ColumnistsAug 23, 2022
The Smart Lab: How To Plan An Effective E-Newsletter StrategyColumnistsSep 14, 2022
On Data: Retailing in a Recession
Current jewelry sales trends portend tougher days ahead. Sherry Smith shares six things retailers can do to make sure they are ready.
Sherry Smith is director of business development for data and consulting company The Edge Retail Academy. She can be reached at sherry@edgeretailacademy.com.
In the article “Navigating inflation in retail: Six actions for retailers,” McKinsey & Company states, “Retailers are facing the possibility of persistent inflation—but they can meet that challenge in ways that streamline operations, retain customers, and drive profitable growth.”
Despite the National Retail Federation’s decision to stick with their original projection of 6-8 percent growth in retail sales for 2022, there remains a great deal of uncertainty in today’s economy.
If there is, in fact, growth, we know it will not apply equally across all retail sectors. This is all the more likely for the jewelry business, given the record-setting year in 2021.
The indicators of tougher days ahead can be seen in the numbers.
The last few months have seen a decline in units sold and, for the first time since the onset of the pandemic, a slight decline in gross sales despite the price increases that helped prop up gross sales in the earlier months of the year.
Nonetheless, there are concrete actions retailers can address to help navigate potentially choppy waters in the coming months.
Here are six areas we would suggest you should examine to maximize returns.
1. Expect more from your inventory.
Inventory is one of your biggest costs, and you might potentially see a slowdown in turn during a recession. However, it is precisely at times like these that you should measure your inventory turn and hold yourself to the highest possible standard.
Converting inventory into cash can be a real salvation in more challenging economic times, and there are two tenets that should not be compromised if you are to do so effectively.
The first is that you should never be out of stock on your best-selling products. They are the lifeblood of your business, even as some retailers become bored with products often not deemed to be “sexy enough.”
Sexy is a profitable business and a well-managed inventory.
The second area is to not be shy about aggressively moving out slow and/or discontinued products or brands. This is not the time to be tentative in liquidating slow-moving products or struggling to let go of buying mistakes of the past. There’s a reason it didn’t sell, so move it on.
A better stock turn creates positive cash flow, and no business was ever less well-off for being profitable.
2. Have a slush fund.
We strongly recommend retailers have a business savings or emergency account. You should have enough cash on hand to cover at least six months’ worth of operating costs, including payroll.
If you don’t have a slush fund, start one today by putting a percentage of every deposit into your business savings account. You’ll be surprised how quickly this can become an ingrained habit.
Although retailers will often say they can’t afford to do this, I would strongly argue that you can’t afford not to do this.
Related stories will be right here …
Despite the National Retail Federation’s decision to stick with their original projection of 6-8 percent growth in retail sales for 2022, there remains a great deal of uncertainty in today’s economy.
If there is, in fact, growth, we know it will not apply equally across all retail sectors. This is all the more likely for the jewelry business, given the record-setting year in 2021.
The indicators of tougher days ahead can be seen in the numbers.
The last few months have seen a decline in units sold and, for the first time since the onset of the pandemic, a slight decline in gross sales despite the price increases that helped prop up gross sales in the earlier months of the year.
Nonetheless, there are concrete actions retailers can address to help navigate potentially choppy waters in the coming months.
Here are six areas we would suggest you should examine to maximize returns.
1. Expect more from your inventory.
Inventory is one of your biggest costs, and you might potentially see a slowdown in turn during a recession. However, it is precisely at times like these that you should measure your inventory turn and hold yourself to the highest possible standard.
Converting inventory into cash can be a real salvation in more challenging economic times, and there are two tenets that should not be compromised if you are to do so effectively.
The first is that you should never be out of stock on your best-selling products. They are the lifeblood of your business, even as some retailers become bored with products often not deemed to be “sexy enough.”
Sexy is a profitable business and a well-managed inventory.
The second area is to not be shy about aggressively moving out slow and/or discontinued products or brands. This is not the time to be tentative in liquidating slow-moving products or struggling to let go of buying mistakes of the past. There’s a reason it didn’t sell, so move it on.
A better stock turn creates positive cash flow, and no business was ever less well-off for being profitable.
2. Have a slush fund.
We strongly recommend retailers have a business savings or emergency account. You should have enough cash on hand to cover at least six months’ worth of operating costs, including payroll.
If you don’t have a slush fund, start one today by putting a percentage of every deposit into your business savings account. You’ll be surprised how quickly this can become an ingrained habit.
Although retailers will often say they can’t afford to do this, I would strongly argue that you can’t afford not to do this.
3. Always operate within your budget.
Retail owners understand more than most just how challenging it is to create an annual budget.
Nonetheless, it is a vital tool that should factor in historical sales, your marketing calendar, your fixed and variable costs, and gross margins.
