'The rich continue to get richer.'
Our store comparison data showed some positive signs for October. The monthly average sales result per store came in at $107,836 up 3.5 percent from the $104,163 result for October 2016. Units sold continued to decline with 262 items sold this October versus 271 in the same month last year. Average sale lifted 5.1 percent from $349 to $367.
This has resulted in year-to-date sales for October ticking over the $1.6 million mark up from $1,598,493 last month, an increase of 0.23 percent.
Margins have been maintained but continue to be low at just 45 percent. That represents 81 cents of profit for every $1 invested into inventory.
This month we are looking at the make up of sales between those stores who do under $1 million per year in sales and those achieving more than $1 million. As we’ve shown previously, larger stores have a more significant contribution in dollar terms from diamond jewelry. Here is a chart from January 2013 showing the difference between larger and smaller stores in terms of their contribution to these numbers.
As the numbers back then showed larger stores are carrying nearly three times the inventory of diamonds and achieving over three times the level of sales. They were not only achieving a better average sale but were selling twice as many units.
So what do the current numbers show?
In the space of four years the gap has widened. Larger stores are now achieving four times the level of diamond sales that smaller stores achieve. The difference in average sale is still around the same (50 percent better) but they are now close to achieving three times the sales volume of smaller stores and the rate at which they are reinvesting in diamonds is continuing to grow.
When it comes to selling diamonds the rich continue to get richer. They have invested 64 percent more into diamond product than they did in 2013 compared to the smaller stores whose investment has only increased by 25 percent. As such they are now responsible for $81 out of every $100 spent on diamonds in the U.S., up from $75 just four years ago. This may not seem significant, but when you already dominate three quarters of the sales dollars an increase of that level is huge. They have maintained their average sale at a time when smaller stores have seen theirs decline.
It’s the unit sales, however, where the most noticeable difference appears. Whereas smaller stores have grown diamond sales units by 11 percent over the four years, the larger stores have seen theirs increase by 50 percent, almost five times faster.
So why is the gap widening? Why are larger stores continuing to take market share in diamonds away from smaller stores? The most obvious answer is selection, with larger stores able to offer more choice. But the rate of growth in inventory is less than the rate of growth in sales, pointing to other factors that are making a difference. What we can’t see is the level of investment in staff training across the stores and this may be a significant contributor to results.
How do your numbers compare? It may be a good time to grab some old sales reports and check on the performance of your diamond product over this four-year period. Are you matching the trend for your store size across inventory, unit sales, average sale and total sales? If not, it may be time to review your approach to diamond product and look at where your results are falling behind.
This story is an INSTORE Online extra.
JEWELER SUCCESS STORIES
“Halfway Through the Sale, We Already Did a Year’s Worth of Volume”
Torin Bales says he was “blown away” by Wilkerson’s results after the company ran his retirement sale. “When you hire a consultant, you have to let them take control,” says the Texas retailer. After all, if you’re like most jewelers, you only retire once. Get the maximum return on your life’s investment. Turn to Wilkerson & Associates and let your new life begin!