David Brown: Growth Continues In February, Driven by Higher Tickets
BY DAVID BROWN
Published in the May 2012 issue
Average store monthly sales for February came in at $103,425, an increase of nearly 15 per cent on the same period in the year before.
Repairs were a strong contributor with a 20 per cent increase on the equivalent period. Sales revenue excluding repairs showed a gain in average retail price achieved of $19, or just over 10 percent, showing that a good reason for the overall sales boost came from higher ticket sales rather than just an increase in units sold. Even so, quantities of sales were still strong, up 5.5 per cent over last year’s figures, with an increase in units sold from 615 to 649 pieces.
Even margin was better at 52 per cent against 51 per cent – the result of which was a better profit figure overall. Gross profit of $53,399 was up 16 per cent on February 2011. February overall contributed 9 percent to the average store’s annual sales figures, up from an 8 per cent contribution in 2011.
This figure may not sound significant but it takes a rather large change to increase the percentage contributed to annual sales by just one month. Considering total sales have been increasing and most months have had better sales than their equivalent period last year, then it becomes more difficult for an individual month to significantly increase its impact on total sales when all other months are rising too. It’s a little like setting a new personal record, it’s pleasing to achieve but you know you’ve just made it difficult to beat yourself next time!
As the chart shows, however, February didn’t set a record for annual growth improvement on the previous month. At just on 1.1 per cent, the annual improvement over the previous month means the result was positive, but not as significant as the growth rate at over 2 per cent experienced between November and December last year.
Given the improvement in average sale it might be simple to assume that diamonds saw good growth in February – perhaps on the back of Valentine’s Day, but interestingly diamond sales showed no significant annual growth between January and February, indicating that February diamond sales were on a par with last year’s.
That would tend to indicate that it was more about retailers getting a better dollar value from each sale rather than customers spending on big ticket items – a good sign that consumers are feeling more confident about spending more – and that sales staff are feeling more confident about showing better value product.
You can’t overestimate the impact an effective salesperson can have on a consumer’s buying decision, particularly if they have strong rapport-building skills or an existing relationship with the customers.
Must people are open to influence, particularly from peers they know and trust, but also from those they meet who they feel have authority and sincerity. It’s important to make your staff aware of this impact:
1Ensure your staff are aware of the influence they can have on a customer. Often aged inventory becomes old, not because the customer is tired of it, but because the staff member stops showing it.
2Have your staff show one item at a time. It is difficult to influence a buying decision when a customer has several items in front of them but if the staff member listens to the customer’s needs and then responds with “I think I may have the item that you’re looking for” the customer is more likely to reach a decision on one item than several.
3Practice role playing. Have your staff work through a scenario where they have to influence a customer. Choose several aged items and get them to give you some positive qualities about each piece.
About the Author: David Brown is President of the Edge Retail Academy, an organization devoted to the ongoing measurement and growth of jewelry store performance and profitability. For further information about the Academy’s management mentoring and industry benchmarking reports contact Carol Druan at carol@edgeretailacademy.com or Phone toll free (877) 5698657 Edge Retail Academy, 1983 Oliver Springs Street Henderson NV 89052-8502, USA
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