David Brown President of The Edge Retail Academy

Silver Sales Show Decline as Overall Sales Increase Returns

July’s data is fresh off the press and with it a slight increase in store sales year on year. Rolling 12-month sales showed an increase of 0.22% from June which would convert to an increase of 2.64% on an annualized basis. This is the first increase for three months and halts the decline reported on last month. Yes, it’s small, but it’s still a positive turnaround from recent figures.

The most interesting area of change has been silver. From the highs of the last few years, silver has had a decreasing impact on the overall results of most jewelry stores.

As a percentage contributor to overall sales, silver has fallen from accounting for 18 percent of storewide sales in 2010 to just 13 percent in June 2013. (It is worth noting, however, that this is not just due to declining silver unit sales, the rebound in sales of diamond goods, long the dominent product category at U.S. jewelry stores, means other areas are as a result contributing less to overall sales .)

The dropoff in silver sales has been most noticeable in the last few months. The dollar contribution from silver has dropped from an annualised figure of $215,000 per average store to around $165,000 since 2011. Fortunately for most stores, the growth in diamonds has more than compensated but it does reflect a change in demand from the market place, much of which is reflected in a stronger economic outlook encouraging customers to spend more.

Silver has dropped in volume from a high of around 3,500 units per average store to around 2,800. The decline has been even more noticeable for smaller stores, which have seen their annual number of silver units drop from over 2,000 units per annum to around 1,300. This is a fall of nearly one-third and certainly has a major impact on the sales mix for most stores. A decline of over 700 units sold per annum is effectively the workload of one staff member so for most stores there has been a double benefit from the shift in sales mix. There is now increased sales from better end product without the expense of needing so many staff to achieve it.

So where does this leave the typical store? The obvious reaction is to look to reduce the wage bill, however, with December on the horizon a better approach would be to concentrate your existing staff resources into getting ready for the festive season. Here are our tips on how these workers can be better utilized to grow your December sales:

1 Plant the seed this side of the festive season. Most men need to buy a holiday season present. Most men leave it until the last minute … and most men have no idea what they should get. The result? A large number of confused men clogging counter space in the last few days of December. Why not pre-empt things? Come up with a strategy to contact your best male buyers in late November with recommendations on what they should buy. Most men will love the suggestions even if they don’t follow through, and if you plant the seed early you will find many of the “no’s”will still find their way into your store during the least few days. Plan your attack now and get your most confident salesperson on the phone ahead of December to plant the seed and make suggestions for some of these wayward males!

2 Organize your database ready. If you haven’t used your database for a while it’s time for a tidy-up. Any surplus staff time should be devoted to making sure your database is ready to use by late November. Your existing customers are your best source of sales and there is little point in spending thousands of dollars on other media if you’re not using this affordable means of marketing. Get a printout of your top 1,000 or 2,000 customers and check whether all records are complete. Where are the gaps in information? You may be able to get your database “washed” but if there is some manual input required then get someone onto it now. At the very least someone needs to take responsibility to make sure this job gets done even if it is outsourced.

3 Check your best selling lines. Have you got all your best sellers in your cases? Have they been reordered? Do you have the product lined up that will sell well this December? Do you have enough spares ready for December? You don’t need this product in place now but you should know what spares you will need in December and make sure you have them ready to order when December rolls around (ordering them after the 1st December will mean you don’t have to pay until January – and some vendors may be happy to allow returns for any spares that don’t sell. After all, it’s in both your interest and theirs to make sure this product is available when it’s most likely to sell)

A successful December is all about being prepared. Treat your surplus staffing as a benefit not a negative and make sure you don’t let this festive season be the one that got away from you.

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 inquiries@edgeretailacademy.com or Phone toll free (877) 5698657