Abbott Jewelry Systems Blog

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Angela Chiaravalle

Angela Chiaravalle's Blog


How Savvy Retailers Accomplish a Balance Between Fashion + Sell Through by Dick Abbott


Amaze Your Clients on Every Visit

Many of your customers visit your store regularly to see what’s new. Consumers are driven by the joy of discovering what’s fresh and different. They want to be the only one wearing the new necklace at the club.

Successful jewelers stock a fresh set of items in categories important to clients. We want them to be amazed by new pieces every time they visit.

It’s a challenge for a buyer to select new inventory that ‘sells through’ fully and rapidly.

The key for the retailer is to maintain this stock of new merchandise but keep the inventory of fashion pieces in line with sales.

How do savvy retailers accomplish this?

Buy different items in key categories

Your store has specific product categories that are most important to your customers. Most of your sales will come from these 8-10 categories. You should know these ‘sweet spots.’ If you don’t know the latest top-selling areas, run The Edge Inventory Performance reports. You’ll know in minutes.

You’ll want to have fresh merchandise in these vital categories.

The key for this product grouping is to order different pieces within the category to maintain newness.

Unlike Fast Sellers where you reorder the same sku every time, we’ll focus on new exciting pieces within high performing categories/cost ranges.

Measure GMROI

The key is being disciplined in your spending within your categories and overall inventory.

  1. Have an open-to-buy for each category. Don’t keep spending on pieces in a category/cost range when you are overbought.
  2. Measure your GMROI (gross margin return on investment) for the category/cost range. GMROI is a ratio that analyzes your store's ability to turn inventory into cash above the cost of the inventory. GMROI is considered the most valuable metric by professional inventory managers.

    The GMROI will indicate your profitability for each category – answering whether you should invest more or less in stock in this area. The average jewelry store has a GMROI of 65. There will be category/cost ranges performing above and below your stores average.

    The key to good inventory management is to feed the high GMROI category/cost ranges and minimize the buying of low GMROI segments.

    TIP: Feed high GMROI segments with a variety of new styles. Studs and huggies don’t appeal to everyone. Buy them because they are known to sell but introduce other styles in high GMROI segments.

Successful inventory management of Moderate Sellers boils down to keeping your display cases fresh but your being disciplined with the level of your stock across key categories.

In sum, your ability to wow your customers with fresh products needs to be balanced with buying discipline and metrics like GMROI. The Edge provides you the tools and insights to achieve this goal.



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