• We don’t know how to properly price our products.
• We wanted to see if we could get you to pay this price first.
• We apologize for pricing it like this.
• We really need your business, so I’ll take a price dive to get you into this today.
• We can also discount service and parts.
• You’re gonna have to play the haggling game with me.

Are these good messages to be sending your customers? You may think you’re creating friends, but all you’re doing is training them to get the lowest price, in which case you’ll see their car at the jeweler down the road just as often as at your store.

I used to be caught in this fear aspect of discounting — in a way, apologizing for the price and trying to build a customer base by doing them a favor. I was giving away the store, causing cash flow problems, profitability problems and sending out all these signals I mentioned. We had trained our customers to expect a discount, and we had to retrain them to know that the price on the ticket was the price.

I discovered that the one thing we weren’t doing through all this discounting was adding value. We learned how to add value to all of our merchandise by finding out from the customer what was important to them. An easy example is Brenda and Mark coming into the store for an engagement ring. After some discovery questions, we learn that Brenda has to have a pear-shaped diamond and that she’s a physical therapist. Brenda says the important thing is that she has a ring that she doesn’t have to take off at work.

Armed with that knowledge, there’s no need for discounting. We simply design a ring with a solid, safe setting in palladium or platinum with a proper V prong or even full bezel set. How would it look if I designed exactly what she wanted, including casting and mounting, and then took off 20%? It wouldn’t make sense. If we know the customer’s reason for the purchase and why it’s important to them, price becomes no object.

Now when it’s really time to discount for legitimate reasons such as closeout or dated inventory, we can simply state the honest truth. Honesty about discounting lends credibility to your organization and can build your relationships. So, don’t apologize to your customers through regular discounts. Learn to sell them on the reasons that are important to them, and you’ll be a much happier jeweler.

The post Here’s How to Change Your Discounting Mindset appeared first on INSTOREMAG.COM.

As in years past, we’ve devoted every possible section of the magazine to engagement and wedding jewelry. But for 2023, we thought we would take a slightly different approach to our lead story, focusing on how to sell more wedding bands after the initial engagement ring sale. After all, it’s an oft-overlooked part of the business, yet the wedding band sale is just as evergreen (and important) as the sale of the diamond and mounting.

Two years ago in our annual Big Survey, 61% of respondents said that more than half of engagement ring clients return for the wedding band purchase, but to be honest, I think that’s a little bit of wishful thinking. The general consensus is that only about half of jewelry retailers see that kind of success. And honestly, it should really be 100%. If you sell someone an engagement ring, why would they go anywhere else for their wedding bands?

As Engagement 101 founder Severine Ferrari says, it’s a “blind spot” for the industry, but we hope you have your eyes wide open to the opportunity that wedding bands present to your bottom line. Enjoy the issue and stay committed to bridal success!

Trace Shelton

Editor-in-Chief, INSTORE
trace@smartworkmedia.com

The post Why the Wedding Band Sale Is Just as Important as the Engagement Ring Sale appeared first on INSTOREMAG.COM.

Supply and demand: The price for any product will be found at the equilibrium point.

Moore’s Law: The cost of producing products using evolving technologies will decline over time, with a consequent increase in value offered.

Disintermediation: As supply chains become more efficient, the elimination of intermediaries will lead to lower prices.

The result is clear: Prices have fallen. There is, of course, a point at which growers will no longer willingly sell rough, but we’re not there yet. And remember, unlike CZs, which can be cut using entirely automated processes, diamonds require a far more intricate cutting process, creating an ultimate floor to the price of polished goods. Fortunately, just as the three principles listed above are applying downward pressure on price, evolving trends may serve to support current, and perhaps even higher, price levels.

Domestically, consider that Signet alone will metabolize enormous quantities of lab-grown diamonds as they attempt to maximize their share of the category. Costco hasn’t even gotten in the game yet, in part because of inadequate levels of supply. And companies like JC Penney are now contemplating a shift to lab-only strategies, leading the rest of the majors towards CVD. On the independent side, lab has become a runaway freight train, with no apparent end in sight.

Globally, the scenario for dramatic increases in demand is even brighter. Nearly every major retail chain in Europe is currently engaged in lab-grown diamond tests, tracking approximately two years behind the US trend line. Indian consumers are embracing super high-end lab, primarily D-IF/VVS. And China Gold, a chain with over 1,000 stores, has launched a major lab-grown diamond program, forcing the other Asian majors to follow suit.

Finally, recent strides in diamond chip technology research will likely result in a significant redirection of CVD growth away from gemstone use and into computer applications.

