One year ago or so discussing how to use the Internet for jewelry purposes was to a great extent a hypothetical talk. However, during this time the situation was significantly changed. Now we may not only speak of the Internet turning into an in inalienable part of informational, advertising and commercial space for the jewelry industry, but there is a good possibility to show – just taking some of the publications during a one-month period – specific trends in using the World Wide Web by various jewelry companies.
Business to Consumers (B2C)
Blue Nile, the online jewellery retailer yesterday posted better-than-expected quarterly net profit that dropped by nearly a quarter as receding demand in a recession offset waning diamond prices, Reuters reported.
The company said sales trends for 2009 were expected to improve, with a year-over-year sales increase foreseen in the fourth quarter. Blue Nile also said 2009 adjusted earnings would exceed those in 2008.
Jewellery has been one of the hardest hit segments in the retail landscape as consumers cut out spending on purchases deemed unnecessary or expensive.
First-quarter net profit came to $1.9 million, compared with $2.6 million, a year earlier. Sales slid more than 11% to $62.4 million. Blue Nile said its gross margins rose in the quarter as global diamond markets fell in the downturn and the company trimmed costs, the report said.
While Blue Nile continues to face weak demand, opportunities for market share gains have increased, as rivals such as Fortunoff and Christian Bernard stores go under, said the report.
Earlier this year, Blue Nile said the uncertainty in the economy prevented it from giving a financial outlook.
It is noteworthy that even the biggest jewelry retailers (one of the latest examples in this respect is Harry Winston) started selling jewelry through their own web-sites. The majority of high-end jewelry companies do not any more frown at such a way of dealing with their customers and do not consider it as affecting the image of luxury trade. There is but one substantial and quite justified limitation: as a rule, top-class and high-price jewelry pieces are not sold online.
Business to Business (B2B)
The Israel Diamond Institute (IDI) has launched a Russian-language online project to exchange contacts and enter into transactions within rough diamond trade. Eli Avidar, Managing Director of IDI, told this to the RBC Daily. Eli Avidar disagrees that online diamond trade kills the traditions of the industry and it atmosphere. “…This market has presently ceased to be conventional. The world is changing and the diamond industry is changing along. I believe that this is more positive than negative,” he says.
The www.RosyBlueOnline.com web-site belonging to Rosy Blue was put into full gear on May 25. It is designated for business-to-business e-commerce and according to Rosy Blue, those trading through this facility, including retailers, will be using a direct and safe communication system and offered a wide range of certified diamonds from 0.25 carats and above. Their site versions will be available in several languages including English, French, German, Portuguese, Spanish, Mandarin and Cantonese dialects of Chinese, Arab, Russian and Italian, but not only – the company says there will be other language versions of this web-site.
Search Systems
According to www.idexonline.com, MVI Marketing’s JewelrySpotter.com is online. The new site directs consumers searching for jewelry items directly to relevant offers by retailers.
JewelrySpotter was designed and developed as a niche, vertical search engine. It allows consumers to define their search for specific products and price points, something that previously did not exist for jewelry.
“Demography is destiny when it comes to jewelry retailing,” said MVI CEO Marty Hurwitz. “The consumers, who historically have driven jewelry sales at retail, are aging and their numbers are shrinking. The younger demographic that will drive the future of the retail jewelry business is evolving, increasing their disposable income and using the web for all manner of shopping.”
Social Media Resources
Jewelry companies are aggressively expanding in social networks and this is something which was almost missed by analysts. As far back as last year Cartier opened an account in MySpace to promote its Love Collection and this was viewed rather as an exception. However, this year social networks were probed by Tiffany which launched a specialized page on Facebook. Here one may not only view the company’s jewelry pieces, but communicate with their team members and read some stuff on the company’s social and ecological activity.
Russian jewelry industry mass media reported that the Israel Diamond Institute (IDI) goes on with its comprehensive marketing program. On the one hand, it is aimed at business-to-business (B2B) interaction. However, its next stage envisages feeding information via social media like YouTube, Facebook, Twitter, blogs и the Linkedin web-site.
One important advantage offered by social networks is the possibility to launch virus marketing campaigns. This was successfully demonstrated in the end of the last year by J. C. Penney. Their pre-Christmas advertising was built around www.BewareoftheDoghouse.com and the Beware of the Doghouse video distributed mainly through social networks.
According to www.israelidiamond.co.il, Jeweler J. C. Penney’s interactive viral marketing campaign, “Beware of the Doghouse,” has been awarded the 2009 World Retail Award for Best Digital Retail Advertising Campaign. The award showcases digital advertising excellence of retailers across the globe. The award was presented to JCPenney at the World Retail Congress in Barcelona in May 2009.
