The Stock Market is at all-time highs, the housing market is still strong, interest rates remain low, the economy continues to expand, and consumer sentiment is more than adequate despite a concerned societal outlook. Why then are retailers in general struggling to compete for customers?
The answer is simple if we just look at the facts. The shopping habits of consumers – and that includes you – have changed. It has become a challenge for traditional retailers to adapt quickly enough to compete using their same historical model of doing business. E-commerce continues to take more market share of almost every consumer product, but as a recent article in The Retail Jeweler suggests, the end of the brick and mortar store is nowhere in sight.
But to remain competitive, all jewelry retailers need to adapt quickly to a changing marketplace and to squeeze more profit out of their business. Decisions about square footage size, staffing levels, and days and hours of operation are all being evaluated for efficiency and viable competitive advantage. Getting expenses and overhead under control and maintaining cash flow and liquidity are critical.
A key aspect of these financial imperatives is proper inventory levels and the right merchandise mix. Most fine jewelers suffer from bloated inventories, most of which include aged and underperforming products. Toxic merchandise is the cancer that keeps creeping into your business and there is no end to it. Having an inventory reduction sale every decade or two will eliminate most of your problems, increase cash flow, provide for future financial stability, and give you options that you never had before.
Please consider these words of advice as a strong warning to act before it’s too late. We’ve lost too many jewelers because they failed to recognize the signs of potential demise. As always, The Gordon Company is in business to keep you in business and is prepared to help you in every way we can.