By Jennie Pastor, Kavador
Jewelry stores in the U.S. and Canada face intense challenges, including costly staff and insurance, high capital tied up in expensive inventory, and of course the fall in in-store traffic as sales and consumers move online. According to industry data, nearly 1,200 retail fine jewelry stores closed in 2016, an increase of more than 50% from the prior year.
Jewelers that want to face down these challenges are often looking to establish their own online presence. While there is significant potential for online fine jewelry sales (online fine jewelry sales are growing at a rate of 10%-15% per annum compared to an overall market growth of only 3%-5% per annum), creating and operating a web site to drive high-end e-Commerce requires marketing, design, and operational expertise as well as significant investments in capital and time. Here are some of the core issues and best practices:
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Building Brand Trust Is Difficult
A local jewelry store relies on the trust it has built with its customers, typically through live personal interactions. Fine jewelry customers are generally not gem experts — they trust that the store is selling them real gold and real diamonds, not imitations. When that store moves online, it must convey this same level of trustworthiness to a much broader online audience. To build this trust, jewelers can use smart media placements, display trade organization badges and partner with larger companies with established web presences. Online jewelers must also offer free shipping and returns as a symbol that they stand behind every product.
Standing Apart
There are of course a few “big brand” jewelry stores, but these are the exception. The retail fine jewelry industry is very fragmented, with more than 15,000 independent stores in the U.S. alone. A single store that takes the time to build a web site will be competing with not only the big brands, but also large general e-Commerce companies that also offer fine jewelry. Creating market differentiation requires an online store to develop a compelling “story” that describes its unique offerings or business history.
Photography Makes The Difference
Any retailer that moves online quickly learns that “presentation sells.” Online retailers, particularly high-end retailers, must only include professional and crystal-clear product photos. Buyers that are presented with amateurish photos taken on the jewelry case counter will likely not be inclined to place their trust with the online store. Professional photographers should shoot each piece from multiple angles and provide styled shots on live models to show scale.
Digital Marketing Necessities
The big brands spend massive sums on multi-channel advertising, PR, paid search, and the very best sites and apps. Independent retailers do not have the budgets to participate in costly marketing activities, especially if they try to reach a broad audience. Smaller budgets are only effective when they are used efficiently, so independent stores must allocate funds wisely by targeting online advertising efforts to specific consumer demographics.
Data Rules The Day
The big brands such as Walmart or Amazon rely heavily on data analysis to present shoppers with an improved and intuitive experience. Small independent jewelry stores can mimic the big players by using tools that provide them with data about the demographics and behaviors of web site visitors and buyers. While this sounds easy, most retail jewelers do not have the time to learn an analytics platform, so they instead rely on intuition and trial-and-error. This is a costly way to use data.
The Third-Party Aggregator Option
Faced with the realities and immense competition of online selling, many retail jewelers abandon plans for a viable web site and either concentrate on brick-and-mortar sales or go out of business. Another option is to partner with an established online storefront company that aggregates inventory from small stores. These aggregators should provide sophisticated digital marketing, professional photos and dynamic data analysis. The best of these aggregators understand the luxury jewelry market and how important trust and reliability are for jewelry customers.
Jennie Pastor, CEO of Kavador, was born with an eye for glittering beauty and a family history in fine jewelry, and was disappointed by the mass-produced and overpriced fine jewelry available online. She started Kavador to make this right — to create an accessible and transparent online fine jewelry marketplace, with pieces curated from the vaults of high-end jewelers and collectors, bringing these treasures to light at extraordinary value.
