David Brown: Monthly Sales — A Flattening Pattern Begins to Emerge
BY DAVID BROWN
With June data fresh in we are able to compare the equivalent period last year to the current result and the rate of increase is still solid with year-on-year figures for the month rising 1.19 percent on May — a rate of annualized growth of just over 14 percent. This represents the 12th straight month of growing monthly sales figures on the equivalent period last year. The question is, can we maintain this rate of growth much longer?
At the midway point of the year it’s a timely period to review how the year has been progressing, and in particular how June data compares to the equivalent period last year…
As the chart illustrates, overall June sales are a healthy 19 percent up on the equivalent month last year showing that the rate of growth doesn’t appear to be slowing. Repairs are also tracking well ahead, as is the quantity of sales (we’ll look further into sales quantities shortly).The average value of each sale has also increased – and in fact it’s the increase in average sale that has had the biggest impact on this growth in sales revenue.
Despite the results for June, the longer-term numbers showing a flattening in the rate of growth for the number of units being sold. This isn’t surprising given the leveling out (and for some people, the decrease) in bead product being sold.
What is helping to solidify the numbers, however, is an increase in the average value of each sale transaction as the graph below illustrates, although this trend is starting to also find its leveling-out point.
The interesting question is whether the rate of growth in average retail will be sufficient to offset any further decline in quantity sold for most stores.
So what action are you taking to rebuild those top-end sales? Are your staff looking to achieve a better average? If your bead sales are slowing you need to generate business from elsewhere. If you are still achieving a good volume of foot traffic then your growth must come from either converting a better percentage of browsers into buyers, or from increasing the average value you achieve with each sale. Increasing the average sale can be improved in a number of ways:
Regular staff training. Staff will make better average sales when they feel confident about the product. When did you last undertake training on your diamond product?
Buy Up. Are you stocking product of a high enough price point to challenge your average sale? The average retail price of your inventory should be 20-30 percent higher than your current average retail sale to give yourself every chance of growing this area. It’s hard to increase the average of your retail sales if you’re putting a glass ceiling on what is possible.
Increase the add-ons. Although this data doesn’t show it (It’s average retail price per item sold) achieving add-ons will still lift the average price per transaction, which is just as important. Make sure you have compatible items displayed together; as tempting as it can be to put all the pendants in one place you need the earrings nearby for that add-on opportunity.
Create the larger sales. The easiest way to increase your average is to make those larger ticket sales. These sales often come from those customers who know and trust you best. Have you got high-end product you know will suit certain customers? Have you ever showed it to them? Now is the time to make those suggestions – invite them in for a special viewing, especially if it is a new piece. You never know what might result.
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