Internet Does Not Give Ground

According to a Jewelry Consumer Opinion Council (JCOC) study, the Internet is a way of life for 95% of those polled, says the Israel Diamond Industry Portal. Exactly 70% of panel members use the Internet several times a day or more and 25% use the Internet at least once a day.

When analyzed by age, the results indicated that 28% of the engagement-age group (18 – 39, which is marriage age) indicated they shop online and were more likely than other age groups to prefer shopping at the BlueNile, eBay and Amazon websites featuring engagement jewelry.

The 60+ age group showed that when purchasing from a well-known retailer, more than one third preferred purchasing from that retail store’s website as opposed to in-store.

Google is the most commonly used search engine when searching for fine jewelry. Another 11% of those polled stated they use multiple search engines when searching for fine jewelry online.

Some one-third of panel members have purchased fine jewelry online with Internet auction sites, the most common choice for online shoppers.

In two JCOC studies conducted in 2008, 4% more panelists purchased fine jewelry online compared to 2006. This would mean that ‘early adaptors’ have used the Internet to purchase fine jewelry but the rest of the consumer base is using the Internet but not being drawn into buying fine jewelry online.

Liz Chatelain, President of MVI Marketing Ltd., stated: “With 95% of people online daily this shows us that the Internet is not a fad that will be diminishing any time soon.”

Chatelain added: “We believe that consumers are looking to buy, and would buy, more jewelry products online if there were more well-designed, comprehensive e-commerce sites available to them.”

More than half of the respondents have spent between $101 and $500 on a single style of fine jewelry online and 84% of the respondents are satisfied or extremely satisfied with the quality of their online jewelry purchases.

Amazon.com has been elected consumers’ top choice and no. 1 online jewelry retailer for the second year in a row, according to Stores magazine.

Stores and Big Research’s annual list named online jewelry auctioneer eBay as no. 2, and retail giant Walmart as no. 3.

 

Wall Street's credit crisis and softening consumer spending are weighing on online jewelry retailer Blue Nile Inc., Chief Executive Diane Irvine said speaking at the Thomas Weisel Consumer Conference in New York, according to Associated Press. Irvine said international sales accounted for just 11 percent of second-quarter revenue, leaving the company "very much impacted by the U.S. economy."

"Growth is more difficult this year," Irvine said.

A tighter credit environment is hurting purchases of high-ticket items. Irvine said the company's average engagement purchase is priced around $6,000, while other average purchases run between $2,000 and $3,000. Most of the company's business takes place with credit.

"Certainly the credit environment has an impact on a high ticket purchase," Irvine said. "I think the real issue is credit card limits coming down in the U.S."

However, Irvine said Blue Nile still remains popular with consumers because the company sells diamonds at 20 percent to 40 percent below prices at traditional brick-and-mortar stores. Blue Nile also recently launched a financing option with Bill Me Later, which allows shoppers to buy items without having to use a credit card.

The U.S. jewelry market is sizable, standing at nearly $60 billion, Irvine said, with more than half of the figure coming from diamonds.

Irvine said the company's fourth quarter is the highest volume period for Blue Nile because Christmas is the peak time to get engaged, followed by Valentine's Day in the first quarter.

In August, Blue Nile reported better-than-expected second-quarter earnings, but profit still came 15 percent in below results a year ago.

 

The RAPAPORT news agency said online jewelry seller Bidz.com launched a complete Arabic-language version of its online auction site. The company has also hired Arabic speaking marketing personnel to better assist this emerging marketplace of 400 million consumers.

It is expected that the majority of sales conducted in Arabic will come from the Middle East, which includes two countries, United Arab Emirates and Saudi Arabia, that already rank in Bidz.com’s top ten countries by sales.

Bidz.com derives approximately 25 percent of its revenue from outside the U.S., and international revenue grew 56 percent in the second quarter of 2008. Bidz.com launched a Spanish language version of its online auction site in May of 2008.

“We believe that the demand for jewelry in the Middle East is among the strongest in the world, and see the Arabic translation as a tremendous growth opportunity for the company,” Bidz.com’s spokesman said.

 

According to Jewelry Television’s spokesperson Kelly Fletcher, the home-shopping channel, which reaches 71 million US homes, is not expecting any growth this year, the Israel Diamond Industry Portal reports. Last year’s sales reached about $500 million.

In order to facilitate interest, the channel is launching a high-definition version this month and polishing its on-air graphics.

New financing options will also be offered for jewelry purchases, including a “Bill Me Later” deferred-payment program, a preferred-customer credit card and a buyer-protection plan.

The channel also plans to sell home-jewelry-making kits and collectible holiday ornaments with gemstones.

Flethcer stated that because sales across the board for electronic retailers are down, the channel is looking for new revenue streams as well as new ways to reach customers and a younger demographic. “We believe HD is going to do that,” Fletcher said.