Ruby Anik, senior vice president of brand marketing at JCPenney, stated: “We are very proud to be recognized by the World Retail Congress for our innovative marketing efforts. Beware of the Doghouse has proven to be a fun and engaging campaign, building on our success of developing new and innovative strategies that connect with younger consumers on their terms.”
The video clip received high ratings for its creativity and multi-channel integration. The World Retail Congress noted that the Beware of the Doghouse campaign “bubbled out into the media, creating great value for the money.”
JCPenney launched Beware of the Doghouse – an amusing viral campaign that enabled women to comically reprimand their loved ones for bad gift choices in November 21, 2008. In the video clip, the only man able to escape the doghouse redeemed himself by buying diamond jewelry for his wife. Throughout the holiday season, the campaign logged more than 7 million visitors to www.BewareoftheDoghouse.com and more than 14 million total video views on You Tube.
The advertising campaign for the Tous jewelry brand with Kylie Minogue proved to be just an opposite example illustrating unhappy use of social media. The international pop star has been long collaborating with the above mentioned Spanish brand. In 2009 she took part in a photo session for a new advertising campaign. It was meant for the new Tous catalogues distributed among retailers. Besides, Tous also released a behind-the-scenes video from the shoot. However, the videos on Kylie Minogue’s work with Tous has not scored even several tens of thousands of viewings.
Hoping to make the most of the "recession-proof" bridal industry, WhereToGetEngaged.com (WTGE) has launched a social network, directory and search engine for couples getting engaged and married to communicate directly with vendors and manufacturers, www.idexonline.com writes.
Established by jeweler Christopher Simonetti, the site connects users, vendors and manufacturers across an easy and intuitive platform. Jewelry industry names to have signed up so far included as Hearts On Fire, Verragio, Benchmark, A. Jaffe, RITANI, and Saturn Jewels.
"Men walk in my store everyday knowing that they are ready to propose and knowing it will be something she'll remember forever, but have no idea how to make it perfect... My goal is to create a social network that will connect customers with the best local businesses and vendors and helps them find the information and products they are looking for. But we won't stop there, even connecting vendors with manufacturers and manufacturers with vendors," said Simonetti.
WTGE is free for users and vendors. Premium accounts are available for vendors, with extended features, premium placement and added exposure across a variety of social media channels.
Users, vendors and manufacturers all get easy-to-setup social profiles packed with features like locations, products, photos, videos, blogs, events, favorites, wish lists, reviews, ratings, social profile URLs and messaging.
The World Gold Council (WGC) has had a peculiar experience in using social media resources. WGC resorts to the virtual world of Second Life to promote gold jewelry. Wikipedia informs that Second Life is a multi-user online game with a built-in three-dimensional modeling tool. The game was developed and launched in 2003 by Linden Lab. Second Life is not so much a game in the usual sense as a kind of virtual media having specific properties. Account users have a possibility to choose the most acceptable way of virtual existence – creating virtual goods, engaging in construction, purchasing and selling virtual land, making virtual artifacts, communicating by way of chats or voice and travelling along many remarkable places of interest in the virtual world. The game also contains resident-established areas for virtual warfare.
Second Life has its own internal currency called Linden Dollar(L$) which can be obtained by exchanging real money. There is also a possibility to convert Linden Dollar into real money, which gives an opportunity to operate quite real business patterns within the game.
Many universities and companies use Second Life for education purposes, including the Harvard and Oxford Universities. In 2008, the virtual media registered over 15 million avatars.
According to www.diamonds.net, the World Gold Council will hold its third virtual event on May 30, 2009, as part of its month-long "May is Gold Month" campaign. The event is to take place on Moderne Island in the virtual world of Second Life. Second Life gives the World Gold Council a virtual footprint for its brand and drives awareness of the value of gold in the real world, according to the group. The event will feature a "golden couples" theme, which targets newlyweds, soon-to-be newlyweds and longtime real and virtual couples. Exclusive virtual jewelry will be made available to those who attend. There will also be a Second Life sweepstakes, in which Second Life residents will have a chance to win 20,000 lindens — the virtual currency of the Second Life world.
Earlier in May, the World Gold Council held a "Make Mom Golden" virtual event, during which visitors received free virtual gold jewelry designs in various shapes and sizes. A second, graduation-themed event gave the group a chance to release additional unique virtual jewelry pieces, which were awarded to avatars in attendance.
"Creating an opportunity for consumers to interact virtually with gold jewelry in a viral environment, while simultaneously communicating the emotionally evocative and enduring value of fine gold jewelry, adds a unique perspective to jewelry marketing on the web," said Duvall O'Steen, promotions manager for the council. "We are excited to offer such a virtual interactive forum to get people talking about, trying on and sharing their favorite stories about gold jewelry."
