies offering lists, with everything from gift buyers in Switzerland to jewelry buyers who take regular Caribbean cruises — everything that is except the few thousand prospective jewelry buyers you’re looking for in your neighborhood. A better strategy is to find a good broker who knows your local market well. Try Google again but this time type “mailing list” + broker + Ohio into the search field and see what comes up. A good broker should be able to find you the right, up-to-date list, so you’re reaching real prospects and not 75-year-olds about to celebrate their 50th wedding anniversary.

[componentheading]SALES[/componentheading]

[h4][b]We’re planning a big sale to clear some inventory. Any tips?[/b][/h4]

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When it comes to sales, price matters, says Bob Nelson, president of Power Retailing and author of 1001 Ways To Reward Employees. So be prepared to discount aggressively, especially on anything that’s been hanging around close to a year (and go easy on your newer fast movers). Use a similarly aggressive approach to your advertising. At the very least do a mailer of your entire customer list. (Give your old customers a chance to re-acquaint themselves). Direct-mail and newspaper ads should mention the type of sale, starting date, categories offered and markdown percentages. Radio and cable ads are good ways to ramp up the “Act Now” urgency.

Finally, make sure you’ve got big signage in the store. Once the sale begins, Nelson advises you keep an eye out for slow-moving categories. Change the displays and take even bigger markdowns if there seems to be little interest in a particular product. Don’t make customers play the stupid retail game “find the price” and the sales tag. Throughout the sale it is important that customers do not think the best items have already been sold.

Display fixtures must always appear to be as full as possible. If you need to buy additional merchandise for the sale, keep this in mind: The first few days will have the largest customer impact. Nelson’s last piece of advice: While still in-season, off-price merchandise can be in high demand. “Don’t expect your suppliers to volunteer it; you’ll have to ask what they have. If you drop the hint that you have an open-to-buy for immediate goods, you will probably discover some desirable merchandise,” he says.

[componentheading]CUSTOM DESIGN[/componentheading]

[h4][b]We do custom jewelry and quite often use the customer’s diamonds and gems. We always have the customer come in and approve the wax before we cast it. But what do you do if, having cast and set the job, the customer says she doesn’t want it?[/b][/h4]

If the customer has signed off on every step and you’ve given her a thorough explanation and shown her the CAD photos from various angles, there should be no room for argument, says Jennifer McFadden, who runs a custom design studio in Red Bank, NJ. “It’s hard for the customer to say it’s anything but they changed their mind,” she says. If they accept that is the case then McFadden suggests you credit the gold for the first design, but charge the customer for any expenses, like a second wax or additional gold.

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“I sometimes charge to set the stone for the second time — it depends on how the customer behaves. If worse comes to worse, you can cut the stones out and return them to the customer and refund the gold value, but I wouldn’t refund any of the labor or tradework expenses,” she says. To prevent such a situation occurring, communication from both sides is key to make sure expectations are understood. A good tip is to try to build a sense of anticipation ahead of the completion of the design through the way you speak about it. Unveil the piece with a little fanfare and excitement. The positive environment helps build desire and lessens the chance of doubt overwhelming the customer.

[span class=note]This story is from the September 2007 edition of INSTORE[/span]

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