Another year has nearly come and gone, and once again, Australia’s jewellery retailers find themselves bracing for impact ahead of the holiday sales rush.
It’s the most critical time of year for all retailers and can be a ‘make or break’ scenario for many jewellery business owners. If you think about the traditional ‘cycle’, sales peaked in December leading up to Christmas and other gift-giving traditions.
The New Year’s sales programs then kicked in, usually starting on Boxing Day; however, this cycle has changed significantly over the past five years with the addition of the new US-inspired Black Friday event.
In the US, Black Friday is the first Friday after Thanksgiving. In 2024, it will occur on 29 November.
It’s often said Apple fueled the momentum behind the promotion appearing in Australia by including the local market in its Black Friday campaign in 2013.
With local consumers under lock and key at home during the global pandemic, COVID-19 probably cemented Black Friday even further into the Australian retail landscape.
Some experts have suggested that Black Friday is now a more significant sales event than Boxing Day. Indeed, the Australian Retailers Association (ARA) reported that consumers spent more than $6 billion across four days last year.
If accurate, this accounted for more than 25 per cent of all holiday purchases.
It seems that the traditional ‘cycle’ has changed from November through to January. This is two-edged for retailers. While all three and four-month retail promotions have the potential to increase sales, this increased turnover usually comes at reduced margins.
This is worsened if retailers have become overly reliant on these sales. In recent months, I’ve enjoyed discussing this fascinating subject in depth with several well-informed experts.
It’s been suggested that a heavier weighting towards holiday sales can be a symptom of a retailer failing to generate adequate revenue during the rest of the year.
In other words, those dependent on these gift-giving traditions likely find themselves in this situation because of underperformance during the rest of the year.
As mentioned, the average jeweller once recorded between 18 and 25 per cent of annual sales in December alone. That aside, even for a ‘well-balanced’ jewellery store, December sales are often the difference between a profitable or disappointing year.
As indicated above, with Australian shoppers adopting the Black Friday campaign in increasing numbers, many jewellery stores have shifted a significant portion of their December sales to November.
Reporting from the Australian Bureau of Statistics (ABS) in 2023 suggests that this is not unique to the jewellery trade and that retailers everywhere have experienced a seismic shift.
The jewellery industry is notoriously resistant to change; however, Black Friday sales now appear compulsory.
As with many sales events, experts recommend that retailers strike a balance between shifting ‘dead’ and sluggish stock and introducing new special ranges and promotions.
Interestingly, planning for chain stores reportedly occurs more than a year in advance – a remarkable feat given the significant swings in trends we frequently see among jewellery consumers.
Independent jewellery stores are encouraged to begin planning product selection around August.
Many people doubted these sales would ever ‘take off’ locally for various reasons.
It was an idea easily dismissed given the widespread resistance to the ‘Americanisation’ of culture; however, whether we like it or not, Black Friday and Cyber Monday have cemented a position in the retail calendar.
With this ‘make or break’ scenario firmly established, summoning additional composure is essential.
The stakes are high, and navigating elevated pressure is a skill required in many walks of life.
Get on the front foot!
How can you ensure that your business enjoys a ‘fairy tale finish’ to the year?
One expert I spoke with said marketing and inventory management are crucial.
With consumers continuing to ‘feel the pinch’ of cost of living pressures, displaying more affordable products in store windows and digital promotions can be crucial to improving foot traffic.
It was explained in straightforward terms: When retailing in these kinds of economic conditions, you’ve got to at least get them in the door.
There’s always the chance that a consumer may enter your store because they’re interested in a more affordable product and decide to purchase something on the pricier side.
As mentioned, inventory management should be planned months in advance; however, in the future, it may be helpful to consider this time of year under the new November-January paradigm.
Analysing past sales data can ensure that you’re stocked with popular items. Black Friday sales should be used to move sluggish stock and introduce new seasonal products.
Every chain is only as strong as its weakest link! Manage your employees during this time is critical. Jewellery stores are different from other retail businesses around Christmas and you’re unlikely to face a line of people stretched out the door waiting to be served.
That said, providing additional training around customer expectations and product knowledge is essential to ensure that every question and query is resolved effectively.
Finally, in the weeks ahead, ensure that you’ve got your ‘boots on the ground’ regarding customer feedback. Actively seek and respond to customer feedback to address issues promptly and improve service.
There’s nothing worse than hearing the same complaint from a dozen different customers when you’re under the pump. Insult is added to injury if it’s about an issue that could have been resolved well in advance – if only you’d been told!
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