Retail jewelry stores are challenged with reducing costs without negatively impacting perceived customer value, customer shopping experiences, or limiting the company’s ability to compete and prosper during these tough economic times. Who would question the diminished marketing opportunities available to retailers due to reduced consumer spending? The natural reaction by managers is to find ways to cut costs. However, knowing which costs to cut and which areas to make larger investments in may be the most challenging task jewelry managers face today.
A recent Deloitte study of sixty high profile retail organizations reported the low-cost performers actually excelled in several activities compared to the medium and high-cost operators. The low-cost performers invested more funds into visual merchandising and online advertising than on traditional television and radio and focused more on media that communicated directly with customers. Loyalty programs, in-store display and online activities were areas of priority and were supported with more investment. These retailers also reduced their stock keeping units (SKUs) by thirty five percent compared to medium cost performers and invested more in store operations technologies. The low cost leaders spend more funds on customer facing activities and found ways to cut costs in non-customer facing areas.