Competing Against The Big Chains This Holiday Season

Competing Against The Big Chains This Holiday Season

Bob Epstein

Wednesday June 15, 2016 – As the holiday shopping season approaches, a whole new slew of ads bombarding viewers begin to air. Many of them feature the jewelry store chains competing for holiday shopping dollars. Hurry in to one of our 1,000 stores and get this mass produced ring. Sparkling love placed in a tiny cushioned display box–now at huge savings up to 60%.           

            The television commercials, which include a catchy little jingle, are beautifully choreographed and directed by some Madison Avenue ad agency. Production costs push a million dollar not counting air time. The sparkling love in a box theme is converted into a radio commercial played on drive time shows across America; a full page print version appears in national newspapers. The total advertising budget is in the millions. For the independent jeweler who has managed to survive four years of abysmal sales and has little money to spend on advertising, it’s truly a David and Goliath moment. But like Goliath, the big chains are vulnerable–size can be a weakness that the independent jeweler can use to his advantage.

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Order a quarter pounder from the McDonald’s located at 2442 Erie Boulevard East, Syracuse, NY and you’ll get “a quarter pound of 100% pure beef simply seasoned with a pinch of salt and pepper, two slices of melted cheese, slivered onions and tangy pickles all on a sesame seed bun.” Order a quarter pounder at the McDonald’s at 1414 University Avenue in San Diego and you’ll get the same product. Ditto for the other 13,800+ stores in the U.S. If you happen to be a fan of the quarter pounder this is great news. You can travel across America and be assured that your quarter pounder will look, smell and taste the same in all 50 states. Jewelry, on the other hand, is not fast food–especially something as personal and as important as a holiday gift!Jewelry is a creative personal expression and a personal adornment. So there’s a chink in Goliath’s armor when it comes to merchandise, and if played correctly, independent jewelers have a distinct advantage in being able to offer unique and different products. Having inventory that is distinctive will set your business and brand apart.Stores which offer custom designs have even more of an advantage as customers love finding that unique item.Make sure you have something to offer your customer for every occasion, every taste and every budget.

Now what about price? Of course price matters and the big chains are known to discount heavily, but there are a lot of other things which come into play beyond the price of the gift, most significantly, the suitability of the present for the person, convenience, and maybe even the attitude of the salesperson. There are consumers, who are bargain shoppers, but you can offset the allure of deep discounts with quality and again by making sure you have a wide selection of merchandise that covers all price points. If you don’t want to run a store wide sale and you have a mailing list (and I really hope you do) invite your regular customers into an open house for a private sale event and offer them 10% off their purchases during a particular weekend or week.

Customer service is a big factor. The big box stores beef up for the holiday by hiring temporary, seasonal workers who are often poorly trained and motivated by little beyond a paycheck. You and your staff have the home town advantage; you can offer personalized, knowledgeable service. Custom gift wrapping, repairs and shipping services will also help differentiate you from the chain stores. Ultimately, a store’s atmosphere is not determined by the choice of music or the attractiveness of your decor or displays. It is the attitude of the staff that establishes atmosphere.

Customer service is #1, but having an attractive store is important. Strive to create a different store look and “feel.”  All the chain stores have almost the same store layout, store branding and signage. Be different. Be quirky. Have some personality.  People love that, especially when they are out doing some holiday shopping. By becoming that cool little shop around the corner, you set yourself apart as different and better and you don’t have to compete as much on price!

Make sure your store personality is expressed through an attractive storefront which should be well-lit during the evening, and should be clean, simple, but modern. All exterior signage should be easy to read to a passerby. Avoid elaborate displays. Windows should be kept clean at all times, and burned-out light bulbs should be changed immediately. Sometimes all that is needed to boost sales is a storefront makeover—especially for the holidays.

Inside, a store must provide a warm and friendly atmosphere. This can be achieved through the use of color and lighting. At one time or another we have all walked into a business that looked sterile and inhospitable. Plain white walls and fluorescent lighting do not encourage customers to spend money. At the same time, it is important not to go overboard with interior design. You want your products to attract the most attention, not the decor.Little things can have big impact; have an over-stuffed chair for the husband who is tagging along or the child who is tired.Offer free hot chocolate, coffee or tea and cookies for weary shoppers.

Yes, the big jewelry store chains will out-gun and out-spend the independent jeweler when it comes to national advertising. But if the independent store owner is focused on the quality, variety, uniqueness and value of merchandise, provides great customer service in an interesting and different store atmosphere, he can successfully compete and prosper during the holiday shopping season.

