“The majors live and die by price point,” said Abe Sherman, owner, Buyers International Group, Ringoes, N.J., in his “Merchandising Like the Majors” presentation on Wednesday.
Sherman revealed the buying tactics of mass merchants to a packed room of jewelers eager for insight on how to compete with their discounting competitors. Sherman urged jewelers to embrace some of the majors’ strategies: “Stock lower price points, and show the prices,” he said.
Sherman kept earring displays with imprinted prices on hand throughout his presentation to warm jewelers up to the in-store merchandising method commonly used by discounters. Majors use such displays and lower-priced products because customers want perceived value. “Many jewelers say `Let them go to the mall, that’s not my business’ when I show them earring trays with $79, $99, $149, and up prices on them,” said Sherman. “Well, your customers are going to the mall, and you’re losing out on young customers who someday will be able to afford $5,000 studs.”
Jewelers love their product too much, Sherman observed. He believes that style should be considered last when re-stocking product. Visit a mall-based jeweler on a Monday morning and note which slots in the cases are empty to determine which items sold over the weekend. “And since you’re not stocking those lower-priced, quick-turning diamond studs, the mall store is experiencing a 1½ turn rate, while yours is less than once a year,” he said. And if your inventory has been in the store for more than one year, it’s old. Offer spiffs or sales incentives to employees to move old stock, ask vendors if they’ll exchange it, or clean it and move it to another area of the store for a fresh look.
Sherman also warned against paying too much attention to nationwide averages-average sales per store, etc. “Averages (comparisons to other jewelry stores) are dangerous because they don’t reflect your area specifically,” he said.