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Jewelers See Unit Sales Decline — Here’s a Way to Fix the Problem

It’s the seventh straight month of declining monthly sales data.

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Jewelers See Unit Sales Decline — Here’s a Way to Fix the Problem

August sales data showed a small drop in our rolling 12-month sales results of 0.08 percent compared to July, converting to an annualized decline of 9.6 percent should the trend line continue.

August’s monthly sales figure of $117,275 across our store average comparison data is down from August 2017’s total of $118,542. This is reflected in a drop in unit sales from 276 units in August last year to 261 units sold this year. Average sale showed an increase from $382 last year for the month of August to $384 this year. Gross profit of $52,710 was down from August 2017’s monthly result of $53,612, a reduction of $902, or 1.6 percent.

This is the seventh straight month of declining monthly sales data, a sequence we have not seen since the Great Recession. Since January this year, sales have dropped from an average annualized sales figure of $1,629,755 per store to $1,588,204. This is a decline of 2.5 percent, or approximately $41,000 so far this year.

It might not sound like much but for an average business doing keystone (and we can now see that most businesses are not achieving keystone), that represents $21,000 off the bottom-line profit after paying for the inventory sold.

Jewelers See Unit Sales Decline — Here’s a Way to Fix the Problem

Looking at the last three years of data, margin has maintained its level of 45 percent with average retail sale making small increases from $375 to $384 (2.4 percent) while unit sales dropped from 286 to 261 units (a decline of 8.7 percent over the three-year period). Monthly figures represent an isolated snapshot, but the overall trend is continuing.Unit sales are no longer decreasing as quickly as they have, and average retail sale achieved is no longer climbing as quickly as it was, however the rate of decline in units sold continues to outpace the offsetting increase in average retail sale achieved. This has resuled in a drop in August sales figures in the last two years from $119,481 to $117,275, a drop of 1.8 percent. Although the speed of change has slowed, its consistency in trending downward appears to have become a greater concern.

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Let’s look at unit sales from a longer term perspective. In August 2014 the average store was making unit sales of 5,391 items per year. Fast forward to August 2018 and that total has declined to 3,970 items.

That’s a drop in just four years of 1,421 items, or 26 percent of items sold. As most of you know, “sales” equals the number of units sold times the average selling price. That’s a big increase required in average retail selling price in order to compensate for this drop.

How do your numbers compare? Take a look at your total annual units sold from four years ago and compare that number to now. Has it declined? If so, how much? What about your average retail sale achieved? Has it increased? If so, how much? Has it been enough to compensate for this drop in units sold?

Sooner or later, the decline in unit sales must be addressed.

Increasing unit sales can start with one simple strategy that, once executed consistently, can be supplemented by others. My recommendation is to look for the add-on sale. The easiest customer to sell to is not the one who is at home looking at your marketing material, nor is it the one who is browsing in your store. It’s the one who has just bought from you – yet these are the customers we neglect to sell to because the “job is already done.”

You don’t need more customers to make more unit sales – just do more with the ones you have already won over.

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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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SPONSORED VIDEO

Wilkerson Testimonials | Zadok Master Jewelers

Stick to the Program — And Watch Your Sales Grow

When Zadok Master Jewelers in Houston, Texas, decided to move to a new location (they’d been in the same one for the 45 years they’d been in business), they called Wilkerson to run a moving sale. The results, says seventh-generation jeweler Jonathan Zadok, were “off the charts” in terms of traffic and sales. Why? They took Wilkerson’s advice and stuck to the company’s marketing program, which included sign twirlers — something Jonathan Zadok had never used before. He says a number of very wealthy customers came in because of them. “They said, ‘I loved your sign twirlers and here’s my credit card for $20,000.’ There’s no way we could have done that on our own,” says Zadok. “Without Wilkerson, the sale never, ever would have come close to what it did.”

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