Also, you will want to make sure you factor in anomalies such as a one-off large sale from the previous year, an inventory reduction sale that will not be repeated, business interruptions due to remodeling within your store, or external construction projects that might negatively impact your business.
Your annual budget goes hand in hand with a cash flow projection. You need to plan for the months that have a negative cash flow by utilizing a line of credit, and/or proactively and respectfully negotiate for longer payment terms from your vendors.
Following a budget can present opportunities to identify and cut costs.
4. Don’t stop advertising.
When sales decline, there is often a knee-jerk reaction to slash marketing spend.
However, this can be a great opportunity to build your brand awareness, and at a more favorable price, when your competitors are sitting on the sidelines waiting for the storm to pass.
Be sure to adjust your marketing efforts to meet current consumer habits. Today’s consumers shop across multiple channels, so you need to be more strategic with your targeted messages to stay top of mind.
Maintain regularly scheduled communications such as email, social media, texts, and more traditional vehicles such as billboards (if they work in your market) and a structured system of phone outreach.
Most importantly, you must track your marketing results; don’t fall for the fallacy that marketing results cannot be measured.
You should measure the key performance indicators (KPIs) of your marketing, and you should only continue with the campaigns that are achieving the desired results.
If there are any flippant takeaways from a marketing perspective it is this: no marketing or lousy marketing efforts will deliver lousy results.
Editors' Picks
Sponsored by
5. Be customer-centric.
Loyal customers are the lifeline of a retailer’s business, but the relationships must be nurtured.
Customers aren’t always excited about shopping around. They would prefer to go to retailers they know, trust, and have a relationship with, especially in times of uncertainty.
Existing customers also purchase more often and typically spend more per transaction than new customers. However, you must have a clienteling strategy in place because sometimes, all customers need is a little nudge.
For those retailers who don’t have a loyalty or rewards program, there’s no better time to introduce one than during an economic downturn.
There are good systems available so make sure to talk to your peers, mentors, or business advisers for help.
6. Assess your workforce needs.
It is imperative that you have top talent in the right positions at all times, but never more so than when business is more challenging.
While cross-training can benefit many businesses, it doesn’t always serve the retail store or your customers well.
For example, having administrative/support staff help on the floor with customer overflow is an OK stop-gap measure, but isn’t necessarily in the best interest of your business. Those interactions typically result in a close rate that is below reasonable expectations and an average ticket that will hurt your business.
When foot traffic is down, you must put your customers in front of your strongest salespeople to ensure the customers’ needs and wants are met in a meaningful way that is good for your customers and good for your business.
Ultimately, there is no higher goal in running a retail store.
Loyal customers are the lifeline of a retailer’s business, but the relationships must be nurtured.
Customers aren’t always excited about shopping around. They would prefer to go to retailers they know, trust, and have a relationship with, especially in times of uncertainty.
Existing customers also purchase more often and typically spend more per transaction than new customers. However, you must have a clienteling strategy in place because sometimes, all customers need is a little nudge.
For those retailers who don’t have a loyalty or rewards program, there’s no better time to introduce one than during an economic downturn.
There are good systems available so make sure to talk to your peers, mentors, or business advisers for help.
6. Assess your workforce needs.
It is imperative that you have top talent in the right positions at all times, but never more so than when business is more challenging.
While cross-training can benefit many businesses, it doesn’t always serve the retail store or your customers well.
For example, having administrative/support staff help on the floor with customer overflow is an OK stop-gap measure, but isn’t necessarily in the best interest of your business. Those interactions typically result in a close rate that is below reasonable expectations and an average ticket that will hurt your business.
When foot traffic is down, you must put your customers in front of your strongest salespeople to ensure the customers’ needs and wants are met in a meaningful way that is good for your customers and good for your business.
Ultimately, there is no higher goal in running a retail store.
More on Columnists
The Latest
WatchesSep 25, 2026
Smaller Rolex Watches Showing Strength on Secondary Market, Data ShowsFive of the 10 fastest-appreciating Rolex models on Bob’s Watches were Datejust 31 or Lady Datejust watches.
MajorsSep 25, 2026
Sherwood Family Buys Back Daniel’s Jewelers from Private EquityThe Sherwood family and AJS Creations CEO Tejas Shah purchased the jewelry chain back from Palladium Equity Partners.
Lab-GrownSep 25, 2026
Brilliant Earth Collabs with Elizabeth Taylor Estate on Jewelry Collection“The Elizabeth Taylor Collection” uses lab-grown diamonds and gemstones in contemporary designs inspired by the icon.
Brought to you by
Meet Gemology’s Next Generation Microscope: GIA® Gemolite® NXT Professional EditionExperience gemstones with greater precision and comfort than ever before.