 

Bob Epstein is CEO of Silverman Consultants, LLC.  Offering a legacy in sales strategies for jewelers since 1945, Silverman Consultants provides guidance to store owners seeking to turn around a business, sell off unwanted inventory, or liquidate an entire store. With offices located in Charleston, South Carolina; New York, New York; and Saskatoon, Canada; the company helps jewelry store owners and chains formulate strategies designed to maximize revenue in times of transition, whether due to retirement, store closing, or simply when needing a boost in sales. For more information, visit www.silvermanconsultants.com or call Bob direct at 1-800-347-1500.

Time For Aggressive Marketing Tactics

Time For Aggressive Marketing Tactics

Bob Epstein

Wednesday June 15, 2016 – For the last century,store owners have operated on the premise borrowed from the script in Field of Dreams: “if you build it they will come.” It’s all about location, right? So build your store in a traditional strip center on a busy street with goodvisibility and lots of parking and they will come. Or build it in a mall and they will come (or at least walk by). Or build it in a luxury lifestyle center and they will come—maybe in their BMW or Audi. The whole build it and they will come mentality is why many traditional jeweler store owners still didn’t bother to maintain customer mailing lists, have anything but a rudimentaryweb site and scoff at Facebook.  Who needs Facebook they will come.

            But the times they are a changin. Customers aren’t coming. They go on-line to shop for diamonds with certifications they didn’t understand. They goto big box stores after seeing the full page ad in the newspaper and hearing the 60 second spot of cable television. When the recession hit and customers did come, it wasn’t to buy jewelrybut to sell Aunt Betty’s gold bracelet. Nobody in the family really liked Aunt Betty anyway….she was difficult to get along with.  And who can afford jewelry during a recession when the college tuition needs to be paid and the washing machine finally died and was beyond repair.

Old timers shake their heads;the industry has changed. Things aren’t what they use to be. True.If you build it they may notnecessarily come.  Even if you have already built it and been in business for a while, they may not come with the frequency or spend as much as in the past. It’s not enough these days to have a good location with adequate merchandise.So now what? Curse the darkness or light a candle?

The now what is that owners must take a more aggressive, pro-active approach to getting customers into their stores to buy. “If you build it they will come” needs to be replaced with “if you mail, e-mail, manage a Facebook page, strategically discount, manage your inventory and advertise they are more likely to come.”In this day and age it’s essential to have a plan of attack: a detailed sales and marketing plan. Now might be just the perfect time to do some analysis and planning prior to the holiday shopping season

Of course each market is unique. Each store is unique.You’ve  got to develop an overall  marketing strategy that is relevant to who and where you are.In this regard, location is still important.The mix and match of different advertising media often depends upon where your store is located—whether it’s in a densely populated, city location, or more rural area where customers will drive from a neighboring towns, even counties to shop. For example, sign walkers strategically placed at high traffic intersections in major metropolitan markets  are incredibly effective in generating store traffic. They are much less effective  in less densely populated or rural areas.So location does matter.

Newspaper print ads in major metropolitan areas have become so expensive they are often cost prohibitive; neighborhood newspapers–many  published weekly–offer  a cost effective alternative. Local radio station spots on local news or talk shows can be productive  but costs vary widely by market as do the cable television stations.

No matter where your store is located, direct mail is a solid foundation because it will allow you to contact your current customers and target new prospective new buyers as well. Hopefully you have a mailing list of current customers that you use periodically. If not, you can begin building a customer database using customer information stored on your computer system or your OutlookTM. Many point of sale systems used today have the ability to transfer customer information into your database every time you run a credit card. To attract new customers, you might want to test targeted direct mail to outside mailing lists. Match the demographics of your own customers with that of the list you rent. Direct mail is our favored media as the results are immediate and measurable. With the right mailing list, a strong offer and call to action you can connect with your customers–no matter where your store is located and what other advertising media might come into play.

Okay. . .let’s talk about Facebook—it’s not just for kids anymore. The Facebook users who are age 55-and-up has skyrocketed; up 80% since 2010.  There was also a 41% increase in Facebook users ages 35 to 54 during that same time period.  Facebook users in the U.S. now stand at 180 million. Having a Facebook page these days is a little like having a business card. You’ve got to have one. If managed and used correctly it can be a no-cost media source to stay in touch with current customers and attract interest from prospective buyers. But you’ve got to use it!

