A Complex Combination of Qualitative and Quantitative Factors Drive Online Jewelry Sales
Ask any independent jeweler why a shopper would buy jewelry online, and they will give you a bewildered look. After all, this is a product category that is sold on emotion; further, it requires some technical expertise to explain to customers all about the diamonds and jewelry they are buying.
Unfortunately, shoppers don’t have the same reservations about buying online. Consumers cite many different factors that cause them to search the Internet for goods, as the following graph illustrates.
When it comes to purchasing jewelry online, Blue Nile, Odimo, and Abazias cite roughly the same list of factors, including the following:
Detailed information - Most online jewelers provide convenient access to extensive and consistent product information through their websites. This information helps to educate their customers on the general characteristics of diamonds and fine jewelry as well as the specific attributes of the items they are viewing.
Broad selection - Internet jewelers offer shoppers more than 50,000 - 70,000 high quality diamonds (depending on the merchant, this number may vary somewhat), the majority of which are independently certified by independent gemological laboratories such as GIA. These diamonds can be set in many styles including rings, earrings, and pendants. In addition, online merchants offer a selection (often limited) of fine jewelry.
Unique merchandise - Many online jewelers have created unique brands that are not readily comparable to store-based jewelers’ brands. Further, much of their jewelry is custom-made for distribution over the Internet.
Ability to customize - Jewelers’ online customers can customize their diamond jewelry purchases by selecting individual diamonds to be set in their choice of ring, earring or pendant settings.
Lower pricing - Internet jewelers can offer customers significantly lower prices than traditional jewelry retailers, primarily by eliminating most inventory and associated costs. Because of relationships within the diamond supply chain, most online merchants have established an efficient price structure. Many online jewelers advertise that their prices are as much as 1/3 lower that store-based jewelers. Based on the gross margin disparity between bricks-and-mortar jewelers and Internet jewelers, this claim is reasonable.
Knowledgeable customer support - Internet jewelers’ trained customer service staff is available to provide assistance to shoppers throughout the entire purchase process, creating a customer experience that instills trust and helps customers make informed purchasing decisions. Unlike many traditional retailers, most online jewelers do not compensate their staff on a commission-based system. Blue Nile emphasizes that buying fine jewelry without a relationship can’t be done online or any place, for that matter. Customer service is very important
Life time trade-up policy - Most Internet jewelers have some form of a lifetime trade up policy, which provides a guaranteed trade up of 80 percent-100 percent of the retail price of the original diamond purchase. This provides shoppers with an incentive to remain loyal customers in the future.
Free Shipping and 10-to-30 day return guarantee - Internet jewelers typically provide free shipping on their goods. Most diamond engagement rings are delivered by priority overnight delivery. Orders for in-stock, non-customized jewelry that are placed by mid-to-late afternoon are generally shipped the same day. Deliveries of customized diamond jewelry products typically take no more than 1-2 weeks. For most items, online jewelers offer customers an unconditional 10-to-30 day return policy.
Other amenities - Various online jewelers utilize other factors to create a competitive differential. For example, one jeweler claims to answer 85 percent of all incoming telephone calls in ten seconds or less. Another claims that goods are shipped when promised 99 percent of the time.
A High Quality Website Helps
JCOC research has done extensive research into what motivates consumers to buy from one Internet jeweler versus another. When asked about visits to Web sites selling fine jewelry, consumers cited the description of the product and the quality of the photos as the most important elements. The overall design of the site and the perks or special offers (free shipping, gift wrapping, etc.) were of much lower concern, according to JCOC.
Intimidation Factor Looms
For younger shoppers, their first encounter with a jewelry store can be intimidating. These young shoppers - mostly Milleniums (20-30 years old) -are part of the Dockers (khaki) and Polo (knit) shirt crowd, even at work. Jewelry stores are spit-and-polish operations, staffed by people in pin-stripe suits and starched white shirts with gold cufflinks. This may impress their parents, but it intimidates these young buyers.
In his book, Call of the Mall, Paco Underhill, the anthropologist of shopper behavior, talks about a jewelry store that is “comfortable” for female consumers. He describes it: “The windows are large, not particularly jeweler-like. The first thing you see is color, a kind of pinky-mauvey-rosy shade. It looks girly, and not in the best possible way. But there in the window, nestled among swirls and swaths and swoops of fabric, is jewelry. Inside are display cases at mid-thigh level (much lower than waist level in a typical jeweler’s store), and we see a pair of middle-aged women, extremely pleasant of face and form, wearing pastel-colored fuzzy sweaters – not at all the stylish keepers of the crown jewels. This is a store aimed only at women shoppers. Prices are moderate, perfect for the woman buying for herself or a friend.” This is an actual jewelry store in an undisclosed mall in the U.S. Underhill says jewelry stores are too stuffy.
In addition to a typical jeweler’s intimidating store and personnel, haggling (negotiating the price) may be a part of the jewelry purchase process. It is not in the culture of American consumers to haggle. Thus, most Americans are put off by haggling, even though it is done by virtually every major U.S. chain except Tiffany.
