Strategic value is different from fair market value where a hypothetical buyer and seller analyze data to arrive at a price. Consider strategic value to be a great approach to mapping out how a retail jewelry company should grow in sales. Strategic value reflects a jewelry company’s synergies and perceived customer value that offer customers less risk while obtaining their fashion accessory jewelry goals. Consider how strategic value takes a customer-oriented approach to the business.
Some jewelers have looked for an expansion in sales focusing more on a particular category; wedding rings is an example. However, strategic value requires leveraging the strengths of the company and not just buying more merchandise. What talents does the staff now have or need to acquire to provide superior perceived buying experiences for wedding ring customers? Consider other product categories to strategically increase sales. What additional brands or product lines may improve sales in existing categories?
Each retail jewelry company has developed policies and procedures that systematically support the organization’s ability to create and deliver value to customers. Consider expanding these business rules by acquiring or further expanding the use of a point of sale system. Don’t become so mired down in daily operations that your business overlooks the value, or particular benefits of improved approaches to current processes.
Take a different approach to the competition. Start by analyzing your competitor’s bottom line through a sales/gross profit analysis. Review types of customers by product line by competitor. What product lines might you add that can support additional competitors in the same marketplace? Likewise, what product lines no longer justify the time and resources committed due to expansion of additional competitors handling the same products in your immediate marketplace?
The reputation of a retail jewelry store can be leveraged through strategic value. Calculate strategic value in terms of potential added profits or value by leveraging new business due to existing customer relationships and the reputation of the company. Consider the total potential of acquiring new vendors to further expand existing customer relationships. Too often jewelers only consider new customers when reviewing a potential new line. Existing customers should be the first approach when introducing a new line because some of these new sales will cannibalize existing product offerings. What sort of net contribution does each new product line offer the company?
The company’s skilled and experienced staff really does enhance the reputation of the company. How might the company more efficiently and more effectively recruit, hire, train and motivate more talented staff? What new product lines best match the capabilities of the existing staff? How can the company better leverage the expertise of staff personnel through marketing communication messaging?
Strategic value can be enhanced through an analysis of how the company creates and delivers customer value. Knowing where to “build” the company is an example of market knowledge and industry expertise. Strategic value is created one customer at a time based on the price buyers are willing to pay for jewelry and their intent to repeat purchase. Retail jewelry store owners and managers can improve the value of their companies through approaches to strategic value.Follow JCK on Instagram: @jckmagazine
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