Diamond jewellery is one of the few product categories that jewellers have to themselves so it makes good business sense to focus on the diamond ‘department’ within your store and monitor it closely.
As a general benchmark for independent jewellery stores, I recommend the first goal should be for diamond sales to represent at least 30 per cent of total sales. Mind you I regularly see stores that achieve better than this so if yours is one such store, you should aim for 40 per cent.
Jewellers effectively have a monopoly on selling diamond jewellery – lots of retailers sell non-precious jewellery these days but only jewellers are selling high-end diamond jewellery. Whatever your current level is, you need to be aiming higher.
Total sales for the diamond department in your store should include, diamond and anniversary rings, pendants, diamond set bracelets, earrings, loose stones and semi-mounts.
How does the percentage of your diamond sales compare to your group average and the 30 per cent benchmark? More importantly, what can you do to lift your percentage?
Competitive benchmarking
If you don’t currently receive my industry-wide KPI reports, which allow you to compare your store to the industry standard, then you can complete this exercise by comparing yourself with some of your fellow jewellers. For example, have you spoken to others about their diamond departments? What are they currently achieving in average sales? What about their mark-ups?
There is no better proof that something can be done than to see others doing it. Too often many retailers believe something isn’t possible without fully testing the market.
If someone else is achieving a particular result then you can too. Don’t ask if you can do it but ask how you can do it. There are few questions more powerful than those that start with the word ‘how’.
Firstly look at the diamond ring department. How does your percentage of total sales compare to your group average?
Repeat this exercise for each of the other products that make up the overall diamond department. What you are trying to ascertain in this exercise is whether there is any one product category that measures up. If so, then that category provides a foundation that can be used to boost other categories accordingly.
Your numbers are a reflection of what is going on in your store. Behind every number is a story and a reason as to why it is happening. Understand the ‘why’ behind your figures and you will uncover the answers to improving your results.
Simple fix
Of course, some of your problems could stem from easily-fixed areas such as stock appearance and presentation. If diamond sales are an integral part of your business then step outside your store and take a look at your windows. Does your store look like you sell diamond jewellery?
If it is not obvious then that’s the first issue you need to address – if you can’t attract passing traffic then it will take longer to change the results.
If diamond jewellery is in your front window, assess whether the lighting is up to standard. Are the diamond items displayed as special pieces or are they grouped in large clusters? Can the public see the retail prices? Is the stock clean? Are the displayed items current designs?
Always remember that selling diamonds is about the ‘sizzle’. Dirty diamonds don’t go anywhere and neither do items with messy displays or dog-eared price tags – they just sit there.
Looking further inward, when did you last talk to your staff about how to sell diamonds? Are they adequately trained to sell them? Diamonds are one of the hardest product lines to sell because, let’s face it, nobody needs a diamond; it is very much
a desire.
The value of a diamond is also often intangible. It’s an emotional item and this needs to be reflected in the selling process. Are your staff equipped for this?
These are just a few things that probably need to be done early in the process of change. Putting better or new stock in won’t have the impact you expect without addressing some of these issues – just like a set of new tyres on the car won’t make you a better driver.
Unfortunately most jewellers assume their product is the issue and spend money buying in new diamonds when this may not necessarily be the problem. Some simple changes to your store and your staff training may be the key to unlocking the value of this most important area.