THESE HAVE BEEN tough times for many US jewelry-store owners and there have been moments over the last nine months when it felt like sales were dropping like a lead balloon. The trend over the last few months, however, has become one of consolidation, where sales, if not returning to their earlier levels, have at least appeared to be holding steady without a further deterioration.
Let’s look at US store average sales for the last 15 months:
As we have commented previously, the serious drop in sales began in October and rapidly accelerated in November and December. Further falls continued until February. In April there were tentative signs on an upswing, which quickly disappeared again in May. However following the collation of June data it now appears that we have had a sustained period of “bottoming” for the last four months. Given the length and shape of this graph it would seem unlikely that any further falls will be forthcoming — barring more bad economic news.
As we have also commented previously much of the decline has not come from a drop in transactions but more from a reduction in the amount that customers are spending on these transactions and when you think about this it makes sense. Important anniversaries, birthdays and Christmas will still roll around whether there is a recession or not and most people won’t cite economic hardship as a reason not to provide a gift – they’ll just spend a little less than they normally would and this is what we are now seeing happen.
Although storewide sales have leveled off, the average sale has continued to decline. The graph above shows the declining 12 month average sale, which has been impacted by the more erratic monthly figures in red. This decline has yet to settle and reflects a double impact — the decline in average spend generally and the increasing popularity of bead product, which has served to increase the number of transactions most jewelry stores are seeing.
- So where does this leave your store? The first question for any jeweler is to make sure you have enough of the right product. Do you have bead product in-store? If so are you promoting it and making sure your customers know where to find it? Is it being promoted in your window and near your high foot-traffic areas? Are you reordering it regularly when it sells?
- Every cloud has a silver lining and the upside of this one is the new customers you stand to make. Yes, they are spending less now but when the economy improves and they feel a little more flush, they will spend more – and thanks to this new product you are now being exposed to dozens of customers you hadn’t seen previously.
- The secret now is to turn them into customers for life.
This story is from the September 2009 edition of INSTORE.