The Cyber opportunity

Avi Krawitz

The online retail experience keeps reinventing itself almost with the pace and energy of ‎technology itself. Consider that Cyber Monday only became a referenced term in 2005 ‎and already feels a part of the U.S. holiday tradition. Along with Black Friday, it has also ‎become a barometer of consumer sentiment and an important avenue to seek out ‎discounts in a price-sensitive economy.‎

It seems this year online sales gained even greater traction.

The pace of ecommerce ‎growth continued at an impressive rate and naturally outdid its brick-and-mortar ‎counterpart. According to digital metrics firm comScore, online sales on Black Friday ‎rose 28 percent year on year to $1.04 billion and on Cyber Monday increased 17 percent ‎to $1.47 billion. On Thanksgiving Day, online sales grew 32 percent to $633 million. ‎

The numbers show that consumers are considering price points and convenience in their ‎shopping experience and are better informed to ensure both.
It’s easy to forget that many ‎of the mobile devices we take for granted today were not yet invented just a few years ‎ago.‎

In a very slight twist of irony for the jewelry industry, while many of those devices can ‎potentially enable better sales for the trade, they’re also among its biggest sales ‎competitors. For now, though, it’s worth noting that mobile technologies are having an ‎increasing influence on how consumers buy, if not in facilitating the sale itself.‎

A pre-Thanksgiving survey by BIGinsight on behalf of, a division of the National ‎Retail Federation (NRF), found that the number of shoppers planning to use their ‎smartphones or other mobile devices on Cyber Monday increased 14.4 percent year on ‎year to 20.4 million this year, up more than five-fold from the 3.6 million who did so on ‎Cyber Monday in 2009.‎

comScore estimated that while just 10 percent of ecommerce sales were made via ‎mobile devices in 2011, the number is expected to grow 30 percent each year thereafter. ‎IBM estimated that the percentage of sales conducted through a mobile ‎device this past Cyber Monday in fact jumped 96 percent from 2011 to 12.9 percent ‎overall.‎

Perhaps more significantly, however, Gian Fulgoni, comScore’s chairman, expects ‎mobile devices to have a bigger impact on the retail market as an important in-store price ‎comparison tool. “The consumer goes into a store, gets the touch and feel of the product, ‎takes up the salesperson’s time, and before you know it out comes a smartphone and ‎they’re doing price comparisons and even making their purchases online,” he told ‎Bloomberg TV this week. A February 2012 report by McKinsey & Company found that ‎‎69 percent of mobile users would delay buying or buy elsewhere after using their mobile ‎device in store to check on a product. ‎

Back at home, or in the office, the online experience certainly is a calm alternative to ‎store shopping, especially when the maddening holiday crowds are at their peak. That ‎would probably ring especially true for the mid-to-higher range jewelry consumer. ‎Websites have also upgraded to more efficient delivery and payment systems, helping to ‎raise confidence to buy online. ‎

The trend is therefore both daunting and exciting for retailers.

It challenges them as it ‎reduces their control over the sale and forces them to think beyond their traditional ‎business practices. It also presents a tremendous opportunity for retailers, or those ‎wishing to encroach on their space. Yet, comScore estimates that only about 10 percent of all ‎discretionary sales in the U.S. are currently made online, a relatively low amount. But ‎while the verdict is out on how much of the remaining 90 percent is up for grabs, there is ‎no doubt the online space will continue to grow for years to come.‎

Currently, the market is dominated by exclusive etailers, particularly Amazon, while the ‎supplementary websites of brick-and-mortar operations follow at a distant second. ‎Similarly in the jewelry space, Blue Nile enjoys significant market share while traditional ‎jewelers battle to compete on price and margin. ‎

Consumers are clearly getting used to buying jewelry online, breaking the “touch and ‎feel” attitude that many believed the industry would have to overcome. In fact, jewelry ‎and watch sales rose 17 percent this Cyber Monday to rank as the fifth top-gaining ‎product category behind digital content and subscriptions, consumer electronics, ‎computer hardware, and video games, consoles and accessories, according to ‎comScore. Not bad, considering the electronic theme of the top four. ‎

Jewelers have taken note and are pushing their platforms and their online product ‎‎assortments while developing their marketing strategies accordingly.‎[/two_third]

“Jewelers have taken note and are pushing their platforms and their online product ‎‎assortments while developing their marketing strategies accordingly.‎”


Blue Nile, which symbolically rang the bell to open trading on the NASDAQ exchange on ‎Cyber Monday, said it expects acceleration in the growth ‎of its non-engagement jewelry ‎during the holiday selling period. ‎Signet Jewelers, while reporting very modest overall ‎sales growth of 0.8 percent year on year in the third quarter, saw its online sales increase ‎‎35.2 percent to $19.6 million, less than 3 percent of their total sales. Similarly, in the Far ‎East, Chow Tai Fook noted that its online sales grew three-fold in the six months to ‎September 30, 2012.‎

Others see similar growth opportunities and are expected to up the ante in the coming ‎weeks as pre-Christmas shipping deadlines approach. ‎

Beyond their sales, many are effectively using online platforms such as social media ‎sites to promote their product lines. One social media analyst told Rapaport News that ‎while retailers are not necessarily selling their products on social media sites, they’re ‎certainly effectively using sites such as Facebook and Twitter to reach out to their ‎customer base. “They might post a picture of a product or event and it’s not unusual for ‎these to go viral among the company’s fans or followers,” he explained. What easier and ‎cheaper way to maintain a relationship with the customer? Tiffany & Co., for example, ‎has more than 3.2 million Facebook users who have “liked” its page.‎

The internet therefore continues to evolve and create new opportunities in the retail ‎space. While it may initially have presented a confidence barrier for consumers, ‎particularly jewelry shoppers, it now serves to give them added assurance to buy, ‎especially in the price-sensitive, tough economic conditions that exist today. As ‎consumers search for bargains, online is naturally their starting point, and increasingly, ‎their end destination. That leaves it up to retailers to use all avenues at their disposal to ‎catch consumers’ attention as they hope to squeeze out a successful conclusion to 2012.

Source Rapaport