THE UPWARD TREND in rolling 12-month sales continued in October with overall results showing that most jewelers are moving away from the worst of the economic slowdown and continuing to return to better trading conditions.
Interestingly, as the chart below shows, October was a quieter month than September, in terms of volume of sales units, but performed considerably better in terms of the average retail value being achieved with each sale:
| MTD Comparison | Oct-11 | Sep-11 |
| Gross Sales $ | $83,412 | $90,524 |
| Repair & Service Sales | $14,232 | $15,341 |
| Avg. Sale Value (excl. repairs) | 491 | 590 |
| Avg. Sale Value (incl. repairs) | $247 | $204 |
| Margin | 51% | 52% |
| Overall Gross Profit $ | $42,372 | $46,070 |
| Percentage of Annual Sales | 7% | 8% |
Although on the surface this appears to indicate a quietening in activity, when compared with October 2010 sales of $71,017, it’s clear to see that year-on-year, results have improved by an average of around 17 percent, which is a good rebound by anybody’s standards.
Year-to-date sales have improved from the rolling total at the end of September of $1,131,490 to now be at $1,143,885, an improvement of over 1 percent in just one month; if this continues it will provide growth over a year of around 13 percent.
When compared to October 2010, the volume of sales achieved was very similar, but it is the strong increase in the average retail value that has made the biggest difference when comparing October with the same month last year.
Diamonds jewelry continues to lead the way with a sharp improvement in the average retail ticket.
Since we last focused on these numbers, the average retail value achieved from diamonds has increased from around $1500 to nearly $1600, an improvement of just over 6 percent. The beauty of this is that it then allows a store to improve its total diamond sales by over 6 percent without having to sell a single extra diamond.
This approach is considerably easier than seeking an increase in units sold – after all to sell more diamond rings you normally need more customers – and the hardest part, as we all know, is getting them interested in buying in the first place.
But to persuade a warm prospect to spend $1600 rather than $1500 is a much easier proposition – you have already convinced them of the benefits of what you can offer, so it no longer becomes an issue of whether they will spend, but what they will spend, and this is 80 percent of the buyer’s resistance dealt with.
Six percent may not seem like a large increase – but then a $100 sale is not to be sneezed at. Given the average store achieves an average retail sale value of around $140, then it’s almost the equivalent of picking up an extra customer sale; and as we’ve shown it’s a lot easier to get an extra $100 out of an existing customer than $100 out of a new one.
So if you’re not currently seeing an increase in the average retail value of the diamonds you are selling then what action can you take to improve this?
- Look at the average retail value of your diamond inventory. If you’re not currently carrying an average value on hand that is at least 20 percent higher than the average retail value you are aiming for, then the chances are that you don’t have product of a high enough value to achieve your target. You’re trying to drive 300 yards with a 9 iron. You need the right equipment to get the job done and this may mean a higher value selection of diamonds
- Talk to your staff about what they are showing. You may have the right product but if your average diamond retail price is $1200 it could be because your staff keep showing the $1200 items – and if you start low it’s hard to get them up! Some role playing here will help. If you have particular items that are promoted, or your staff tend to show a lot, then look for an appropriate item that can be used as an upsell.
Watch the discounting. You may have the $1,600 item, and your staff keep showing it, but if you let it walk out the door for $1,350 then your average sale will reflect that. Remember 50 percent of people will accept an answer of no to the first request for a discount – and the other 50 percent will give you a second chance to change your mind! Don’t give in easily at the first request, especially if it’s a good selling item that’s worth the money