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Selwyn Brandt
Selwyn Brandt
 









 

Upkeep for the downturn

Dark economic times loom, but as SELWYN BRANDT argues, there are many things the industry can do to pick itself up during the economic slump.

Everyone connected to the jewellery industry has in some way been affected by the world economic situation. Our methods of doing business are already starting to change and will stay that way, at least until we move into another growth phase. Indeed, some experts believe that the way we do business will change forever.

The media has had a huge impact on consumer confidence, and much of the "doom and gloom" we read about is a result of this lack of confidence. The more we see this doom and gloom, the more it becomes a self-fulfilling prophecy.

Economic indicators in Australia show many things are not nearly as bad as other countries. Our banking sector is quite secure compared to America, for example.

We need to put a positive spin on things like unemployment. Yes, we have got around 6 per cent unemployment but this also means that there are 94 per cent of people who are employed. We should focus on that 94 per cent.

Let's use positive thought to influence the way we conduct business. We must examine our business very carefully, and develop new strategies that will give us the best opportunity for coming through the difficult times.

When we come out of this, we need to be positioned so that we can take advantage of that up-turn. The following are some ideas on how to do this.

Now that the Australian dollar is lower, there may be some opportunities for local manufacturers to re-develop a manufacturing base within Australia. With labour costs overseas going up, and the value of our dollar having dropped, it may no longer be so attractive to import. We should be encouraging local manufacturers to start producing again, by supporting them.

Next, try to avoid reducing staff where possible. If you have to cut hours, put some staff on part time, or encourage staff to take their outstanding leave. It is still better than firing people. As we know, it is difficult to find good people, and to then train them so they are efficient and productive. Use times of lower business activity to train existing staff even further, bringing them up to speed for when things do turn around.

The downturn is also an opportunity to examine stock. It's well known in the industry that many businesses are over-stocked, and this is the right time to reduce stock to manageable levels.

Perform an inventory and stock analysis. If you have some slow-moving items, you can do a promotion to clear these.

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Any really old jewellery may even be worth reconstructing. With the price of gold being so high, melting older stock to make new pieces could be a lucrative activity.

Moving stock creates space for fresh items. It also converts inventory into actual cash, helping maintain cash flow.

Maintenance and support received from suppliers is also an important consideration. We all rely on suppliers, so it could be a good time to strengthen supplier relationships by initiating open communication on issues.

Looking outside the business, it's also a good time to reinvigorate customer relationships. Make contact with customers who haven't purchased in a while to let them know of in-store specials, while offering cleaning and remodelling to regular customers.

By removing the obligation to buy, you make it easier for customers to come in - and eventually they will buy anyway.

We must think about the image we portray to these customers. If you are a wholesaler and have a showroom, now's a good opportunity to put it in order - to rearrange things, freshen it up, make it interesting and inspire your customers and staff. If you are a sales rep, re-organise and freshen-up your sample ranges.

If you are a retailer, rearrange stock so that it looks different even when nothing new is being displayed. Freshen-up displays by toying with lighting and props.

Let's ensure we keep our industry in the public eye, making sure that we step up and don't stop advertising, that we keep those brands alive, that we build relationships with our customers and suppliers, that we stay members of an industry body - all things that help keep our industry alive and in the forefront of people's minds when they're choosing how to spend their disposable dollars.

As the Australian economy, and most of our businesses experiences tougher times in the next 12-18 months, we can choose to be spectators or players. We can either watch what happens or do something positive. We must be proactive, rather than reactive.

 

About the Author

Name: Selwyn Brandt

Company: House of Jewellery

Position: CEO at HOJ and JAA finance director

Qualifications: FCIS, FIMM, Gemmologist

Years in industry: 30










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Wednesday, 17 July, 2019 08:22am
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