Last night had dinner with Shane Decker and a jeweler.
There can’t be a single jeweler in the US who hasn’t heard of, read
an article from or hasn’t sat in a seminar at a trade show of Shane
Decker.
I’ve known Shane for over 25 years and we have spoken together at
many of the InStore shows in Chicago.
When I go visit jewelry stores I can always tell which one are
really serious about being successful. How? When I’m at their store
and while sitting in the back I look at their calendar.
“David Geller here” on one date and then look backwards or forwards
see “Shane Decker here.”
We both compliment each other for a store in many ways. You know me
because of being Shop/Repair pricing guru, training the staff to sell
repairs and custom for the most money; inventory maximization in
dollars and QuickBooks.
Shane is all about selling, store management, having the right
people up front, commission systems (just like me!) and many more
items.
This is his second visit to a store I have helped a lot in the past
and I was there with him at the end of the day yesterday while the
owner, he and another management person discussed how to better the
store and increase sales.
“Its all about having the right people on the sales floor who are
paid for production plain and simple. No entitlement here.”
So I thought I’d share tid bits of our end of the day and dinner
together with Shane and the store owner with you in bullet points.
- This store paid the sales staff 100% salary. After many years they
became complacent. People continued to get raises during the good
“go-go” years.
After the recession hit in 2007-2008 closing ratios dropped. What
was 60-70% is now 23% closing ratio. See 10 customers and sell 2.3 of
them. The store needs more sales and increased advertising hasn’t
helped.
-
Sales staff wages have been greatly reduced and replaced with a
lower salary and a good commission plan. The idea? In this multi
million dollar store to have sales staff cost the store 7% of their
sales. The typical store I see we talk about the staff costing the
store 8 to 13% of their sales. If they cost you 8% the staff is very
efficient. At 13% they are inefficient. -
So a new compensation plan is being implemented now. Reduction of
salaries almost 50% and added 6% commission. -
Sales training has now begun on a permanent basis (have you read
this stuff from me before?) -
Rather than focusing on advertising more (he told this store to
reduce their advertising budget) their immediate focus is going to be
on increasing closing ratio. If they now sell 2.3 people out of 10
who come in and get it up to 3.3 out of 10 (one more person) product
sales will go up 50%. For this store that’s a 7 figure increase. -
Shane mentioned at dinner typically larger stores in America have
a turnover of sales staff every 5-7 years. The idea of “we’re family
and I’ll take care of you” is not in the mind set of successful
stores. Shane kept saying “the staff is paid for production, not
entitlement.” -
Good sales staff have very good people skills, communication and
closing skills. Not the easiest to have and you have to constantly be
looking and training. -
Other points during dinner and the meeting. Right now on the west
coast of US yellow gold is making a big comeback. Especially 18kt. -
Many successful stores are selling more 18kt yellow and 18kt white
in bridal. Not as much platinum. Palladium is great in stores because
of the price point. He told us of a store selling $999 bridal rings
getting triple key rather than pushing platinum. He mentioned to put
a great polish on palladium takes even longer than platinum and if
you had a jeweler who could really polish it then it’s shine would
last wonderfully. -
He loves cad/cam, as do I. Satisfies the customer with great
margin. -
Almost all of his successful stores he visits use our price book.
That’s nice.
-
I asked him about jewelers looking to sell their stores. Larger
stores with large inventory and large sales can be sold but the
typical mom and pop store a going out of business sale and will do
better doing a GOB over trying to sell the store. -
He mentioned if you’re going to do a “GOB” sale start planning 18
months to 2 years in advance and said to ramp UP inventory in
anticipation (don’t read into this YOU should buy more stuff if
you’re staying in business).
Especially diamonds. Why? Because that’s what sells at a GOB sale
and because its yours and probably paid for you’ll get a lot of dough
of your own money rather than the profit splitting memo items that
will be brought into a GOB sale.
-
Many large chains are revamping their stores and putting in medium
height showcases. Some cases where in between the traditional sit
down case and the very tall cases. Special bar stools for sitting
comfortably. -
Some of the large chain stores (if I mentioned their name you’d
know them) will fire a staff member if they don’t turn over a sale to
someone else. -
He’s big on spending bucks on better lighting in the store.
-
Location, Location, Location. This store is in a once vibrant
location and lost its sizzle. So they are looking at a new location
with better visibility and with customers who carry fatter wallets
and bigger purses.
Shane confirmed what I have been preaching all along: “A move to a
new location can easily increase sales 30 to 50% in the first year
of the move. If its the right location sales could double. A free
standing building can easily DOUBLE sales.”
Side Note From David
This summer I visited a store where the young woman bought the store
from her grandmother (Yes, I’m speaking to YOU!). Grandma started the
store before I was born and back then downtown was the place to be.
But since buying the store downtown along with the downturn business
has dropped. She’s done a good job so far but prospects for
increasing sales are almost nil. Sales are less than when she bought
it.
I suggested she move 5 miles away to the 4 lane main drag where
everything is happening. All of the big box retailers are there and
jewelers. Along with every main restaurant you’d want. Guess what?
There’s a gazillion young people there! Downtown in her store many
customers walked up to me and said “Have you signed up for Medicare
yet? Its great!”
My suggestion is to have a going out of business sale and move 5
miles to a new location. if the old people follow, great. if they
don’t I’m not worried. So I just wanted to say to this young jewelry
store owner that Shane agreed with me and his words were “I sure hope
this young lady takes you advice and gets out there as soon as
possible”. (I read it this way “get the hell out of Dodge”)
Every store I talk to or visit that has had Shane in their store had
greatly increased sales. This store told me since he was there last
the staff is on fire. Shane interviews each staff member to see if
they are “still” a good fit or not and starts the training. But I
have seen some stores later come back down and for one reason. They
have no follow through. You must have store meetings with training
and accountability.
[1] His website below
[2] Here are some videos on archive from his speaking at InStore
shows below
Yesterday Shane had half a day on closing techniques and “to-O’s”.
Turning over is going to be a must to increase closing ratios. Today
Shane is conducting management class for the team leaders.
So all and all a good evening wouldn’t you say? Too bad you couldn’t
attend.
Better yet the jeweler treated for dinner. The scallops were
delicious!
Sincerely
David Geller
Director of Shop Profits
JewelerProfit.com
References