All of this presents a new set of mathematical curves. While lab-grown diamond supply will track in concert with the installation of new machines as an arithmetic progression (e.g., 2,3,4,5…), CVD demand will track as an exponential progression (e.g.,2,4,8,16…). In a horse race between different types of numerical progressions, the smart move is always to bet on the exponential curve.

So, how low will lab-grown diamond prices go? Mathematical models suggest we are approaching a bottom.

The post What Mathematical Models Can Tell Us about Future Lab-Grown Diamond Prices appeared first on INSTOREMAG.COM.

I jumped into all the features and benefits of the watch. Not only was it a super rare, limited edition, it was No. 2 out of 300. Seiko often keeps No. 1 for themselves or high-profile collectors, so this watch was truly the lowest serial number that could ever be found for this model.

I told him to also keep in mind that when Seiko does limited editions, often they are in the thousands; the fact that this watch had only 300 made is incredibly rare. I followed up with the statement that all of North America usually only gets about 10% of these limited-edition watches — that’s 30 total pieces for all of the USA, Mexico, and Canada.

“I get all those reasons make the watch cool, but I need you to tell me why I should buy it.” He emphasized the “I” particularly hard. It occurred to me that as salespeople, we talk up what something does and how it benefits customers, but we don’t do a particularly good job of conveying to people why they in particular should actually make the purchase.

My close to him was personal because I know his collection inside and out. I told him, “Well first, I know you like limited editions, and the fact that this is No. 2 means that you get the first commercially available number. That’s a huge feather in your cap as a collector. Second, you don’t have anything this color in your collection, which means it should get plenty of wrist time. Besides all that, your wife just picked up her custom ring last week, so it’s your turn for something nice.” He bought that watch and actually bought another limited edition the following week because we had the same conversation.

Now anytime it gets down to closing time with a client, I have that Backstreet Boys song playing in my head. Don’t simply tell people the features and benefits of what they are buying; tell them why they should buy it and why they are better off to buy it than not to buy.

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These encounters are one of the best opportunities to show up as a trusted advisor and genuine friend by getting to know your clients on a personal level and establishing a pattern of warm communication and celebration of life’s milestones and precious moments.

Networking experts have long praised the virtues of starting meaningful conversations with the FORD method where one asks about the Family, Occupation, Recreation, and Dreams of another. While this is a helpful framework for anyone to follow, jewelers especially could benefit from having a system of their own that’s reflective of our industry. And so, my team and I set out to FLIP the jewelry industry’s approach to taking client notes on its head.

F – Family

Especially when selling an engagement ring, we as jewelers have an incredible opportunity to understand our clients’ family connections and build bonds well beyond this one sale. Take down the names of key family members and relationships, as well as any notable dynamics of a client’s family that can strengthen rapport and cater to their collective needs (such as anniversaries or important holidays).

L – Location

Beyond their address, knowing where your clients live and work unlocks valuable insights into their lifestyle and buying habits. Take note of the cities they live and work in, as well as places they may frequently travel to; this enables you to understand their daily routines, community involvement, and potential social circles, which will help you curate selections that harmonize with your clients’ lifestyles.

I – Interests

Recording your clients’ hobbies and interests establishes a strong foundation for building genuine connections. By understanding their passions and pastimes, jewelers can engage in meaningful conversations and forge common ground.

P – Preferences

Tracking clients’ metal, stone, and style preferences is vital in creating tailored experiences and providing thoughtful recommendations that lead to repeat business.

While it might seem counterintuitive, some of the jewelers and sales staff that we’ve privately mentored have grown their business by six figures or more from meeting their clients “where they’re at,” whether that’s an art gallery, a VIP wine tasting, a local yoga class, or even virtually.

With a comprehensive approach to client relationships and a consistent system like the FLIP model, any jeweler can turn a one-time purchase like an engagement ring into a lifelong relationship.

The post How the Right Note-Taking System Can Turn Engagement Ring Clients into Lifelong Collectors appeared first on INSTOREMAG.COM.

If the client leaves and they were not closed, you need to know how they want to receive communications. Most salespeople assume that people just want a text. Wrong! Always ask if they prefer a text, email or phone call. Ask if there’s a time you can reach out that’s better than another. Try to set up a follow-up appointment: The closing ratio on follow-up presentations is over 80%. That’s because, at that point, they’re not coming in to look; they’re coming in to give you money.

Another important tool of professional follow-up is the thank-you card. I spoke to a group of millennials at a show a few years ago, and I asked, them, “How many of you have ever received a thank-you card?” Less than 10 hands went up.

