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Mark Moeller’s Thursday presentation, “Steps to Take to Recession Proof Your Business,” encouraged retailers to return to the basics of managing.
Moeller’s return to basics was more like basic training. The AGS president and owner of R.F. Moeller Jeweler was critical of many retail jewelers who either don’t have a proper business plan or have an unrealistic one.
Moeller stressed the importance of not overestimating a store’s market potential. If the market can’t support a certain range of higher-end jewelry, the owner needs to acknowledge the actual purchasing power of clients and buy inventory that sells well in that price range. “Be realistic about your business plan by being a store that is within the realm of possibility,” says Moeller. “Don’t try to be the biggest Rolex dealer or carry the largest inventory of GIA-certified diamonds if your market can’t support it. The business plan should reflect what you can do, not what you want to do,” says Moeller.
Moeller discussed inventory management, beginning with a plea to retailers to work toward a goal of owning a majority if not all of their inventory. Memo less, he advised. “It draws attention away from the goods in a store owner’s inventory that they own.”
Another inventory problem is too many vendors. Moeller pared down from 300 to 100. Of those, Moeller spends the most time with what he calls his “top 25,” which amount to 90 percent of his business.
Moeller stressed the importance conducting monthly inventory reviews, by vendor, with an in-house or contracted financial expert to determine a store’s top 25. “If it doesn’t perform a 1.0 turn in a year, dump it,” Moeller advised. “The only exceptions to that rule are what I call my strategic vendors such as Rolex, Lazare Kaplan, and Mikimoto.”
In recessionary times people may not always be interested in products. That’s when “jewelers should be emphasizing their services.” R.F. Moeller Jeweler has added another watchmaker, which has doubled watch repairs and watch repairs earnings.
Relationships were another topic. To effectively compete in today’s market, jewelers must develop relationships with clients, especially the top 100. In good times or bad, these customers make up roughly 80 to 90 percent of a store’s business.
Developing relationships means learning more about clients and their potential jewelry purchases, from birthdays and anniversaries to new appointments at work, or being the focus of a newspaper or lifestyle magazine’s social pages.
Moeller also discussed social networking. “Retailers who aren’t on Facebook, Twitter, LinkedIn, or any of the other leading social networking Web sites like MySpace are going to be out of business,” says Moeller.