One retailer's holiday postmortemby
Jeremy Shepherd, founder of PearlParadise.com, sends a note about how his holiday sales wrapped up. Throughout the season, the trend he saw was growing sales volume, but lower average amounts for each order. While he says he had a strong finish and a profitable season, the trend puts pressure on his margins.
Continuing this trend, you will see us continue to streamline our production while focusing on increasing the number of products with a high value but lower-cost range. Further, our focus will be on increasing volume to make up for the drop in value average by strong marketing to value-conscious consumers and past loyal customers, as well as focusing more attention on comparison shopping engines and feedback-centric sites like Amazon (we’ve just partnered with them).
This is bad news for some of our suppliers from whom we typically buy a large volume of high-end materials from every year in January. These are pieces that sell in the $10k to $25k range. While there is still some demand for these pieces, our current stock is sufficient to last (if this trend continues) well into 2009.
Thanks to Shepherd and the other retailers who helped give us an on-the-ground look at this season, which saw the first ever drop in online holiday sales. For a micro view of how that drop affected on retailer’s numbers, Shepherd shares his figures after the jump:
Retail Sale Comparisons
2008 vs. 2006 Volume increased by 89.88% Value decreased by 56.51% Average sale in Dec., 2006 was $688.01. Average sale in Dec., 2008 was $299.21 Overall, gross revenue dropped by 17.42%
2008 vs. 2007 Volume increased by 16.25% Value decreased by 30.35% Average sale in Dec., 2007 was $428.59 Average sale in Dec., 2008 was $299.21 Overall, gross revenue dropped by 19.08%