Post at least once or twice a week to keep your store name and activity in circulation. Use yourFacebook pageto announce  anew and exciting shipment of designer goods. Maybe announce an open house and private sale for preferred customers. Every now and then post a customer profile (with their permission of course). Something that celebrates an engagement or other life milestone. Pictures of the happy couple and the ring they just picked out. Chances are that couple will comment and “share” that post with their friends; some of those friends will like or share that post. That’s viral marketing. The real deal.

Yes, times have been tough in the jewelry industry but we’re not hopeless or helpless. But the tide will turn. Taking some affirmative action and putting together an aggressive marketing plan now will help position you for a more successful and profitable fall and holiday shopping season.

 

Bob Epstein is CEO of Silverman Consultants, LLC.  Offering a legacy in sales strategies for jewelerssince 1945, Silverman Consultants provides guidance to store owners seeking to turn around a business, sell off unwanted inventory, or liquidate an entire store. With offices located in Charleston, South Carolina; New York, New York; and Saskatoon, Canada; the company helps jewelry store owners and chains formulate strategies designed to maximize revenue in times of transition, whether due to retirement, store closing, or simply when needing a boost in sales. For more information, visit www.silvermanconsultants.com or call Bob direct at 1-800-347-1500.

Eaton Hudson Launches New Jewelry Advisory Division

Eaton Hudson launches new Jewelry Advisory Division

Lead by former Silverman Consultants’ Team and Focused on Exit Strategies and Asset Disposition.

Alpharetta, GA and Toronto Canada – Monday June 27, 2016 – Eaton Hudson today announced the formation of a new division, Eaton Hudson Jewelry Advisors.  Based in Charleston, South Carolina, the division, led by the former Silverman Consultants team, will focus on providing various financial services to jewelry store owners’ seeking to turn around a business, sell off unwanted inventory, or liquidate a store or an entire chain of stores.

“This new division is a natural expansion of our business as we continue to grow to meet the needs of the industry.  Having managed the asset disposition of many jewelry retailers over the years, and working with the former Silverman Consultants team for most of these, we know how important good industry expertise can be in developing these jewelry retail strategies,” said James Schaye, CEO/Partner, Eaton Hudson, Inc.

Bob Epstein and John Jones, formerly of Silverman Consultants, will serve as the Division’s Chief Executive Officer and Chief Operating Officer.  While at Silverman Consultants, Epstein and Jones worked on some of the most important jewelry firms in the United States, including Friedman’s Jewelers, Samuels Jewelers, Whitehall Jewelers, Fortunoff, Brodkey Brothers, International Diamond and Gold and most recently Ross Simons and Michael C. Fina.  “We admire the Eaton Hudson team for recognizing the importance of specific industry expertise in our line of work, and are glad to be a part of the launch of this new division.  With Eaton Hudson we have a tremendous amount of resources behind us and can draw from the financial capital and back office operational structure of the company, allowing for a much greater expansion of the jewelry advisory services throughout the United States and Canada,” commented Bob Epstein.

Eaton Hudson Jewelry Advisors will help jewelry-store owners and chains formulate strategies designed to maximize revenue in times of transition, whether due to retirement, store closing or promotional events.  As part of the advisory services, Epstein and Jones will offer purchasing, evaluating and appraising inventory, restructuring, bankruptcy, budgeting and financial planning.

About Eaton Hudson, Inc.

Eaton Hudson is owned by the Eaton Family, formally Eaton’s Department Store.  It provides innovative and strategic solution for the disposition of excess, obsolete and discontinued inventory and other assets.  Using our financial strength and expertise, we partner with retailers, financial sponsors, strategic buyers, managers, lenders and advisors to develop creative and transparent structures that align interests, enhance liquidity and create positive outcomes.  For more information visit www.eatonhudson.com

Eaton Hudson’s Sales Event Success Factors

Eaton Hudson’s Sales Event Success Factors

Bob Epstein

Thursday June 16, 2016 – So you’re thinking about running a sale event in your store. Maybe you want to move dated or slow moving inventory. Maybe you need to increase store traffic. You might even be thinking about retirement and closing your store. All good reasons for a sale. So if you run a sale, how well will it do? What impact will it have on cash flow and your bottom line?

