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How will you Posture Yourself this Year?

Now that the flurry of fourth quarter has passed and you’re settled in for the New Year, it’s time to start strong and with a plan that works for you and your organization. Fourth quarter was a mixed bag across the country. There were some big swings in both directions but not enough to make astounding statements as to, “jewelry retail sales were fantastic or terrible this year”. Overall, the road remains consistent, it’s not easy like it once was. There is more knowledge available to the consumer, and competition isn’t next door, it’s in the palm of the hand.

So how will you posture yourself this year? Are you ready to buckle down and do something different? Make the changes that you know have been needed but just didn’t want to take on? Or are things running smoothly and all systems are “GO”? You’re ready to conquer not only the local competition but your marketplace. In either case, there is always room for improvement and optimistically this year could be the one to take your business to the next level. We challenge you to ask yourself several questions and respond with answers that will help set you on the right track for 2016.

Start by taking fresh look at your store. Ask yourself these questions:

  1. Who is my competition and where do I rank among them?

  2. If I’m not the most dominant jeweler in the market, why not? If I am, how do I ensure I’m going to stay in this position?

  3. What’s does my financial position look like? Are my accounts payables current? Does my cash flow work?

Now take a look at where you have been and where you are today.

Are you on the upward climb or have things begun to slip? Take the temperature of your business to see how healthy you really are. Examine the following numbers for the past five years and it will tell you what direction you are headed.

  1. What were your total sales for each of the last 5 years?

  2. What were your total number of transactions (are you growing your customer base)?

  3. What was your average sale?

  4. What was your gross margin?

You should find that each of these numbers examined has increased for you, if for no other reason than you are still in business. If not, that is a signal of an area to be addressed this year. U.S. retail stores continue at a closure rate of approximately 900 a year which is a 15% decrease in stores over the past 5 years. Although we have experienced a steady decline in the number of jewelry stores since 2007 industry sales are back just short of pre-recession sales (referring specifically to - brick and mortar locations). An interesting fact: 1992-2002 jewelry sales increased by 64% while 2002-2012 the increased slowed to only 21% (according to the US Census) a clear representation of the recession. Further, history consistently shows a decline in industry growth the year immediately following an election, an indicator of this coming 2017. This is not meant to be a discourager but knowledge for you in your process specifically as it relates to your inventory purchases, sales plan and ultimately cash flow plan.

Posture yourself to compete

There are fewer jewelers in business today than before and the closure rate continues to increase due to baby boomers retiring and an economy that has not yet fully recovered. It is more important than ever to approach your business with a solid plan. Since the marketplace is still quite high at $30 billion in annual sales, now is the time to increase your share. If you posture your business correctly, you have the opportunity to increase market share and dominate your market versus becoming the next casualty in the jewelry industry.

It is critical that you make the time to examine your business and put your goals on paper accompany your goals with an action plan to accomplish them. As the saying goes, “if you aim at nothing – you are sure to hit it”.

Dan & Lori Askew

Vantage Group – Strategic Planning