There are solutions.
I know this is such an ominous question, but it’s like the elephant in the room, someone has to ask it. Hard-core reality, yes, those in our Jewellery trade who reject technology will either retire or watch their business atrophy. The truth is as you guessed it the same will apply to other retail categories.
In Australia in 2016, 60 National Geographic stores closed, 27 Pumpkin Patch stores closed, 132 Payless Shoe stores closed, and even Woolies closed 17 stores. In an article in the Courier Mail in March last year a major liquidator identified 400 retailers in QLD alone were at risk of failure a number had a turnover in excess of 50 million, and 250 were turning over around the 1 million mark.
In the USA in the first quarter of 2016 the National Jeweller Magazine reported a 34% increase in Jewellery store closures.
In addition two of the biggest retailers in the USA ,Sears and Wal Mart closed 78 stores, and 269 stores respectively ( by the way Wal Mart is considered one of the biggest jewellery retailers in the USA).
Many like to argue that the sales on the web are mainly cheap stuff, and that’s probably correct to a degree. However when you see Blue Nile doing $500 million turnover, and James Allen another major online diamond retailer doing an estimated $150 million, you realize this isn’t correct, unfortunately my contacts have confirmed that both these online diamond sellers both consider Australia to be excellent market for them.
I previously wrote about Ebay who claims that they sell 6800 engagement rings per month to Australian’s, this was based on a poster they used as advertising on buses and street signs (Martin Place in Sydney), which equates to 81600 sales. The statistics of marriages in Australia are approx. 130,000 per year, you could argue that maybe they are exaggerating but you can’t argue, that these are crazy numbers. If these figures are accurate, then Ebay is responsible for 63% of engagement/wedding ring in the Australian market…. A very scary claim to say the least.
You note I made the comment that there are solutions. By this, I mean to reverse or stop the process.
The concept is Omni Channel. This is when a bricks and mortar retailers compliment their business with an online presence. When we use the term Omni channel it often means that you are using multi-channels. In other words, you will engage with your clients in a variety of social media and web platforms but the key is to create a seamless experience between those platforms and the bricks and mortar presence. When we all began to buy and sell on the web I was the first to say to retailers think of the their web business as a separate business, and run it that way. As the web has matured and business has changed to meet that shift, business must now look to amalgamate the two.
The easiest way to explain this in terms of jewellery is as follows: Let’s assume that a customer is looking to purchase a diamond ring. They might see a design that you’ve created on Facebook, click on it to take them to your webpage, look to choose a stone that suits their budget, and make an appointment to see it all in your store. As a sophisticated Omni channel, you would have the ability to identify where your client saw the Facebook posting, be able to capture some sort of profiling of that client, analyze what else on your webpage did they look at, and provide a very targeted and well-informed sales presentation once they’ve entered your retail establishment. All the tools to do this are available and economical, and no one who wants to build a successful business into the future can claim it’s out of their reach.
Is all your stock in a database that is easily searchable with a matching photograph? Whether customers are looking at you online or in the store, your sales team should be up to pick up a tablet and search the database to not only see the customer’s choices online, but to know if an item Jewellery or diamond is available or could be ordered instantaneously.
Both Blue Nile and James Allen have established physical outlets within department store chains, as they have understood the potency of having a physical retail presence, and they to appreciate the need for another point to interact with some of their potential customers.
Any product that can be commoditized can be easily compared, and hence shopped on price alone. It’s when you add the other components, those that we often talk about in jewellery, such as craftsmanship design, being able to show a customer the difference between a flimsy mass produced mount, and one that is substantial, and weighs 3-4 grams, that the interaction in a retail scenario is unbeatable.
The “branded retailer” or those who sell brands, have that unique position of not being seen as a commodity. I have often written about creating one’s own brand, but we all appreciate that can be a very costly exercise. It is becomes glaringly obvious that building the Omni Channel goes a long way to building a holistic business which integrates the online and bricks and mortar store. If planned and executed well, any and all retail jewellers can grow their business.
We as an industry must show flexibility and reinvent the jewellery retail experience. Our ability to demonstrate to the millennial consumer that we are listening, aware and understand that for them there are many ways to purchase Jewellery, is a key to success.
If you are a bricks and mortar retailer and are able to provide this seamless experience for a consumer to buy jewellery from you, you will build the trust and ease of doing business. The physical presence of your store is part of your offering.
Business is not easy, we all know it, but embracing these sort of changes will ensure jewellery retail is far from dead.