Michael Lebowiz: Risk-Free Holiday Spice
A strategic memo strategy can fill holes
and add interest during the peak season.
Published in the May 2014 issue
Memo can greatly help the bottom line — so long as the jeweler takes a strategic approach. That means promoting and selling through a good percentage of the memo goods, and it means accepting only product that fits your business strategy. Smart operators work with vendors on styles, metal color, diamond quality, price points and more. Some even experiment with new categories and price points. With all the competition today, the onus is on jewelers to prove their stores aren’t just open to buy — they’re open to sell as well.
Memo merchandise can be particularly appealing when the trade-show season winds down — along with the buying budget. But while consignment strategies are a tried-and-true part of the business, does this mean those strategies should go unchanged in the face of the remarkable shifts that have occurred in the U.S. economy? By rethinking how to leverage vendors’ resources and the power of savvy promotions, you can do much more to parlay your open-to-buy dollars into a more customer-centric atmosphere in your store.
Start with methodology. Some stores simply make it through the selling season, exhaust their buying budgets and then hope for the best. It’s wiser, of course, to base your approach on data. Run reports and analyze the results of last year’s holiday season or this year’s sales to date, and then filter those reports by category and price point to get a clear picture of how your inventory performed. By entering pending purchase orders within those product categories, you can gain more insight into holes that need to be filled or areas in which the store could be more dominant.
That said, many jewelers fail to take the next logical step: to step back and ask, “What vendors would I call if I were to order memo merchandise in these under-represented category groups?” At this point, it is imperative that you find a strategic partner that offers the right styles, prices and categories.
A word on promotions: When you approach your supplier with a solid promotional plan for the memo merchandise, this shows your understanding that consignment programs can boost traffic, drive sales and cement customer loyalty. It is a far cry from an approach in which consignment inventory is relegated to second-class status.
Of course, none of this is possible unless more vendors actually behave as strategic partners. As they bring merchandise to the market, vendors should do more to meet the individual needs of the jewelers they serve and to persuade those jewelers of the benefits of running strong, savvy promotional campaigns.
The promotion campaign should be fun for shoppers and helpful for store associates. These days, the average shopper is distracted, harried and value-oriented, so simple promotions are often best. Some stores display memo items with red-plaid bows, candy canes or mini stockings. This draws eyeballs to pieces the store might not normally carry, and certainly not at such good prices.
Across the U.S., chains have learned to fill their stores with a broader array of price points and a more diverse inventory. Implicit here is the recognition that consumers now demand choice, value and the added interest created by higher turns. A jewelry store with a narrow merchandise range feels stagnant in this faster-pace environment. But by leveraging the off-the-balance-sheet flexibility created by memo arrangements, jewelers can spice up their stores at low cost — and zero risk.
Michael Lebowitz is director of jewelry for White Pine Jewelry Solutions, the consulting arm of White Pine Trading, LLC, one of the world’s largest recycled diamond firms. Reach him at mlebowitz@whitepinediamonds.com or (646) 758-0265.