Holiday retail sales have historically been defined as same store sales made during the last two months of the year. In general, retail sales have represented 25% to 30% of total year retail sales. During the last quarter century the trend in retail sales has reflected a decline due to more aggressive discounting and heightened competition for disposable income. Contrarily to this trend in all retail sales, holiday jewelry sales continues to grow as a greater percent of total annual sales. Many stores now rely on holiday sales for 40% to 50% of their annual sales. While many retailers planned more limited total inventories for 2009 holiday sales, many jewelry stores carried their largest season inventories of all time.Now that the 2009 Holiday Selling Season is over what do the numbers say? Many stores have reported good traffic from holiday shoppers and that shoppers, in general, were looking for lower priced/more value oriented merchandise. Other trends include increases in online sales and more gift card purchases and a decline in fashion sales for both women and men. Early reports of seasonal sales for jewelry stores seem to be ranging from declining to flat to modest improvements. This could be a victory overall when considering total luxury sales for 2008 was estimated to have declined 35% and the continued concerns due to unemployment and the economy. . . and how the decline in total jewelry stores continues.
It still makes sense to have a focus on merchandise that serves the needs of todays more value oriented shoppers. Merchandise needs to be both affordable and capable of building the brand’s image. However, as the economy improves it will be important to track the purchasing habits of luxury items by more affluent customers. Demographically, more affluent folks tend to feel the effects of a slower economy first and have historically, enjoyed the benefits of coming out of the recession first. The New Year is being met with well tempered anticipation for much economic improvement. However, affluent shoppers could begin to show more optimism in two ways. Their economic state may improve in 2010 to encourage them to make more luxury purchases in fashion, accessories and jewelry. The other point to consider is that as affluent shoppers economic conditions improve they may also move away from the attitude that making luxury purchases is not politically correct in this economy. This psychographic change is also important to a strong improvement in jewelry purchasing from higher end consumers. Be prepared to upgrade your inventory mix in specific market niches as the economy shows improvement and shopper attitudes improve in 2010. Consider how the early sales reports from Tiffany and Zale varied. The higher end marketplace seems to have performed much better than the middle market which continues to face huge challenges.
What do the numbers say? Consumer confidence is still a blockade to improved luxury shopping, but now some of the sticking points may be starting to loosen up with more affluent shoppers. The most successful companies have historically found ways to be ready to maximize opportunities when market conditions have improved. What do your store’s holiday sales tell you about your marketplace opportunities in 2010? How should you continue to develop niche markets of customized product offerings in specific price ranges?