The ComScore research company entered jewelry into the list of the most rapidly growing online products in the U.S.A. after their sales zoomed by 21% in the third quarter of 2007.
Taken as a whole, the amount of money spent for jewelry in e-tailing (excluding auctions and large-scale corporate sales) for the quarter ended in September rose by 23% up to $28.4 billion.
Video games, portable electronic devices and accessories are at the top of the list of most sellable goods demonstrating a growth of 199% against the similar period in 2006. Jewelry is in the ninth place.
During the first nine months of 2007, total retail sales of jewelry in the web grew by 21% (up to $83.58 billion) as compared with the same period last year.
Gian Fulgoni, CEO of ComScore, stressed that retail sales of jewelry in the web were growing in excess of 20% year over year and “this was far from being the limit.’
More and more buyers in India prefer to purchase online during the Diwali season (this year the Festival of Lights is celebrated on November 9). The Associated Chambers of Commerce and Industry of India (ASSOCHAM) expects that total online commerce figures will go up by 130% versus 2006 and will reach $146.33 million, since buyers prefer to make their purchases at home due to convenience and security reasons. It was assumed that online purchases would be made this year by three million Indians – one million more than last year.
According to ASSOCHAM, diamonds and jewelry will be among the goods, which will be in keen demand during the festival. Chamber President Venugopal Dhoot said that increased Internet purchases were exactly due to luxury goods and this was one of the intrinsic features of the Indian consumption market.
Luxury brands have not missed the expansion of e-commerce. The “Financial Times” reminds that De Beers started their Internet sales in June. “Sales have grown 65% each month,” says Guy Leymarie, Chief Executive of De Beers Diamond Jewellers. Mr. Leymarie said that starting their online sales his company had and example of Blue Nile, a website store, which sold more engagement rings last year than any other jewellery retailer.
According to Mr. Leymarie, his company recently sold a $1 million diamond piece via its web site. “The web is the market in the U.S.” However, the company has no plans so far to expand its e-tailing offering outside the United States.
Boucheron, however, is taking a worldwide approach: its online service is currently only available in Europe, but it plans to enter the U.S. and Asian markets.
It sells its entire offering of jewellery, watches and perfume online.
The company, according to its Chief Executive Jean-Christophe Bedos, decided a year ago to go online.
”In high luxury, there is still resistance to the web and e-commerce from many brands. When we did our research, we discovered that wealthy people have no taboo and no boundaries with regard to e-commerce. They often have access to the latest technology and for them time is a luxury and they find it easy to surf the web and find what they want.”
Bedos points out that the web offering will not replace retail and the integration of Boucheron’s retail network and its e-commerce is a cornerstone of this company’s strategy. On the one hand, while in a shop people may touch jewellery and watches and try them on; on the other hand, e-commerce offers privacy, intimacy and reachability, making goods accessible any time and anywhere.
Tiffany, which launched its e-commerce in 2001, recently updated its web offering. According to Melvyn Kirtley, president of Tiffany UK, his company’s idea was getting the customer into the Tiffany world. This is why the company is permanently working to improve the outer appearance of its website using new technology to saturate its content allowing more searches, more descriptions and more features that make it a pleasurable experience for users addressing the site. As with Bedos, Kirtley believes that online commerce and “live” visits to stores should all work harmoniously together.
All three of these popular brands report that they have experienced no price resistance when it comes to online retailing. This point is also sustained by Rebecca Clarke, Managing Director of UK-based on-line jewellery boutique. To her opinion, not only the volume of orders is shooting up, but also the average transaction value has gone right up and now 10 percent of their sales are above GBP 1,000. Rebecca Clarke points out that they would inevitably be a much smaller business without Internet, as their daily traffic comes not only from the UK, but also from Japan and California.
Though there are some restrictions in e-commerce (Tiffany, for instance, does not sell diamond engagement rings online), the major trend is that luxury brands aim to offer a web experience that is as close to the retail one as possible. Jean-Christophe Bedos emphasizes that Boucheron’s getting ready for e-commerce was not so much about what services should be offered online, but about services they already offered in their stores and about finding the right kind of technology to make this possible online.
One of the inevitable consequences of e-commerce joined by the jewelry industry is selling counterfeit goods, including at web auctions. Currently, Tiffany is engaged in active fighting against frauds.
Its lawyers accused eBay of allowing the sale of tens of thousands of pieces of counterfeit Tiffany jewelry on its web site.
The lawyers of San Hose-based eBay say in their turn that Tiffany is not doing its share to protect customers’ rights.
It has been reported that Tiffany authorized some people to buy randomly 325 jewelry items sold as genuine Tiffany jewelry on eBays’s web site. Of those, 75 percent turned out to be fake, they said.
Tiffany affirms there was no evidence that eBay did anything to stop the false sales after it reported its findings to the company.
However, the representatives of the Internet auction say that these violations should be attributed to hundreds of thousands of vendors offering their wares via the web site.
The hearings of Tiffany vs eBay started in New York on November 13.
Earlier this year, Tiffany already won a $1 million injunction in a counterfeit lawsuit against Starglam Inc. and its owner John Shamir for distributing fake goods.
