Jeweller - February 2019

SELLING
YOUR DIAMOND BUSINESS: THREE FOCAL POINTS
HOW DOES YOUR PERCENTAGE OF DIAMOND SALES COMPARE TO WHAT IT ONCE WAS? JEWELLERS SHOULD
FOCUS ON THEIR PRIMARY POINTS OF DIFFERENCE, ACCORDING TO DAVID BROWN.
Jewellers must focus on their ability to sell
diamond product, a sector that receives less
competition from non-jewellery retailers
than other product lines such as silver and
watches. Furthermore, diamond product
offers a higher average sale and good profit
margins when executed correctly.
How do your diamond sales compare to other
stores not only within your area but across the
industry as a whole?
Given the amount of comparison data now
available, all jewellers should know how they
shape up against the rest of the trade.
ALLOW DIAMONDS TO SPARKLE
if you want to get the results. Are the gems
displayed as though they are special or
do they look like part of the rank and
file? Are your tickets tidy and clear
to read? Are they fresh or tatty?
What happens when your consumers step
in-store? Does the store itself reflect the
inventory in the window?
I know storeowners who display everything
out front but then have nothing to appeal
to customers who enter – the window may
say one thing but the store says something
else entirely.
It can be hard to compare a $1 million
store with a $4 million store but these three
criteria will allow comparison across stores
of different sizes.
diamond department and determine where
you are ahead and where you are behind.
CURRENT STYLES
You need your internal inventory to match
the external. It is also imperative that tickets
are well displayed and prices are easy to read.
1. MARGIN
Diamond sales can take many forms. The
biggest concentration is usually in the area of
rings; however, stores can fail to give adequate
attention to other lucrative areas, including
pendants, bracelets and earrings.
Even within the ring market, storeowners
can focus too much on the bridal market,
neglecting opportunities that exist in
anniversary, gift and right-hand rings. Loose
stones also offer a chance to add good sales
and healthy margin to the bottom line.
2. SALES PER UNIT
You may make fewer unit sales than a larger
store but that doesn’t mean your average
sale, your percentage of sales attributable to
diamonds or your achieved mark-up have to
be any different.
Once you have drawn a comparison, consider
how can you lift your percentages in those
product areas that perform worse than
other stores.
Let’s start with diamond rings – how does
your percentage of sales compare to others?
How does your average sale and margin
compare? Do the same exercise across each
THE AVERAGE
STORE
BENCHMARK
FOR DIAMOND
JEWELLERY AS
A PERCENTAGE
OF TOTAL
STOREWIDE SALES
HAS BEEN IN THE
HIGH 30 PER CENT
TO LOW 50 PER
CENT RANGE.
3. PERCENTAGE
The average store benchmark for diamond
jewellery as a percentage of total storewide
sales has been in the high 30 per cent to low
50 per cent range. This means that the typical
jeweller will be getting half of their total sales
from diamond product.
This number took a dip during the most
popular period in the bead market but has
now bounced back substantially.
In fact, as competition in other areas has
increased, our comparison of monthly store
data shows that diamond sales are now at
their highest historic level for many jewellers
in terms of contribution to sales and profit.
DIAMONDS IN THE SPOTLIGHT
Step outside your store and look at your
windows. Does your store say ‘diamonds’?
This is your most prominent marketing
channel; you can invest all you want in
promoting diamonds but if your store
windows don’t say diamonds, you won’t
be in alignment.
Do you have effective lighting? This is one
of the main areas where storeowners can let
themselves down. Diamonds must sparkle
Are your styles current and popular or are
you filling your displays with items that have
sat around for two or three years and aren’t
earning their keep? Are you guilty of carrying
too much product?
Research has shown that a customer will
make no selection at all when given too
many choices.
Good restaurant owners know this by
ensuring their menus only offer sufficient
choice to meet the customer’s needs. This is
a great lesson for any storeowner to consider.
Diamonds must be a key focus of any
jeweller’s overall business strategy.
Taking the time to compare your
performance to others can be the most
effective benchmark of all. i
DAVID BROWN is
co-founder and business
mentor with Retail Edge
Consultants.
retailedgeconsultants.com
February 2019 Jeweller 37