Hybrid ecommerce – the future of the jewellery industry
(A template for an ecommerce jewellery website – functionality is key)
Ecommerce has been slow to make a significant entry into the gemstone and jewellery market. However many industry analysts believe it is approaching a tipping point, beyond which it will gain significant momentum over the coming years. Indeed Forbes predict a doubling of the ecommerce jewellery market share (from 5-10%) between 2016 and 2020. Jewellery e-shopping is now more sophisticated, competitive and user friendly than ever before. Aided by the growing financial muscle of the computer literate and savvy millennials, they have developed beyond simple e-commerce sites to the stage whereby they offer a complete jewellery design, selection and buying experience. Research by McKinsey & Co in 2016 suggests that up to two thirds of retail jewellery shoppers conduct online research prior to making an in-store purchase, so those businesses with a ‘hybrid’ approach to the digital market place, including human interaction with friendly consultants, will benefit the most from their web infrastructure.
(Traditional jewellery skills are still in high demand but the channels to market are changing)
It is clear the that 21st century savvy consumer will not suffer fools gladly and the days of cheap, low quality jewellery offerings, such as the infamous ‘Ratners,’ are long gone. Shoppers don’t just want great quality, they also expect a fantastic online experience and they place a good deal of emphasis upon client testimonials, positive reviews and online security features (such as SSL certificates). The majority of online shoppers now browse with tablets and smart phones so the responsive optimisation of websites for these devices is crucial. Interactive push technology and apps are also starting to develop in the online jewellery sector. Bespoke designs are becoming increasingly popular and, as discussed in our earlier article, CAD is significantly aiding this process. People buy people and the level of personal interaction is crucial in a modern digital jewellery channel. In addition to CAD modelling, 3-D printing of an exact plastic replica of the piece to be created is becoming increasingly popular. This is largely replacing traditional wax modelling techniques.
(3-D printing is enabling engagement ring models to be produced before the actual ring)
The modern hybrid ecommerce jeweller operates a streamlined business model, in which they do not hold expensive stock or maintain costly retail premises. Ordering products Just In Time (JIT) from a close network of trusted suppliers enables the savvy operator to limit their overheads and deliver prices that are up to 70% lower than those of the traditional high street jeweller. It is clear that the ecommerce sector is booming and there’s no sign of that changing anytime soon. The forecasts for global online sales, across all sectors, for 2016 are a record breaking $1.85 trillion worldwide, roughly equivalent to the GDP of Italy! Much of the growth in e-business is being driven by the emerging economies, most notably India and China, where the take up of internet usage is rising at the fastest rate. In spite of the rapid adoption of ecommerce by most industries there are a few examples, including gemstones and jewellery, that have stubbornly resisted this near universal trend. Industry insiders site the reason for the slow development of the ecommerce market share of the jewellery sector as relating to the emotionally charged nature of the act of buying engagement rings, bridal jewellery and special gifts. As a consequence jewellers who wish to be successful online must approach this issue in a careful and sensitive way so as to mitigate the potential weaknesses of the digital channel in this arena.
(Global ecommerce is now worth $1.85 trillion per year, more than the GDP of Italy!)
Modern concierge jewellery is purveyed by small boutique or personal jewellers, characterised by small operators, relying to a degree on word of much and the offer of a more customer focussed experience. The rise of the internet has enabled these smaller actors to collectively challenge the dominance of the big global brands. Customisation is becoming increasingly important to the modern consumer. In a recent Bain & Co study it was discovered that one in four shoppers are interested in online bespoke jewellery options. It is the vast array of choice that is starting to sway the jewellery buyer towards online options, as it would be impossible for a traditional jewellery shop to stock the same volume of options. Akin to the direct to consumer business model adopted by Tesla in the electric car market, fine jewellery is now channelled directly in to people’s living rooms. In 2015 the number of online transactions initiated on a mobile device crossed the 50% point and is set to continue. Recent research by Google suggests that up to 82% of shoppers look to their phones for research prior to making a purchase.
(A traditional, now obsolete, ecommerce gem site with no personal touch!)
The whole buying experience is now coming into sharper focus as consumers turn to ecommerce to buy fine jewellery. Websites are becoming ever more sophisticated in terms of what they can do at the same time as increasing their ease of use and ‘ergonomics.’ The aim is to emulate a luxury in-store purchase with an online platform. Key to achieving this is very high resolution images, easy and logical navigation and user-friendliness. Competition is certainly growing in this space as jewellery retailers realise the potential for ecommerce in this market. This is good for consumers because it is increasing choice and value for money at the same time. The speed with which online collections can be refreshed and renewed will undoubtedly lead to a quickening of trends over time and this will result in a competitive advantage for the e-retailer over his or her traditional bricks and mortar rivals. The market share of online sales in the jewellery market is predicted to grow steadily over the next few years, at a time when professionaljeweller.com predict the overall gemstone and jewellery market globally will increase by over 30% between 2016 and 2020. Rapidly changing consumer tastes, coupled with technological advances are driving ecommerce jewellery forward.