When my kids were growing up, one of my favourite stories to tell them was The Tortoise and the Hare.
Everyone is familiar with the story enough to know the moral – slow and steady will ultimately win the day over faster and more glamorous alternatives.
For many store owners, the tortoise part of their business is repairs. Repairs typically have a low average sale, are time-consuming, and lead to the highest number of complaints.
There are also all those returns where the repaired item mysteriously ‘broke’ shortly after completion.
Undoubtedly, diamonds are and should be a big part of your business. As I often like to emphasise, diamonds can take as little as 2 per cent of the staff’s selling time and still contribute 50 per cent of a store’s revenue.
Diamond sales are important and should be encouraged at every opportunity; however, the slow and steady business of repairs is also crucial to stores.
Repairs represent an important but often neglected service in jewellery stores. Are you taking advantage of the benefits that repairs can offer you? The main advantages that repairs have to offer are clear.
Driving foot traffic: This is true, particularly during those quiet times. The opportunity to sell to customers already in the store is sorely neglected by far too many retailers.
A customer standing in front of the register is the most effective marketing opportunity any business will ever have, regardless of why they came in.
Building databases: An easy way to create a customer database is through repairs. Many store owners still say they don’t have a database, yet a quick view of their storage area will show hundreds of repair books.
These books contain the names, addresses, and phone numbers of every repair they have done in the past 20 years. This is gold and needs to be treated as such; a database is invaluable for sales and a marketable commodity when it comes time to sell the business.
Encouraging sales: They offer a chance to show other products to customers already in the store.
Ensure all staff are trained to show products to customers who have come in to drop off or collect a repair.
A simple product introduction, for example, “Look what’s just arrived. Don’t you just love it?” is a positive step in the right direction.
Boosting profit: Repairs represent profitable sales without the need to offer any discounting. The beauty of repairs is that they’re almost immune to competition.
Consumers will happily shop around before buying a diamond ring; however, are far less likely to shop around when resizing a ring. Even more extensive repairs can be immune to price shopping by customers, often even the same customers who will argue a product item down to the last $10.
Bringing strong margins: Profitable margins go hand in hand with low-discount pricing policies.
Repairs also offer retailers some of the highest-margin opportunities in the store, making them a great way to boost overall business profitability.
Keeping staff busy: Repairs can act as wage absorbers. Staff can have downtime, and there is only so much product to clean.
Repairs can offer an effective way of covering wage costs thanks to their ability to keep staff occupied in profitable endeavours.
Cleaning products does provide an intangible benefit; however, it doesn’t often lead to sales. Taking in repairs opens up selling opportunities for otherwise unoccupied staff.
Get together with fellow retailers and compare your repair statistics. How many repair customers do you each have per year? Every customer often represents two visits: the first to drop off an item and the second to pick it up.
How are you getting your products in front of these customers each time they enter the store?
Also, compare repair markups. How do they compare? As stated previously, consumers generally don’t shop around and rarely ask for discounts in this area.
A tiny 10 per cent markup increase can add $450 to the bottom line for every $10,000 in repairs.
Assess current rates against those offered by other jewellers to see if your repairs division can be more profitable. Concentrate on making repairs a focus over the next six months.
read emag