Most retailers were disappointed by their December 2019 sales. The underwhelming numbers weren’t awful, but they were just bad enough to convince stores that 2020 would need to be a year of refocusing — particularly on digital marketing and customer retention. Despite the looming national elections, retailers seemed determined to make the most of the coming year.
Uninspiring holiday results
December wasn’t terrible, but it could have been better for Richard Neustaedter, owner of Neustaedter’s in St. Louis, Missouri. “Holiday started out great, and we were way ahead of 2018,” he said. “But in the last week, it kind of faltered.” He blamed his problems on local liquidation sales at two area stores that were closing their doors. “Still,” he added, “we’re fine, and we’re able to pay our bills.”
Amanda Coleman, general manager of Nelson Coleman in Towson, Maryland, was happy overall with the month of December, but it wasn’t as robust as she’d hoped. “We hit 87% of our gross profit goal and 93% of our retail goal,” reported Coleman, whose store serves the greater Baltimore metropolitan area. “Our closing ratio was 30% for the month of December. Compared to [2018], however, we were down in product sales due to having lower bridal numbers.”
The month was also discouraging for Michael Han, owner and president of The Wedding Ring Shop in Honolulu, Hawaii. “We did not make our numbers, and it was not what we wanted, especially December,” he lamented. “[Maybe] it’s because we’re a bridal store, and people are choosing to propose at different times of the year. We see a strong surge in spring, and then early summer isn’t as strong. Then late summer and during the fall, it’s very strong. Then November and December seem to be more tepid.”
What sold well
Neustaedter, who is celebrating his 50th year as a business owner, said his store’s stock of expandable diamond rings did particularly well, as did his selection of lab-grown diamonds. “Lab-grown has been successful,” he said. “It’s nice for young people to be able to buy a diamond.”
Basics were strong for Coleman. “Just like [in 2018], our staples did well,” she stated, noting that diamond bracelets, diamond studs and jackets, and — surprisingly — pearls had all sold nicely. “We sold a lot more pearls this December [2019] than we have in the past.”
For Han, bridal alternatives and high-end branded merchandise led sales. “Colored-gemstone jewelry is doing nicely,” he said. “Not gangbusters, but people are looking for alternatives to diamonds as center stones. And for us, luxury upper-end bridal is where it is. Low-end doesn’t work for us. The chain stores have that market.” He pointed to brands such as Tacori, Hearts on Fire, A.Jaffe and Noam Carver as performing well.
Targeted marketing
Neustaedter expects the coming year to be good for business, despite the traditionally erratic sales that election years tend to bring. “Election years sometimes fall off, but I don’t think it’ll be a problem for us this year,” he said. “I think 2020 is going to be a great year. The economy is growing, and the stock market is phenomenal.”
Coleman said she was planning to adjust her focus during 2020 and target value-added gifts for her top clients in specific categories. Digital will also be a factor: “We’re going to be focusing more on video testimonials, making sure we have 90% of our in-store merchandise on our website. [Additionally, we’ll] track the effectiveness of our email campaigns, have a bigger presence on Instagram and a more selective presence on Facebook. We’re also creating a micro site that focuses on custom, and we’ll continue to pursue opportunities to give back to our community.”
Han, meanwhile, will be putting the emphasis on his existing customers this year. “Your customer database is the low-hanging fruit,” he said. “You need to reach out to them to make sure you’re the jeweler of choice that they reach out to. And you want to stimulate them to think of you when it comes time to refer someone. It’s like a diamond mine of customers. We go elsewhere to find customers, but we have customers already.”
Article from the Rapaport Magazine - February 2020. To subscribe click here.