All sales should be followed up with a thank you card, but bridal clients are extra special because they are celebrating a special event in their lives with you. It’s an honor to be part of that.

Always ask if you can send a card. I sent one to a dentist once and his wife received it. The problem was that he had given the diamond to one of his employees. He came in angry, but I did sell him another diamond. But I don’t know what he told his wife. Oops!

Most thank-you cards are too generic. You need your thank-you cards to be professionally printed in your store’s colors on nice paper stock. The card should have three short paragraphs. The first one tells them how important they are to you and your company. The second one is a genuine thank-you.

The third one is to let them know that in six months, there will be a follow-up to let them know that their jewelry will need a clean-and-check. This lets the client know that the ring is important, and that you’re there to help them take care of it.

When they come in, give them a soda or wine (you already know what they like). Talk to them about their honeymoon. This gives them a chance to show you the next item on their list, and you’ve planted a seed for Christmas or Valentine’s. We’re in the relationship business, and this allows you to work on the anniversary and all special events for the next 30-40 years.

Your sales team has to do the proper follow-up to keep the client forever. They’ll send their friends to you as a result. The thank-you card should be mailed within two weeks of purchase (unless it’s the holidays). I signed all of my cards, “Professionally, Shane Decker.”

Find a word that fits your profile that’s professional. Happy selling!

The post Want Clients to Come Back? Get Personal with Your Follow-Up Efforts appeared first on INSTOREMAG.COM.

Here are some things to ponder.

Inventory levels. If you’re a multi-generational jeweler or just heard from others “you can’t sell from an empty wagon,” sure but how big of a wagon do you really need? Having more stock than you should causes a store to have a large amount of debt and less cash.

The right amount of inventory level is easy to figure for our industry. Find your gross profit dollars for stock inventory only for a 12-month period. Up or down by 20% equals the amount of inventory to stock and not have too much debt.

If stock sale sales are $900,000 and your gross profit is $420,000, then the inventory to stock is within 20% of $420,000 (within 20% up or down means keeping in a range of $336,000 up to $504,000). Inventory levels higher than $504,000 end up increasing accounts payable and credit card debt by a lot.

Inventory turn. Every industry has a “good” turn number.

There is a difference between making money and having money. Every jewelry store makes money and is profitable, but a poor turn ends up showing we have less cash in the bank and more debt. For our industry to have money, we need to have a turn overall of “1”. In other words, buy it in January, sell by December. Some items might turn 2-3 times a year (every 3 to 4 months and then reorder), while other items might take 15 months, but overall for the store, a turn of “1”. Point-of-sale programs will give this number, but to figure your own, divide your cost of goods amount for 12 months by average inventory.

Example: Sales of $1 million, profit $550,000, thus cost of goods = $450,000. If inventory is $425,000, turn would be 1.05. Great!

GMROI. At a doctor visit, she tells you your blood pressure, weight, cholesterol level and gives you three meds for each. Wouldn’t it be great if the doctor just gave you one number? “Hey, you’re an 8, just take this one pill daily and you’re good to go!”

Jewelry has the same system for good jewelry health. It’s GMROI (Gross Margin Return On Investment). This tells you with just one single number how well you are handling inventory (buying/selling/returning to vendor/scrapping).

It measures three jewelry numbers: How much money you make when you sell it (gross profit dollars for a 12-month period) plus how many times a year you’ve sold inventory (turn) plus how much inventory you had on average when you sold it.

Again, most POS systems have this report, but divide your gross profit dollars for a 12-month period by the average stock inventory level you had (no memo). Like turn, this number should be 1.00, give or take. Stores with a GMROI around .65 to .75 have a large amount of debt. Stores with a GMROI above 1.00 generally have very little debt and a good bit of cash in the bank.

Closing ratios. If 10 people come in the store, look in your case and ask, “Hey, how much is that ring?”, how many out of 10 customers do you sell? A typical store sells 3 out of ten, 30% closing ratio. Did you know if you could sell just one more and make it 4 out of 10, then product sales would increase by a whopping 33%?

Here are three that are typical in a store:

Closing Ratios:

a. Stock: 30%
b. Custom design: 70 to 80%
c. Jewelry Repair: 90%

Sales staff costs. Let’s assume that the owner doesn’t sell the majority of the store sales, here’s how to measure sales staff productivity.

Divide the salesperson’s W-2 by their total sales, and that will tell you what percentage of every sale they are paid. Generally speaking, staff should cost between 8% to 15%. At 8%, they are very efficient on the floor. Closer to 15%, they are not doing well on the floor or they don’t get a chance or you let them wait on easy-to-handle low-dollar transactions and you take all of the large dollar ones.

