In our ongoing engagement with the jewelry retail community through our Brain Squad survey, we recently explored critical aspects of inventory management and clearance strategies, revealing intriguing insights that underscore the diverse approaches within the industry.
Inventory Turn Rates: A Balanced Divide
When queried about surpassing a 1.0 average inventory turn across the board, the responses from our survey group were evenly split:
YES: 50%
NO: 50%
This division aligns with the industry’s broader context, where the average yearly inventory turn for American retail jewelry stores hovers between 0.7 and 1.2. The dichotomy underscores the ongoing debate within the industry, where experts emphasize tight inventory control and high-turnover products.
Strategies for Exceeding 1.0 Turn Rate
Owners achieving turn rates exceeding 1.0 attribute their success to disciplined inventory management. Small-scale artisanal mining operations prioritize environmentally friendly methods, employing less invasive techniques than their larger counterparts.
Owners exceeding the 1.0 threshold emphasize strict adherence to policies prioritizing inventory turn and limiting aged inventory. Tim Sherrer of Lou’s Jewelry in Mobile, AL, highlights proactive efforts, including discounts for stock over four months old, while Alan Perry of Perry’s Emporium in Wilmington, NC, underscores the importance of rapid stock replenishment.
Conversely, owners struggling to breach the 1.0 threshold cite challenges in moving old inventory, often due to overinvestment in specific categories. Mark Clodius of Clodius & Co. Jewelers in Rockford, IL, expresses a commitment to divesting excess value without compromising profit margins.
The Role of Business Models
For some, a turn ratio below 1.0 is not necessarily detrimental. Businesses engaged in jewelry bought “off the street” or specializing in custom design may operate successfully with lower turnover rates. Rex Solomon of Houston Jewelry in Houston, TX, and Medford Chason of Treasure Hut in North Charleston, SC, exemplify such models.
Clearance Showcases: Strategies and Preferences
When asked about having a dedicated showcase for inventory clearance, responses were as follows:
YES: 43%
NO: 57%
Owners leveraging dedicated showcases for clearance highlight positive outcomes. Rick Weadock of Jewelry-By-You in South Jordan, UT, emphasizes its visibility to repeat customers, while Joel Wiland of J. David’s Jewelry in Broken Arrow, OK, reports a substantial profit increase within six months of implementation.
Alternative approaches include specially tagging and dispersing discounted items throughout the store, as mentioned by William Nordstrom of William Nordstrom Jewelers in Menomonee Falls, WI. Some opt for online clearance sales, as Sherrie Schilling-Devaney of Sherrie’s Jewelry Box in Tigard, OR, practices.
In summary, the survey results reflect the dynamic landscape of inventory management in the jewelry retail sector, with varied approaches to achieving sustainability, embracing technology, and adapting to changing consumer preferences.