TrendsSep 25, 2026
A Peek at Taylor Swift’s Game-Day DiamondsThe artist wore Dana Rebecca Designs’ marquise diamond-set gold hoops at the Chiefs game last Sunday. Now they’re our Piece of the Week.
Weekly QuizSep 25, 2026
This Week’s QuizTest your jewelry news knowledge by answering these questions.
CrimeSep 24, 2026
From Conclave: Security Measures Jewelers Should Be TakingJSA and Jewelers Mutual shared advice on spotting suspicious behavior, combatting cell phone jammers, and staying safe at home.
Brought to you by
Your Piece Could Be the One Editors Talk AboutSubmit your pieces for a chance to win in this year's competition.
AuctionsSep 24, 2026
8-Carat Blue Diamond Heads to UK Jewelry AuctionThe fancy light blue diamond is estimated to fetch up to $2.6 million at Elmwood’s next week.
TrendsSep 24, 2026
This New Jewelry Book Decodes the Secret Meaning in Victorian Jewelry“Secret Language of Victorian Jewelry” unveils the meaning behind the symbols, motifs, and gemstones used in Victorian-era jewelry.
Lab-GrownSep 24, 2026
Kira Jewels Opens B2B E-Commerce Portal for Lab-Grown Diamond Jewelry KIRAJewels.one gives retailers access to more than 500 SKUs of lab-grown diamond rings, earrings, necklaces, and bracelets.
TrendsSep 23, 2026
Holiday Diamond Jewelry Trends: Layered Looks, PersonalizationThis holiday season, look to pieces that will help to fill out customers’ everyday diamond jewelry wardrobe, experts say.
SourcingSep 23, 2026
Organization That Promotes Natural Diamond Rebrands for Third Time The Natural Diamond Council is now The Diamond Collective and has announced a new strategy under CEO Amber Pepper.
IndependentsSep 23, 2026
This Milwaukee-Area Jeweler Is Serving the 7CsPaul’s Jewelers sells coffee, chocolate, and cookies from a custom gold-wrapped trailer parked outside the store starting at 7 a.m.
MajorsSep 23, 2026
Kay Jewelers’ New Campaign Goes ‘All In’ on LovePart of its brand relaunch, the marketing around the campaign includes a contest involving a jacket set with 550 diamonds.
Events & AwardsSep 23, 2026
Tiffany & Co. Exhibition Opening at Arkansas Museum The curation, opening soon at the Crystal Bridges Museum of American Art, honors the jeweler’s heritage through a distinctly American lens.
CollectionsSep 23, 2026
Pucker Up for Pandora’s New Pat McGrath Jewelry CollabThe jewelry giant has partnered with the famed makeup artist to create a colorful new collection of charms and rings.
IndependentsSep 23, 2026
Texas Jewelers Association to Celebrate 120th AnniversaryThe association will mark the milestone at its convention next month.
IndependentsSep 23, 2026
Sissy’s Log Cabin’s ‘Back to School and Bling’ Event ReturnsThe jeweler donated school supplies to Memphis, Tennessee, students during the event combining basketball and mentorship.
MajorsSep 22, 2026
Foundrae’s Lawsuit Against Pandora Can Continue, Court RulesA federal judge denied Pandora’s motion to dismiss Foundrae’s claim for copyright infringement of its medallions.
IndependentsSep 22, 2026
Constance Polamalu Named to '40 Under 40' ListThe Baltimore Business Journal recognized the entrepreneur for her leadership in business and the jewelry industry.
GradingSep 22, 2026
GCAL by Sarine Opens New Lab in MumbaiThe facility is located within SEEPZ and is GCAL by Sarine’s second location in India, joining its existing grading lab in Surat.
Events & AwardsSep 22, 2026
NYCJAOS Returns for Autumn EditionThe four-day show is slated for Nov. 19-22 at the Metropolitan Pavilion in New York City’s Chelsea neighborhood.
AuctionsSep 21, 2026
Ultra-Rare Cartier Cheich Watch Sells for $3.4M Offered at Sotheby’s Hong Kong, the one-of-a-kind white gold watch now holds the title of most valuable Cartier wristwatch sold at auction.
MajorsSep 21, 2026
Longtime Industry Executive Pamela Bernstein-Gulla to RetireBernstein-Gulla has been working in the jewelry industry for 40 years, most recently as chief engagement officer for Hill & Co.
IndependentsSep 21, 2026
Bhindi Jewelers Moves Into New, Larger California StoreThe relocated Glendale store, now at The Americana at Brand, was designed to be a contemporary “timepiece haven” inspired by luxury resorts.
AuctionsSep 18, 2026
7.52-Carat Unheated Paraíba Tourmaline Sells for $1.3M at Sotheby’s The top lot of the auction house’s Hong Kong jewelry sale was an Art Deco Mauboussin necklace with ruby beads, which sold for $2 million.
