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.
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
MajorsJan 09, 2026
Kendra Scott Taps Activewear Exec as CEO Chris Blakeslee has experience at Athleta and Alo Yoga. Kendra Scott will remain on board as executive chair and chief visionary officer.
SurveysJan 09, 2026
U.S. Holiday Retail Sales Up 4%, Visa, Mastercard SayThe credit card companies’ surveys examined where consumers shopped, what they bought, and what they valued this holiday season.
AuctionsJan 09, 2026
Christie’s Names New Global Managing Director for LuxuryKimberly Miller has been promoted to the role.
Brought to you by
Impacting Tomorrow TodayHow Jewelers of America’s 20 Under 40 are leading to ensure a brighter future for the jewelry industry.
CollectionsJan 09, 2026
Piece of the Week: Lionheart’s ‘Serenity’ Opal CharmThe “Serenity” charm set with 13 opals is a modern amulet offering protection, guidance, and intention, the brand said.
Weekly QuizJan 08, 2026
This Week’s QuizTest your jewelry news knowledge by answering these questions.
CollectionsJan 08, 2026
Pandora’s New ‘Bridgerton’ Jewels Celebrate Bees, Bows, and Blooms“Bridgerton” actresses Hannah Dodd and Claudia Jessie star in the brand’s “Rules to Love By” campaign.
Events & AwardsJan 08, 2026
Ana Khouri To Receive 2026 Gem Award for High Jewelry ExcellenceFounded by jeweler and sculptor Ana Khouri, the brand is “expanding the boundaries of what high jewelry can be.”
Brought to you by
Roseco Releases New Full-Line CatalogRoseco’s 704-page catalog showcases new lab-grown diamonds, findings, tools & more—available in print or interactive digital editions.
TrendsJan 08, 2026
Stuller’s Color of the Year Is a Stark Contrast to Pantone’s WhiteThe jewelry manufacturer and supplier is going with a fiery shade it says symbolizes power and transformation.
CollectionsJan 08, 2026
Gracie Abrams To Front New Chanel Jewelry CampaignThe singer-songwriter will make her debut as the French luxury brand’s new ambassador in a campaign for its “Coco Crush” jewelry line.
MajorsJan 08, 2026
Diamond Council of America Names New Board DirectorsThe nonprofit’s new president and CEO, Annie Doresca, also began her role this month.
Events & AwardsJan 07, 2026
Melee Adds 13 New Designers to NYC ShowThe trade show is slated for Jan. 31-Feb. 2 at The Lighthouse in New York City's Chelsea neighborhood.
TrendsJan 07, 2026
Amanda’s Style File: Go for GarnetJanuary’s birthstone comes in a rainbow of colors, from the traditional red to orange, purple, and green.
SourcingJan 07, 2026
Diamonds Do Good Releases 2025 Impact ReportThe annual report highlights how it supported communities in areas where natural diamonds are mined, crafted, and sold.
CrimeJan 06, 2026
2 Jewelers Arrested After TraxNYC Diamond District BrawlFootage of a fight breaking out in the NYC Diamond District was viewed millions of times on Instagram and Facebook.
MajorsJan 06, 2026
Rio Grande Says These Are the Top Personalization Tools for 2026The supplier has a curated list of must-have tools for jewelers doing in-house custom work this year.
MajorsJan 06, 2026
Zales Tests Out A New LookThe Signet Jewelers-owned store, which turned 100 last year, calls its new concept stores “The Edit.”
MajorsJan 06, 2026
LeachGarner Appoints New Director of SalesLinda Coutu is rejoining the precious metals provider as its director of sales.
SourcingJan 06, 2026
AGA Announces 2026 BoardThe governing board welcomed two new members, Claire Scragg and Susan Eisen.
TrendsJan 05, 2026
Amanda’s Style File: New Year’s EditionSparkle with festive diamond jewelry as we celebrate the beginning of 2026.
IndependentsJan 05, 2026
Jeweler Ben Nighthorse Campbell Dies at 92The master jeweler, Olympian, former senator, and Korean War veteran founded the brand Nighthorse Jewelry.
TrendsJan 05, 2026
Pinterest 2026 Trend Report: Brooches, Bold Gold, Cool BlueIn its annual report, Pinterest noted an increase in searches for brooches, heirloom jewelry, and ‘80s luxury.
MajorsJan 02, 2026
Marc Metrick Out as CEO of Saks Global Executive Chairman Richard Baker will take over the role as rumors swirl that a bankruptcy filing is imminent for the troubled retailer.
Events & AwardsJan 02, 2026
Jan Mohr, Couture’s ‘North Star,’ Dies at 71Mohr had just retired in June after more than two decades as Couture’s retailer liaison.
SourcingJan 02, 2026
IDCA Elects New President, Board of DirectorsShekhar Shah of Real Gems Inc. will serve as president of the Indian Diamond & Colorstone Association in 2026.
CollectionsJan 02, 2026
Lalaounis’ 2026 Good Luck Charm Speaks to ResilienceThis year’s good luck charm features the mythical horse Pegasus, and is our first Piece of the Week of the new year.
EditorsDec 31, 2025
The Top 5 Stories of 2025Articles about crime, engagement rings, and a necklace worn in the World Series generated the most interest among readers.
