August’s results for our same store data showed a slight drop in the rolling 12-month results being achieved. Rolling 12-month turnover came in at $1,603,719, down slightly from last month’s figure of $1,604,659. Sales volume for the last 12 months dipped 10 units to 4,375 from 4,385 with average sale achieved slightly up at $367.
Monthly figures show that the typical U.S. store achieved sales of $118,542 for August, down from last year's result of $119,481 with a slight increase in average sale achieved and a small decrease in units sold compared to August last year.
Below is a comparison of how the typical larger and smaller store make up their sales, comparing two periods November 2015 to August 2017. As the numbers show, the trend has been for a decline in silver and watch sales contribution to overall performance while diamonds and gold have shown an increase.
Larger stores (those doing over $1 million sales per year) have shown a strong growth in the contribution from diamond product.
This month we will be focusing in on the gold and silver markets, both of which have undergone extensive change in their contribution to overall sales.
As the above graph shows, total annual sales of gold product has seen a significant upswing in recent months after flatlining for much of the past two years.
Contrast this with the movement in silver which has continued its decline over the last couple of years, although the last three months have shown signs of leveling out. The growth in gold sales and the decline in silver units being sold has contributed to the upturn being experienced in the average retail value of items being sold in the typical store.
So how is your store responding?
Most aspects of retailing tend to be reactive, and particularly when your store data is driving performance it’s easy to respond to historic information rather than be predictive of future growth opportunities. Fortunately we exist in an area of retailing that is less focused on short-term trends (ask anyone in the toy market whether last December's hot sellers will be in vogue this holiday season and the answer is likely to be no). We are able to use data like that seen above to respond to what’s happening and, thanks to the number of stores being studied, to recognize that it is not an isolated trend but reflective of the industry as a whole. Knowing this change is one thing, however; taking action as a result is another.
Now is a good time to review your inventory makeup relative to what is happening. Given this change what percentage of your inventory holding is tied up in gold product versus silver? How much aged inventory are you sitting on that is not only tying up cash flow but is sending the wrong message to your customers about the type of product you have available? A change in the makeup of your sales will result in more slow-selling items sitting around in the lesser-performing area, in this case silver.
Fortunately, the average value of each unit of aged inventory is not likely to be high, but the large number of units often held of silver can give the impression to your customer that you are “all about silver.”
Where is your product displayed? Is silver sitting front and center in your best cabinets? Is gold sitting in a lesser spot to reflect the historic fact that it wasn’t selling as well?
Responding to customer demand is a key component of being an active retailer. Using your data to see trends in products will help you stay ahead of the game and allow you to be responsive to customer demand when they are ready to buy.
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Ron Pierro, owner of Pierro's Jewelers in Brandenton, Florida, chose Wilkerson to run his going out of business sale. From marketing to on-site sale management, Wilkerson did it all--giving Ron the kind of closure that only comes from trusting the best. Wilkerson.
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