Sneak Peek: Valuing Jewelry Stores
What It’s Worth: Valuing Jewelry Stores is the latest in BVR's series of special reports and is an ideal and timely resource for anyone looking for insight into what drives value in the jewelry industry. With that in mind, let's take a look at Chapter 2, "Macro Drivers of Profit in the Retail Jewelry Industry."
Attracting New Customers
Jewelry stores face competition for new customers from other jewelry stores and other channels, including department stores, mass merchandisers, warehouse clubs, and online retailers. Companies invest in store furnishings and fixtures to create a distinctive ambience that attracts shoppers. They may also invest in branded jewelry lines from celebrities or organizations to attract new customers. Marketing via direct mail, local advertising, and social media is often used prior to major holidays to help drive store traffic and reach out to new customers.
Building Repeat Business
Jewelry stores often rely on repeat purchases from wealthy customers to generate steady revenue. By providing attentive service and developing trust, stores encourage buyers to return for additional purchases during major holidays, anniversaries, and birthdays. Developing a customer information system that tracks purchases and personal information, such as birthdays and anniversaries, allows stores to provide personalized communications to customers and provide better recommendations on gift purchases that complement previous purchases.
Customer loyalty programs that provide discounts and other rewards can also encourage repeat purchases.
Increasing Average Sales Size
Besides increasing the number of customer transactions through higher traffic, jewelry stores can grow revenue by growing the average sales size. Sales staff are typically trained to offer “upsell” opportunities by showing more expensive pieces as options to buyers. They are also trained to recommend complementary add-on purchases, such as earrings to match a new necklace. Stores can encourage multiple-item sales by displaying jewelry in sets and may even offer a discount on buying multiple items at a time.
What It’s Worth: Valuing Jewelry Stores gives you the big picture on the unique considerations in the jewelry industry and tackles important topics such as: trends impacting the industry; the key internal, external, and qualitative drivers; and important questions to ask management when preparing your valuation.