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David Brown

Diamonds Power Uptick in Sales

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FOLLOWING A SUBDUED PERIOD of trading in the first few months of 2014, sales have rebounded in recent months with strong growth in both April and May’s trading figures.

Our data collected across all stores has shown an increase of around 1.5 percent for annual sales in each of the last two months, a healthy rise that would translate to over 18 percent per annum growth over a 12-month period.

Monthly Percentage Change in Rolling 12 Months Sales

May’s increase of 1.63 percent comes on the back of a 1.42 percent increase in April, which was the first positive growth since December. May’s improvement also represented the first consecutive monthly growth since March 2013.

Last year was a somewhat lackluster period for growth. The chart above shows most months of 2013 bouncing along below the line after a sustained period of growth through 2010, 2011 and 2012. Now we need the new trend to continue.

The chart below shows the up-and-down nature of the last couple of years:

Following sales of $118,492 in 2012, store sales in the month of May declined 7 percent in 2013 but they have since rebounded to $131,947, a year-on-year increase of 20 percent. Meanwhile, unit sales declined from 769 items to 544 between 2012 and 2013 with a further drop to 550 units for 2014, however, an increase in average sale from $148 to $192 and then $219 over each of the three years has more than made up for the drop in items sold. This increase represents an improvement of 47 percent in average retail sale over the three years.

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So why the sharp increase in average sale? One word – diamonds.

Diamond sales continued to increase even during the slower 2013 year. The graph below shows this trend in more details:

Same-store diamond sales have increased since May 2011 from $450,000 per annum to a level of $800,000 in 2014, an increase of 77 percent in three years! Obviously this represents an average across all our data. Ddon’t fret if you aren’t achieving these numbers, but the important question to ask yourself is what percentage of your sales is coming from diamonds?

Most stores have significantly increased the percentage contribution from diamonds, from a low of under 40 percent during the recession to figures of over 50 percent now. In fact, percentages as high as 54 percent or 55 percent from diamond sales are not unheard of from many clients.

If you’re not achieving these percentages then it’s time to ask why. Three key areas that may be contributing to slow sales are:

1. Is your inventory saleable? When did you last review your diamond selection for old product? Do you have a good mix of price points? If you haven’t checked your inventory recently then it’s time to pull out your old pieces and ask the question “how can we move these on and find more fast sellers?”

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2. Is your staff up to selling the product? Many employees new to the industry during the recession have little experience of diamond sales (particularly if they were hired in the midst of a growing bead market) and may not have been trained in how to sell diamonds. It’s time to invest in some training for these staff members. Make sure they are up to speed and have the necessary knowledge of your diamond product.

3. Are you in the right headspace to sell? It may seem like a funny question but if you’re still functioning in 2009 with the belief that diamond sales are hard to come by then guess what? Diamond sales will be hard to come by! Just recognising that others are achieving well in these areas should be enough stimulation for you to rethink your approach.

If you’re not cashing in on the diamond market or aren’t seeing an increase in your sales at present then it’s time to rethink your strategy and get aboard the bandwagon.

David Brown is the President of The Edge Retail Academy (sister company of The Edge), who provide expert consulting services to help with all facets of your business including inventory management, staffing, sales techniques, financial growth and retirement planning...All custom-tailored to your store’s needs. By utilizing the power of The Edge, we analyze major Key Performance Indicators that point to your store’s current challenges and future opportunities. Edge Pulse is the ideal add-on to the Edge, to better understand critical sales and inventory data to improve business profitability. It benchmarks your store against 1100+ other Edge Users and ensures you stay on top of market trends. 877-569-8657, Ext. 001 or [email protected] or www.EdgeRetailAcademy.com

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