Product has turn, while shop sales only have time. A high turn is great for looking at product sales, but the shop doesn’t have turn, it has time. The more jobs done in a day — or better yet, the more dollars produced in a day by a jeweler — is how to measure the profitability. It’s compared to total shop costs. Profits should be double shop costs.

Generally speaking, a jeweler’s workbench should produce between $175,000 to $375,000 a year in dollars, considering a jeweler is paid $45,000 a year and up.

Have a checking account and a company savings account. Each week, put 7% of the deposits into the savings account. You won’t miss it. This is your rainy-day fund when things are really tight. Leave it alone, don’t touch it. I have more in my rainy-day fund than my checking account. You’ll thank me later.

The post Want to Make More Money? These Are the Numbers to Keep a Close Eye On appeared first on INSTOREMAG.COM.

The “trick” is to make the transition when it counts: when you’re wealthy enough to enjoy yourself but still well enough to make the most of the experience. Knowing when this is from a health perspective can be a challenge — a sudden illness can put paid to the best laid plans — but one thing is certain, your health will generally not improve as you age.

Your income and wealth can be a little easier to predict. Some simple budget planning based on current wealth goals and a continuation of your income and its growth rate will answer the first part of the equation — at what point you will reach the ideal level of wealth in order to “call it a day.” The amount that you will need will depend on the extravagance of your lifestyle. Sitting at home in rural Kansas will be a considerably cheaper retirement choice than jetting around the world or setting up a retirement hideaway in Manhattan.

Another factor to consider is your legacy. Do you plan on leaving a sum for loved ones or a favored charity? If so, how much? Or is your mission to clean the bank account out by the last day? Having a lump sum left at the end will increase the amount of money you will need to sock away and may extend the time you will need to continue working.

Whatever method you work with, keep in mind that even as you spend your money down after retiring, the remainder will still bring in a return for you based on the power of compounding. The 4% rule is often cited as an example of how much of your savings you should spend each year in retirement. On the surface, this would seem to indicate your savings would last you 25 years (4% each year x 25 is 100% of your savings used up), but remember, the money that isn’t spent is still working for you, so it’s generally assumed this method can potentially give you 30 years of comfortable living.

The post How to Figure Out How Much It Will Take to Retire appeared first on INSTOREMAG.COM.

1. Always know what’s selling. Identify your top-selling inventory and automate reorders. This will allow you to easily replenish your inventory when you are running low on popular items without requiring your manual approval. Share your data with your vendors, so they can commit to running this weekly and automating the replenishment process, ultimately increasing your efficiency and profitability.

Once you’ve identified your most popular pieces, consider ordering a few variations to appeal to a wider audience. These variations can include different carat weights, diamond cuts, and gold color settings. Thus, you expand your customer base while minimizing your risk.

2. Increase sales. Input min-max levels into your POS systems so that automated reports will auto-populate for you when you are at or below your minimum levels. This will help you stay on top of your inventory and avoid stockouts, which can lead to lost sales and unhappy customers. Companies such as Lanham Forecasting offer formulas to automate this process and make it easier for you to manage your inventory.

Consider working with vendors who can assist you with bin stock and delivery commitments. This will help ensure that you always have the inventory you need on hand, which can help you reduce your lead times and avoid missing out on sales.

3. Provide an enhanced customer experience. Automation can help you provide a more exclusive customer experience by enabling you to personalize your marketing messages, offer personalized product recommendations, and respond to customer inquiries quickly. Having the ability to offer targeted promotions and discounts based on customer behavior and preferences will ultimately drive more traffic to your store and increase conversion rates.

4. Stay ahead of the competition. Automation can be used to analyze data from e-commerce websites and local competitors to identify popular products and trends. For example, you can also use automation to monitor social media and online reviews to identify new product opportunities and customer needs. This data can inform decisions about adding new items to your inventory.

Once you have identified potential new items to add to your inventory, you can further streamline the process of adding them to your automated systems. This can include updating your inventory management system and setting up automated alerts to notify you when inventory levels reach a certain threshold.

Automation can help your retail store become more efficient, effective, and profitable by enabling you to focus on what you do best: serving your customers and growing your business.

The post Here’s How to Automate Tasks to Increase Profits and Efficiency in Your Store appeared first on INSTOREMAG.COM.

“The program is designed to accelerate natural diamond education beyond the 4Cs,” says Gabrielle Grazi, VP for retail strategy and partnerships for the NDC. “The NDC saw immense success with the education program for our Official Retail Partners, which encouraged us to offer the program to the entire industry.”

