While my kids were growing up one of the favorite stories I most loved to tell them was the tortoise and the hare. You’ll know the story well enough to know the moral – slow and steady ultimately can win the day over the fast and more glamorous alternative.
For many store owners the tortoise part of their business can be repairs – it normally has a low average sale, can be time consuming and leads to the greatest number of complaints and returns when the repair mysteriously “broke” shortly after it was completed!
There’s no doubt diamonds are, and should be, a big part of your business. As I like to emphasize diamonds can be as little as 2% of your staff selling time but contribute 50% of your store sales. They are important and should be encouraged at every opportunity.
But the slow and steady business that repairs can bring are crucial to your store too. Repairs are an important but often neglected part of most stores’ business. Are you taking advantage of the benefits that repairs can offer you? These are the main advantages that repairs have to offer:
- Drive strong foot traffic particularly during quiet times. The opportunity to sell to customers already in your store is sorely neglected by too many retailers. The fact remains that having a customer standing in front of you is the most effective opportunity to market you will ever get, regardless of the reason they came in.
- An easy way to build your clients database. There are still many store owners who tell me they don’t have a database, yet a quick view of their storage area will show hundreds of repair books containing the name, address and phone number of every repair they have done in the last 20 years! This is gold and needs to be treated as such. A database is not only invaluable for current sales but is a marketable commodity when the time comes to sell your business.
- A chance to show your other products. This is re-emphasizing point 1, but having them stand in front of you is not enough. Is your staff trained to show product to customers who have come in for a repair? Even a simple “look what’s just arrived in, don’t you just love it?” is a step in the right direction.
- A profitable sale that you don’t have to discount. The fact is that repairs are one of your least competitive areas. Most people will shop around before buying a diamond ring, but not so many tend to do the same when it comes to repairs. Even larger repairs can be immune to price shopping by customers – often the very same customers who will argue a product item down to the last 10 dollars!
- Strong margins. Hand in hand with reduced discounting comes profitable margins. Repairs can be one of the highest margin offerings in your store and this is a great way to lift your overall business profitability.
- Wage absorber. Staff can have a lot of down time and there is only so much product to clean. Repairs can be an effective way of covering wage costs for a business thanks to their ability to keep staff occupied in profitable endeavors. Cleaning product does offer an intangible benefit, but taking in repairs is money for time.
Compare your repair statistics with those of your fellow group retailers. How many repair customers do you have per year? Each customer often represents two visits: one to drop off the item and one to pick it up again. What are you doing to get your product in front of these customers during each of these occasions?
How does your repair mark up compare? As stated above this is an area that you will seldom be comparison shopped on and asked to discount. An increase in mark up of 10% can make a significant impact to your bottom line. Could your repairs be more profitable than they currently are?
David Brown is President of the Edge Retail Academy, an organization devoted to the ongoing measurement and growth of jewelry store performance and profitability. For further information about the Academy’s management mentoring and industry benchmarking reports contact email@example.com or call 877-569-8657.