Published in National Jeweler, Nov 11, 2020
Steve Dennis wrote in “Remarkable Retail” that “Historically, many retailers have been intuition rich and data poor. Or even if a decent amount of data was compiled, it was hard to work with or was ignored. For the merchant princes, more times than not, their mantra was, ‘In gut we trust.’”
I confess to having an insatiable curiosity when it comes to watching data; monthly, weekly, even daily.
This is especially so when it comes to how our independent retailers are faring during the pandemic, and more specifically, how they might perform during the holiday season.
Despite the crazy challenges of this year, independent retailers continue to overcome almost every obstacle thrown at them and are delivering exceptional performances.
For most retailers, June was the first month they fully reopened for business.
From June on, each subsequent month has seen sales performance top the same period from the previous year.
This impressive trend continued in October, which showed a 17 percent increase in gross sales.
And, as has been the case for quite some time, while the number of overall units sold continues a downward trend, average retail ticket keeps climbing.
The average retail sale for October was up 30 percent.
With respect to specific products, loose diamonds showed a 16 percent increase in gross sales in October, representing 15 percent of total gross sales for the month.
Diamond bands also showed solid performance and represented a 25 percent increase in gross sales in October when compared to the same period last year.
Interestingly, diamond bands are in fact one of the few categories that show an increase in all key performance indicators.
Beyond gross sales, bands were also up in units (+17 percent), average retail (+7 percent), and gross margin (+3 percent).
Historically, retailers have mostly viewed diamond bands as a wedding product.
However, this category has evolved to include right-hand rings, occasion bands (birthdays, anniversaries, etc.), and a variety of stackable designs, opening up far more opportunities for retailers to grow that category.
While there are some outliers, the sweet spot for most units sold in this particular category seems to be $300 to $1,500 according to our $2 billion of aggregated sales.
One of the best-selling SKUs we see in the diamond band category happens to be a price-point rose gold ring. However, the vast majority of bands are white gold prong-set with round brilliant diamonds.
Understandably, the disruptions of April and May had an adverse effect on retail performance, but the subsequent string of positive months has recovered much of the lost ground going into these remaining important weeks.
For the 12-month period ending July, we saw a 5 percent decline in overall sales year-over-year.
By August, the 12-month decline was 4.4 percent, and by September the decline was down to 3.4 percent.
While the data for October trailing 12 months is not yet available, it is anticipated that we will see further erosion of the trailing deficit.
So, what does this all mean for the important holiday period?
Retailers should continue with their COVID-19 initiatives such as curbside delivery, one-on-one appointments, virtual trunk shows and contactless payments.
Most importantly, they should continue to follow best practices around inventory management, especially, and most importantly, replenishing bestsellers as quickly as possible. Not doing so might just be the single greatest source of lost sales in the season.
If they’re not already doing so, retailers should review last year’s holiday performance to identify bestsellers and get them in immediately.
Vendors have had to manage their inventories tightly in what has been a very difficult year for them, and it could be a costly miss to assume that bestsellers will be available as the season develops.
Check your numbers, be proactive, and have a great holiday season!
Sherry Smith is director of business development for data and consulting company The Edge Retail Academy. In her role, Smith works with wholesalers, brands and retail stores on business mentoring, and data analysis and aggregation. Reach her at sherry@edgeretailacademy.com.
Steve Dennis wrote in “Remarkable Retail” that “Historically, many retailers have been intuition rich and data poor. Or even if a decent amount of data was compiled, it was hard to work with or was ignored. For the merchant princes, more times than not, their mantra was, ‘In gut we trust.’”
I confess to having an insatiable curiosity when it comes to watching data; monthly, weekly, even daily.
This is especially so when it comes to how our independent retailers are faring during the pandemic, and more specifically, how they might perform during the holiday season.
Despite the crazy challenges of this year, independent retailers continue to overcome almost every obstacle thrown at them and are delivering exceptional performances.
For most retailers, June was the first month they fully reopened for business.
From June on, each subsequent month has seen sales performance top the same period from the previous year.
This impressive trend continued in October, which showed a 17 percent increase in gross sales.
And, as has been the case for quite some time, while the number of overall units sold continues a downward trend, average retail ticket keeps climbing.
The average retail sale for October was up 30 percent.
With respect to specific products, loose diamonds showed a 16 percent increase in gross sales in October, representing 15 percent of total gross sales for the month.
Diamond bands also showed solid performance and represented a 25 percent increase in gross sales in October when compared to the same period last year.
Interestingly, diamond bands are in fact one of the few categories that show an increase in all key performance indicators.
Beyond gross sales, bands were also up in units (+17 percent), average retail (+7 percent), and gross margin (+3 percent).
Historically, retailers have mostly viewed diamond bands as a wedding product.
However, this category has evolved to include right-hand rings, occasion bands (birthdays, anniversaries, etc.), and a variety of stackable designs, opening up far more opportunities for retailers to grow that category.
While there are some outliers, the sweet spot for most units sold in this particular category seems to be $300 to $1,500 according to our $2 billion of aggregated sales.
One of the best-selling SKUs we see in the diamond band category happens to be a price-point rose gold ring. However, the vast majority of bands are white gold prong-set with round brilliant diamonds.
Understandably, the disruptions of April and May had an adverse effect on retail performance, but the subsequent string of positive months has recovered much of the lost ground going into these remaining important weeks.
For the 12-month period ending July, we saw a 5 percent decline in overall sales year-over-year.
By August, the 12-month decline was 4.4 percent, and by September the decline was down to 3.4 percent.
While the data for October trailing 12 months is not yet available, it is anticipated that we will see further erosion of the trailing deficit.
So, what does this all mean for the important holiday period?
Retailers should continue with their COVID-19 initiatives such as curbside delivery, one-on-one appointments, virtual trunk shows and contactless payments.
Most importantly, they should continue to follow best practices around inventory management, especially, and most importantly, replenishing bestsellers as quickly as possible. Not doing so might just be the single greatest source of lost sales in the season.
If they’re not already doing so, retailers should review last year’s holiday performance to identify bestsellers and get them in immediately.
Vendors have had to manage their inventories tightly in what has been a very difficult year for them, and it could be a costly miss to assume that bestsellers will be available as the season develops.
Check your numbers, be proactive, and have a great holiday season!
Sherry Smith is director of business development for data and consulting company The Edge Retail Academy. In her role, Smith works with wholesalers, brands and retail stores on business mentoring, and data analysis and aggregation. Reach her at sherry@edgeretailacademy.com.