Even some of the aggressive sales techniques which jewelry sales people are taught can be intimidating. We all laugh at master sales trainer Shane Decker’s retort for customers who say “I’m just looking.” Decker says you should respond with, “That’s OK, I’m just selling.” What would my response be to that line? “That’s OK. I’m just leaving.”
IDEX SURVEY
IDEX magazine, with the help of Pricescope.com conducted a survey to find out about jewelry shopping on the Internet from the consumer perspective. The overwhelming number of answers we received talked about price, knowledge, selection, and trust. As one respondent wrote, “I did shop around at actual stores - but found their selection of the type of stone I was looking for to be minimal, their knowledge base to be shaky at best and their prices were higher than online.” Retailers, both on and offline, your customers are talking, are you listening?
Why do you shop on the Internet?
Some reasons are: knowledge, selection, price, and trust. The main reason is the people themselves, I didn’t buy from the store, I bought from people I consider my friends.
The prices charged at an actual store are many times higher and for lower-quality products. I also prefer not to be hounded by pushy salespeople while I browse. That’s a major pet peeve of mine; being hounded when I’m trying to shop.
I like to buy online because it is very convenient and you have access to a much greater selection that is usually in retail stores…I have also found the staff much more knowledgeable and the customer service better than any local places I have been in. Finally, there is the issue of price. While I certainly wouldn’t mind paying more locally if everything else was comparable, why would I pay more for less?
I like having lots of choices. I’m pretty specific about what I want, and the hunt for a specific item is part of the joy of purchasing for me.
Giving up on the ability to touch the piece of jewelry before buying is a disadvantage of buying off the Internet. What is the advantage that makes this sacrifice worthwhile?
For a lot of items it’s not much of a downside. If something doesn’t work out, there is always the return policy. It comes down to trust. Before I buy I know what I’m getting because I trust the people I’m buying it from and have established a relationship with them.
I can do as much research as I like, and I have pretty much switched to online vendors who are willing to supply various reports on a large purchase. Online retailers also tend to employ people who appear to be much more knowledgeable about the inventory than the salespeople I encounter at stores.
Working with a professional who knows what they are talking about, you would be surprised how many people in an actual store don’t know their product.
Better price. This is where trust is such a huge factor, as well as good internet pictures. A good return policy takes out any fear or uneasiness.
What was your experience of buying off the Internet?
I’ve returned a couple of items, but not because they weren’t as advertised. I had discussed if they were what I was looking for with the vendor and the vendor said let me ship them to you then you decide. So that’s what I did. It’s more of an issue with colored stones than diamonds. I’d say my return rate is less than 1 percent.
They were amazing. They went out of their way to help me find what I was looking for, held stones that I was interested in, sent wax molds of settings they thought I would like, and arranged to meet me outside of regular business hours so I could see what I was buying before I bought it.
Great. Much better than going to a store in person and being either hounded or rudely ignored by salespeople because I look young.
I have had very good buying experiences from all the people I have bought from, even eBay. Yes, there are some honest sellers on eBay.
How does the Internet compare to a traditional retail experience.
Much better. A lot of it is preference, I prefer email over phone or in person communication but if a local place has the service, selection and price I was looking for I’d buy there and do at times.
I believe it was beyond compare. I trust the people I dealt with - they are the owners of the business. They, more than any salesperson, have a vested interest in the success of every sale they complete. I have no doubt that if I hadn’t found what I was looking for they would have gone out of their way to find it for me. As for the ring itself, my dreams were brought to life - they had the ability to make what I wanted, exactly how I wanted it.
I prefer shopping online. The prices are much more competitive and you can look at several stones at once without security guards watching you closely. The service is much better than what I’ve personally experienced at traditional jewelry stores, and they’ve definitely won my trust through a combination of service, knowledge, and return policy.
In a retail store, I (a young female) am frequently either ignored or treated as ignorant. They rarely have the kinds of merchandise I want, both in quality and style… If the place down the street from me had knowledgeable, well-trained staff, excellent long-term service, and good selection (or willingness to track something down and get it if they don’t), then I would be happy to patronize that place. It would be nice to see and touch something before purchase, as well as be able to visit while out on errands. But I haven’t found that place yet, so I shop online.
I find the pricing better, the variety FAR better, the service easily comparable, and I actually trust the online vendors more. Their businesses are more transparent, so I think they try harder.
Would you buy from the Internet again and would you recommend it to others?
I would...and I have. I recommend [my online retailer] anytime I get the chance. I really enjoyed working with them. I believe this is a company that can be trusted, and I work hard to spread the word when I have found a business that deserves it. On the flipside, if they had been less than wonderful everyone would know that, too.
To me the alternative method is shopping in a local store, shopping online is the first place I look for diamonds, gemstones and jewelry.
I recommend everyone hit the local stores to check out the options. I think people can get some great ideas from looking around - but don’t buy at the mall. Hit the ‘net and shop around - use the Internet to your advantage - find some trustworthy sources, learn all you can learn, and make a great decision.
Source: http://www.idexonline.com
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