Online retail shows no signs of slowing in '08
January 06, 2008
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| New Web site Vialuxe plans to offer a concierge-style service for consumers seeking luxury watch and jewelry brands. |
Although many jewelers remain reluctant to embrace e-commerce, jewelry experts project online sales will do nothing but rise in the coming years.
The Internet's increasing success in the retail arena is clearly reflected in the naming of "Cyber Monday," the Monday after Thanksgiving, which has become an online-sales litmus test on par with Black Friday for brick and mortars. In 2007, Cyber Monday sales hit $773 million, up 21 percent from 2006, according to ComScore Inc. And although jewelry retailers aren't the primary driver of those sales, they do play into the market.
For instance,
Diamond.com's traffic rose 58 percent on Cyber Monday, with a 65 percent sales increase reported too, according to
Shop.org, an online association for retailers. Luxury retailer
Tiffany and Co.'s e-commerce site continues to reel in holiday sales, and major diamond powerhouse De Beers opted to tap into the e-commerce market too this past year.
Scott Silverman, executive director of Shop.org, says online retail is simply still growing.
"The numbers we are seeing for the holiday season aren't giving us any indication that it's slowing down," Silverman says, adding that consumers opt to shop online primarily for convenience.
Despite the evidence suggesting the importance of businesses offering Web sites, not all retailers are going with the flow. Ben Janowski of Janos Consultants says the Internet is the only retail channel that is still growing by huge numbers, and he believes it's nonsensical for retail jewelers to choose to remain Web-free because they think customers won't consume online. Although Janowski acknowledges there are still consumers who won't shop online, he stresses the importance of the ones who will and projects the increase of jewelers' presence online.
Jewelers of America's (JA)
2007 Cost of Doing Business Survey revealed that the level of growth for jewelry retailers using the Internet has mostly leveled off, with 40 percent of retailers using the medium for promotional purposes in 2006—the same number that did so in 2005. More retailers are using the Internet to sell, however: 28 percent of those surveyed use the Internet for both promotion and sales, which is up from the 21 percent who reported doing so in the 2006 version of the report.
Bill Farmer Jr. of Farmer's Jewelry in Lexington, Ky., boasts an online site that offers both information about the store and the designers it carries, but currently does not offer e-commerce.
Farmer says consumers use the store's site instead as a research tool.
Unity Marketing's Luxury Tracking Study, conducted in October, revealed that luxury consumers are definitely using the Internet, but jewelry isn't their top shopping destination. When it comes to using the Internet to "support" purchases in the personal luxury categories, automobiles were the top draw for luxury consumers (68 percent of respondents seeking a car checked out automobile Web sites), but jewelry was the second to last (35 percent), trailed only by wine and spirits (11 percent). However, some 48 percent of luxury consumers turned to the Internet when considering a watch purchase.
Specifically, the study revealed that only a third of jewelry customers, 35 percent, used the Internet to support their purchases in the last three months, and of this number, 53 percent purchased goods over the Internet, while 51 percent used the Internet to compare prices.
Pam Danziger, founder of Unity Marketing, says she believes Internet sales will continue to increase since they currently constitute only a small percentage of overall retail sales. She says, however, that consumers tend to get more reluctant to buy when e-commerce ventures into too high of a price range.
Whatever the case, she says, retailers are foolish if they don't utilize an Internet strategy.
Innovative jewelry Web sites to help luxury consumers buy more easily are also springing up. ViaLuxe defines itself as a luxury Web site dedicated to helping consumers research, find and purchase luxury watch and jewelry brands.
Lawrence Kosick, co-founder of ViaLuxe (
Vialuxe.com), says watch and jewelry e-commerce is one of the fastest growing online categories. The ViaLuxe site offers product information—and even blogs—on various jewelry and watch brands, and directs consumers to authorized dealers to buy.
As the luxury industry grows, Kosick says discerning consumers will expect the same kind of service they receive when going into brick-and-mortar high-end stores, and therefore, believes in the importance of luxury sites boasting a concierge-type service too, which the site plans to add in the future.
Internet influence On average, 44 percent of luxury consumers made use of the Internet before making purchases (but didn't necessarily buy). Here's a breakdown by category.
* Automobiles: 68 percent
* Clothing and apparel: 56 percent
* Watches: 48 percent
* Fashion accessories: 47 percent
* Fragrance, cosmetics, beauty products: 45 percent
* Jewelry: 35 percent
* Wine, spirits: 11 percent
Source: Unity Marketing Luxury Tracking Report, 2007
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