For Janet Silver, owner of Robert’s Jewelers, solutions to inventory management problems are in the bag—the grab bag, to be more precise. For the last 25 years, Silver has used grab bags in some form or another as part of larger store events. But as her grab bags become known in her market, the Tenn.-based store owner has been holding Grab Bag Special events every other year (for the last 10 years) to reduce inventory.
This year, the biennial event happened in September, when Silver and her staff created 500 grab bags. Every one of them sold is less than an hour. With customers limited to no more than two grab bags per transaction, Silver estimates she and her staff made 350 unique sales in roughly 55 minutes. In the years Robert’s Jewelers has held their Grab Bag Specials, Silver estimates that she has sold $20,000, $40,000, and even upwards of $60,000 at these events, which have historically sold out in about an hour.
“It’s pure pandemonium,” says Silver. “People line up outside the door long before we’re ready to open.”
Silver’s grab-bag success didn’t happen over night. In business since 1946, Silver sheepishly admits that after 65 years “a jeweler can have a lot of old inventory.” Over the last 25 years when grab bags were used as part of larger store events, average Grab Bag prices were about $250. Over the years Silver has made sure customers receive a good value for the money. And, the policies established back then still hold today: no peeking in the bags, no negotiating, and all sales are final.
Here’s how the event works. Silver identifies non-performing inventory and sells it down as best she can. If the marked items don’t sell after six months to a year, the item is set aside for the next Grab Bag Special event. Before items are bagged they are discounted roughly 50 to 65 percent. The item is then placed in a nondescript paper bag and a desired price is handwritten using a black marker on the outside of the bag just below the stapled fold.
“Typically items are sold at or just below cost,” says Silver. “I may lose some money, but it’s better to turn these items than have them cost me money sitting in a display case or safe.”
Dollar amounts run the gamut, from $1 on the lowest end to $2,500 on the top end. (In the 10-year history of this event, Silver has never sold a Grab Bag Special item priced over $2,500.) A majority of Grab Bag Specials range in price from $40 to $100, with a majority priced at around $75.
The roughly 75 percent female and 25 percent male customers line up to take a number. When a customer’s number is called they usually have a dollar amount in mind and ask if there’s a Grab Bag Special in that price range. The bag is sold and customers are gently reminded of the firm return policy.
“People who don’t know the event well will test the waters by buying a low dollar amount—under $25,” says Silver. “When they discover the jewelry value they received for the money, they quickly get back in line and buy another Grab Bag at a higher price.”
The sell-down price tags are purposely left on each bagged item. Silver wants customers to see how the item has been discounted over time. Grab Bag Special jewelry items may not have sold while in a display case, but at a discounted price it’s a big bang for the jewelry buck. And Robert’s Jewelers customers, like most people, enjoy a good bargain and talk about it all the time.
“The key is to make it special and to give the customer a tremendous value,” says Silver. “Even if the person doesn’t like or want the jewelry, I’ve overheard many conversations about how that person can give it to a family member or friend. One woman said, ‘Even if the bag was empty, I wouldn’t care given how much fun I’ve had.’”
On average, about 90 percent of the jewelry is for women with a modest 10 percent of men’s jewelry bagged for these events. But for Silver, a majority of Grab Bag Special items are closeout collections that simply didn’t go over as well as the store owner had hoped in her market. And in recent years, Silver expanded to a second store then consolidated back to a single store, leaving her with a large surplus of inventory to clear out.
Silver has mastered a fun event, but the retailer is deadly serious about her strict no-sales policy. She’d rather hold the Grab Bag Specials every other year than host deep discount sales. In recessionary times, people have become skeptical of such sales.
And Silver is just as firm about not dropping her old jewelry on a refiner’s scale in dealing with non-performing inventory. “I just don’t believe either solution is good policy for getting a handle on inventory problems,” she says.
To promote the event, Silver and her staff sent e-newsletters and e-mail blasts to the 1,800 accounts in the store’s database. Facebook has proven to be a strong promotional dynamic to the marketing mix, and the event is promoted heavily with Silver’s radio partner. A live radio remote was done at the store the day of the event with WNWS 101.5, a local talk radio station partner for Robert’s.
“The live remotes are perfect for radio,” says Silver. “During these events the store is filled with sounds of women literally screaming about the deals. The event practically sells itself.”
Silver is pleased that her customers find the sale to be such an exciting event, proving that her patience in building excitement and anticipation for Grab Bags paid off. Over the years the store owner has made mental notes of some of the fun and funnier things that have happened during her Grab Bag Specials.
“At the most recent event one a woman showed me the ring she got in her Grab Bag,” says Silver. “She told me she looked at this ring three times but couldn’t justify the expense. Then she shows up at a Grab Bag Special and unknowingly purchased the ring she had wanted for so long. What are the chances?”
The newly redesigned showroom at Robert’s Jewelers
In September, Silver was just as thrilled with the sales that resulted from her recent Grab Bag Special. Earlier this year, she started an aggressive renovation project and found herself over budget by fall.
“Money from the recent event helped cover most of those extra expenses,” says Silver. “And a majority of my customers who were at the Grab Bag event got to see the remodeling work in progress. All Grab Bag Special customers were invited to come back when the work is completed, which was a great opportunity for us.”