Sally’s Articles in INDESIGN and INSTORE Magazines
One of the key reasons consumers purchase designer product is because they feel that they share an aesthetic with the designer. In other words, they fall in love with a line or product. I know for instance that the likelihood is very high that I can find the shoes I want from Via Spiga, and it keeps me coming back again and again. And, I am willing to pay more knowing that I can save time (precious commodity for most of us), combined with the fact that they have proven to me that it is a quality product that will last. This is a powerful dynamic which can also apply to your store as the brand. Repeat clients are the foundation of your business.
Here is the scenario I often see: We go to a trade show, see a line we love, pick an assortment, put the product in our showcases, and do some marketing. Sales associates are excited and show the line to everyone who walks in the store. Sales are brisk and the line is off to a good start.
There are several reasons that you may be contemplating adding a designer line to your mix.
- To drive traffic into your store through their marketing and advertising
- To enter into a new product category
- To cover a design look and feel that you believe your clients would buy
I am often asked what the key numbers that a jewelry retailer needs to pay attention to effectively manage their inventory. There are a lot of numbers out there – Sales Revenue, Inventory Turn, Margin %, Margin Dollars, Mark up, GMROI, ROI – enough numbers to make your head spin!
Valentine’s Day is one of the top events for most retail jewelers, generating significant revenue. The average sale tends to be lower than Christmas, as the types of alternate gifts most men are contemplating are flowers, chocolates, etc.
What can build your Valentine’s Day volume is Bridal.
Mother’s Day can be a terrific opportunity to generate sales. At one of my prior positions, you would be amazed at the staggering amount of units we sold! This is not an event to approach half-heartedly. To maximize sales, however; you will need to have a great marketing campaign and plenty of the right product.
There is very little that is more important than managing your most valuable asset – your inventory. I will share with you the concepts and strategies that I have successfully implemented to manage my inventory in the past. However, I will not be providing magic formulas new to this industry. Wish I had some!
We buyers have no problem buying beautiful jewelry. Between the creativity, the appreciation of great design, and the thrill of the hunt, it is an exciting task! But, before you start purchasing, the left brain needs to kick in and you need to dive into reports to build a foundation for your Buy Plan.
If you have a surplus of aged inventory (and most retailers do) recognize that you did not acquire this problem in one day and it won’t get solved in one day. One thing is clear, you will not have enough dollars for new purchasing and replenishment unless you get rid of old inventory!
It is time to look to the future and begin focusing on growing revenue and pursuing opportunities. To do so, you will want to step back from your normal inventory activities (like re-ordering top seller, and doing markdowns) to really think how you would expand your client base through merchandising. If you were to magically sell every SKU in your store tomorrow what would you replace them with?
As we discussed last month, your Merchandising Strategy defines your company’s future plan in terms of what you want your assortments to be, regardless of what you currently have in stock. The Merchandise Plan articulates your desired outcome by product groups – revenue, gross profit percentage.
I would like to start this article with a quote from “Why She Buys” by Bridget Brennan – “Female culture should be studied with the same focus that entering a foreign market requires. Mastering female culture is the key to success for companies that depend on women consumers.”
When I start working with a client one of the first things I do is look at their website. I am hoping to get a feel for the range of products, what lines / designers they carry, what their store looks like, what services they provide and their company philosophy.
The jewelry business is very different from other types of retailing. For instance, the department store business is driven by nationally branded merchandise. Conversely, in jewelry there are just a handful of nationally recognized jewelry brands, if you exclude watches.
My last couple of articles have dealt more with the science part of merchandising. Certainly the mechanical aspect of buying and inventory management is critical to the success of your business. Whether you are engaging in new purchasing, replenishment, or aged inventory management, there is a detailed, rigorous aspect to it.
Purchasing new product should always be approached with considerable evaluation, a dose of analytics, and some vision and passion. Most buyers don’t have a problem with the passion part! While working a show, you will usually see more fun and compelling product than you have dollars for. It is crucial to step back from the great things you discover and make sure that the product will achieve the results you want.
It would be wonderful if there was a button you could press and your Open to Buy is magically generated. It is unfortunately a rather complex process – only because so many elements go into an accurate calculation.