Online courses are included in full retail partnerships, but the NDC now offers its education to all, with an annual subscription.

The program aims to enrich skill sets and enable learners to stay educated about the benefits of naturally occurring diamonds. They should then be well equipped to educate consumers and convert sales.

The turnkey platform hosts learning tracks comprised of interactive education, exclusive content, and digital assets. Each learning track is equipped with materials to complement the interactive episodes, including infographics and resources, social media assets, articles, and certificates of completion.

James Free Jewelers, which is owned by Michael Karaman, employs 62 people with stores in Cincinnati and Dayton, OH. Mike Hopper, general manager, says courses from the NDC have helped the staff feel more confident in selling diamonds. “We sell only natural diamonds,” Hopper says. “Our position is that the person receiving a James Free box wrapped in our beautiful paper has an expectation they will be receiving a diamond and not an alternative.”

That decision also ensures that James Free’s lifetime option to upgrade stays simple. The company honors the original price paid toward the purchase of a new diamond, even if the new diamond is $1 more than the original.

Recently, the Natural Diamond Council (NDC) released the results of a new study performed by CXG, a leader in the luxury consumer insights space, verifying that educating consumers about diamonds at the retail point-of-sale is critical to sales conversion.

Research suggests that 40 percent of customer interactions did not include proactive diamond education via sales advisers, which directly impacted sales conversion. Findings prove that 93 percent of customers were more inclined to make a purchase of diamond jewelry when they felt sufficiently educated by a sales professional. The research confirms that sales professionals play a paramount role in educating customers.

Loose diamond and diamond jewelry categories are still the No. 1 component of James Free’s business. Instead of attempting to convert shoppers on price, the James Free team is equipped to present facts about diamonds. “The conversion rate is pretty high,” Hopper says.

“Price vs. value is something we always stress,” Hopper says. “The person who wants a Louis Vuitton look-alike vs. a Louis Vuitton bag is the same person who would buy a 4-carat, lab-grown diamond over a carat and a half natural diamond. But when you consider the provenance of giving Grandmother’s ring to your daughter, there’s not much to it if it’s lab-grown; it’s just a keepsake.”

Still, the fact that larger diamonds have become aspirational is good for everyone selling diamonds. In his market, the 1 carat bar was moved to 1.5 carats for naturally occurring diamonds several years ago; and the 2 carat is now standard for all diamonds. “The luxury jewelers of the world have seen everything,” Hopper says. “We’ve had synthetic gemstones for longer than I can remember, yet natural-colored stones still do well.”

Day’s Jewelers is another of NDC’s partners. Shoppers at Day’s continue to prefer naturally occurring over lab-grown diamonds, says Leo Gerrior, store manager for Day’s Jewelers’ South Portland, ME, location. “NDC is giving us a lot of content to talk about the reasons to go to natural and our internal trainings have been about how to talk about diamonds and the differences between those two options,” he says.

The NDC’s education program blends well with other education Day’s offers and the timing couldn’t be better, Gerrior says.

“As a company, we’ve been revamping our education structures both for onboarding and continuing education,” he says. “Career pathways, everything. Right now, education is one of our biggest initiatives. Diamonds are the cornerstone of our business, so diamond education is paramount to what we’re doing and our No. 1 priority. We’re mixing everything on natural diamonds with sales presentations training and general diamond knowledge training.”

Jen Thornton, a consultant who designed the educational platform for the NDC, said the goal was to equip sales staff with a story that they could easily share with their customers, that goes beyond the technical details usually taught.

Thornton sought out a Learning Management System that would offer a lot of flexibility in the experience. The one they chose allows for interactive modules, video content, and links to specific articles. It allows store owners and managers to download social media content as well as materials that can be used in their own, in-house workshops.

Instead of an old school approach (watch a video and hope you remember everything) this system appeals to effective adult learning methods, such as novelty, discovery, appealing to senses and appealing to emotions.

“It’s a way to explore the information instead of just listening to it all,” Thornton says. “Curiosity keeps the learning paths open in the brain.”

In addition, all of the information is bite-sized, but participants can click to learn more. “When we interact as adult learners, we’re more likely to remember it and clicking connects with the ability for touch,” she says.

The learning tracks include an Introduction to the NDC, The History and Allure of Natural Diamonds, The Industry’s Progress and Commitment to Sustainability, The Difference Between Natural and Laboratory Grown Diamonds, Fancy Colored Diamonds, Busting Diamond Myths with Facts” and more.

The education platform is turn-key to review and activate the annual subscription. Visit here to enroll. For inquiries on partnership opportunities, email educationpartners@naturaldiamonds.com.

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