         There are several factors that will help in determining how successful your sale event may be. Analyzing historical sales data for your store over the same period of time that you plan to run the sale is a good starting point. Historical numbers will give you a baseline to determine how a sale might improve your business. But beyond that there are several other factors which strongly influence the success of the sale: seasonality; store history and reputation;the theme of the sale;the propensity of the store to discount and run other sales, and the state of the national and local economy.

Seasonality.  Typically a thirdof annualjewelry sales are generated during the November-December holiday timeframe,and much of that volume is done 10 days prior to Christmas. But January is also a strongsales month as many shoppers look to spend gift cards and work bonuses. Sales tend to spike again around the Valentine’s Day and continue on into the spring with Mother’s day, student graduations and the traditional spring wedding season. For most jewelers, summer is the pits. Even with a strong theme, good advertising and discounting it’s hard to move merchandise in July and August. There are exceptions, of course—most notably summer vacation resort destinations whose season mirrorsthat of the traditionaljeweler.

Reputation.Stores that have been in the same location for over five years and have built a good reputation for customer service have a big advantage over newer establishments.For this reason, grand opening sale events for independent jewelrystores area challenge. Unlike the big box, brand name stores with their hefty advertising budgets to announce the opening of a new location, customers tend to steer away fromunknown, independententities when it comes to buying jewelry.

An established store will hopefully have built a strong customer mailing list and can use this list to promote their sale event. And when it comes to inventory, independent jewelers also have a distinct advantage in being able to offer unique and different products. Having inventory that is distinctive will set your business and brand apart from the chains and can be an important building block in running a sale event.

Discounting.A store that is continually discounting or runningpromotional sales will have a tough time running another significant sale event targeting price points. They become known as a discounter and the impact of a sale event is less meaningful. It’s a matter of credibility with the buying public. By contrast a store that rarely  runs a sale and is not known for discounting will have a far better chance of success in getting a customer’s attention; sale discounts are meaningful–not just part of the normal course of business.

Sale theme.This brings us to the most important factor in the success of any sale event:  the theme of the sale. Over the last decade the American buying public has been educated and has been accustomed to looking for deals—especially in the recent economy. Storeclosing or store retirement sales are the best in terms of getting the public’s attention and moving significant amounts of merchandise. Customer loyalty is a key factor with store closing sales as store owners can appeal directly to their base of business offeringprivate sale incentives for their best customers as a reward for their patronage over the years.

Store closing and retirement sales are the most effective themes, but there are a variety of promotional themesthat work including anniversary or trade liquidation type events. Again the reputation and history of the store are key factors in predicting the success of the sale.

The national and local economy. You can lead a horse to water but you can’t make him drink. Likewise you can advertise, discount and generate additional store traffic but you have no control over the buying mood of the public. It’s been our observation over the last five years that while the response of the buying public may be marginal in some areas of the country; in others the response has been good. It just depends. While you cannot control the state of your local economy you should be aware that it’s obviously a factor in determining the outcome of a sale event.

When planning a store wide sale event it’s important to take into account the impact of

seasonality, store history and reputation,  the theme of the sale, the propensity of the store to discount and run other sales and even the state of the national and local economy. A well planned and professionally conducted sale event can generate additional store traffic to help increase sales and positively impact your cash flow.

 

Bob Epstein is CEO of Silverman Consultants, LLC.  Offering a legacy in sales strategies for jewelerssince 1945, Silverman Consultants provides guidance to store owners seeking to turn around a business, sell off unwanted inventory, or liquidate an entire store. With offices located in Charleston, South Carolina; New York, New York; and Saskatoon, Canada; the company helps jewelry store owners and chains formulate strategies designed to maximize revenue in times of transition, whether due to retirement, store closing, or simply when needing a boost in sales. For more information, visit www.silvermanconsultants.com or call Bob direct at 1-800-347-1500.

Eaton Hudson’s Discount Sale and Pricing Strategies

Eaton Hudson’s Discount Sale and Pricing Strategies

Bob Epstein

Wednesday June 15, 2016 – Last weekend (and it just happened to be Labor Day Weekend) I went to one of those Big Box clothing and  department stores to pick up a pair of shorts to play a round of golf  that afternoon. I’m in the retail sales consulting business but when it comes to buying something like a pair of shorts I’m not on assignment. I’m not here to do research.  Just get me in, let me get my shorts and get me out of there. The store was running a “huge storewide sale with discounts up to 60%.” That’s nice. I find a pair of shorts. They fit. They feel comfortable.  The price tag says $75.00 which is idiotic for a no brand name pair of golf shorts made in China. But they are marked down over 50% to $35.00. I head to the check-out.

