If you don’t know where you’re going and where you are now, then it’s hard to know precisely what to adjust.
Did you know that the rear-view mirror was a relatively early addition to the motorcar? The first rear-view mirror is credited to racing driver, Ray Harroun.
He attached a rear-facing mirror to the cowl of his Marmon Wasp before the first running of the Indy 500 in 1911. He won! Engineer Elmer Berger applied for a patent on the hilariously named ‘Cop-Spotter’ door mirror in 1921.
Horse-drawn wagons didn’t bother with a mirror because their speed was relatively sedate.
With a car; however, higher speeds and an enhanced volume of traffic required a significant increase in situational awareness.
Increasingly, the jewellery business is analogous to a modern car in high traffic – we need to be agile, nimble, and adapt to the changing environment.
The best way to see what is happening is to look at daily and monthly sales reports. Once you have the information, you can determine the right actions to get the result you want.
Reports are not the end of the story, however. For any of you who have ever attended Weight Watchers, you’ll know that they ask you to set your own goals.
You decide on the target weight, and you decide on the timeline. They do not tell you what your target should be or how fast you should get there; however, they do measure your progress.
What many jewellers have done is nominate a target which is often ‘variable’, that is, if it’s getting a bit challenging to achieve the original goal, they just move the goalposts.
That is the opposite of best practice. To make it even more challenging, for the first time in three years, the jewellery retail industry is showing signs of a slowdown.
State of play
At Retail Edge, we have already observed that for many businesses the ‘average sale’ has started to plateau.
Last year, we experienced a slower November and December when compared to the prior three years, and we see a similar trend over the past couple of months in mid-2023.
It might not be happening to you - which is great news - but it is happening to the majority of jewellers.
We know that the pressure is on many consumers - you might be aware that 43 per cent of all fixed mortgages are being renewed between June and December 2023.
For the average Australian mortgage holder, that means paying an additional $1,000 more per month. That money must come from somewhere!
Typically, it’s cafés and restaurants that suffer as people drink more coffee at home or at the office and eat out less. The media is full of reports about the cost-of-living crisis.
As times get more challenging, consumers seek out more promotions, and reduced prices and they love (perceived) discounts. With that said, consumers will not stop having birthdays, anniversaries, graduations, celebrations, weddings and events.
They will still celebrate these events with the right jewellery! There is no need to panic, but we do need to have clarity about what we are doing, what we are offering and how we meet consumer needs and wants.
What can you do?
Be clear about what your business goals are. Understand that despite increased economic pressure, the goal doesn’t change.
Once you know your goals, it’s time to design a roadmap. While a goal is static, the roadmap to achieve that goal can be dynamic. It must adapt to changed circumstances.
From there, check that you have the right resources to achieve your goals. Do you have the right stock? Is your marketing campaign designed to suit your goals? Does your staff have the skills required in the current environment?
Finally, implement the strategies you identified in your roadmap. Make use of your sales reports and have an understanding of what’s working and what’s not.
What shouldn’t you do?
Now is not the time to cut your marketing spend! Reducing marketing spend is like having a birthday party at home, buying all the beverages and food, and then not inviting anyone.
It’s been said in business that you “can’t shrink your way to greatness.” Cutting marketing spend in a business leads to reduced traffic and sales, aged stock, stress, and uncertainty.
We see many jewellers decide to reduce a store’s stock by not re-ordering the top sellers. This is clearly flawed, as these are the items that people want!
Finally, don’t reduce your service. I’m sure that many customers come to you for advice that is often crucial when selecting a beloved piece or an item for someone special.
Not having skilled staff ready to help them with that process merely demeans your offer.
Always remember that whether you’re facing a challenging economic environment or trading in a robust market, you should never stray from your goals.
Name: Malcolm Scrymgeour
Business: Retail Edge
Position: Business Advisor
Location: Gold Coast, QLD
Years in the industry: 1
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