            “Wow, you saved over 50% today,” says the enthusiastic cashier.

“Yeah, but that’s about what they should have been to begin with. Maybe less.”

“But you get an additional $5.00 Big Box Cash certificate today with your purchase.”

“Thanks. Have a great day.”

Driving to the golf course I think about the psychology of discounting and how it plays out in the retail jewelry industry. Of course there’s a big difference between  picking up a pair of shorts for a golf game and shopping for jewelry: picking out an engagement ring that’s a significant monetary and emotional purchase; a Valentine or anniversary gift for a wife or girlfriend. A bracelet or set of diamond stud earrings for a daughter’s sixteenth birthday.  Of course men and women often have distinctly different buying motivations. Rarely do you hear a guy say “those earrings will go perfectly with my new dress.” More often you’ll hear him ask: “how much is this?” But the fact is that both men and women  are extremely price sensitive in this post-recession  era; it’s usually the key factor in a purchase decision—even before they get to your store.

When you ask consumers about a particular  store, they may say something like: “that place is expensive, but they have great service,” or perhaps it’s “inexpensive but they have poor service and unattractive inventory.” Whatever the customers’ impression, pricing is often part of the store description. So it’s important to remember that pricing plays a key role in a customer’s perception of your business and their decision about where to buy.

Now what about discounting or running a store-wide sale event to move older inventory? How does that fit into your priding policy. Or does it? Some older, well established, high end stores absolutely, positively will never run a sale “because that’s not who we are.” Discounting doesn’t fit with their store character and persona. Their thinking is that they cater to the wealthier clients who expect quality and service and might somehow be insulted by a storewide sale. Nonsense–that’s store ego at play. Even (or perhaps especially) affluent Americans like a bargain. Who doesn’t appreciate the opportunity to save money?  Furthermore when a store that does not normally run sales does run one, it’s usually effective. It’s all in the position, marketing and message of the event. Conversely, an independent jeweler whose pricing mirrors the Big Box everyday discount chain could have a difficult time creating excitement and additional traffic if they are known to be habitual discounters.

A storewide sale event can be effective,  but it better have a theme and a discount strategy. Now and then I run into an owner who claims to have run a storewide sale. How did you advertise the sale? “Oh, we really didn’t advertise.” What was your discount and pricing strategy? “Oh, we really didn’t discount much.” And then they wonder why the “sale” didn’t do well.

Before you step out there and decide to run a sale, think through the reason for the sale. Clearance sales, holiday, anniversary, and trade liquidation sales are just a few of the themes that are typically used in the industry. Again, the success of these special sale events is impacted by a store’s standard  pricing policy , margins and price point: these factors tie into a store’s target customer and demographics.

This brings up a final; point: successful retailers are better adept at identifying the true market value of the products they sell during the normal course of business (without a sale event). They understand that there are customers who will pay more, customers who may pay more at certain times, and customers who will never pay more.  Consider also, there are things you can do to de-rail comparison and price shopping.

  • Try to get exclusives. This avoids your store being shopped on a price only basis. Ask your vendors about an exclusivity deal based on geography or time (three months is suggested).
  • Make sure you have a wide selection of merchandise that covers all price points, even when are not running a sale.
  • If you don’t want to run a store wide sale and you have a mailing list (and I really hope you do) invite your regular customers into an open house for a private sale event and offer them 20% or more off their purchases during a particular weekend or week.
  • Keep your sale items toward the back of the store. Force your customer to search for them. Tempt them with your regular priced items before they see the marked down items.
  • Offer free services to your valued customers, such as jewelry cleaning or free watch batteries.

It’s critical to determine the right pricing strategy for your business and how a sale event might fit into your overall business plan.  Successful jewelers understand there’s a time and place for a store-wide sale event that’s advertised and includes a discounting strategy which will attract both new and existing customers.

Bob Epstein is CEO of Silverman Consultants, LLC.  Offering a legacy in sales strategies for jewelers since 1945, Silverman Consultants provides guidance to store owners seeking to turn around a business, sell off unwanted inventory, or liquidate an entire store. With offices located in Charleston, South Carolina; New York, New York; and Saskatoon, Canada; the company helps jewelry store owners and chains formulate strategies designed to maximize revenue in times of transition, whether due to retirement, store closing, or simply when needing a boost in sales. For more information, visit www.silvermanconsultants.com or call Bob direct at 1-800-347-1500.