The use of websites to compare prices and conduct purchases is becoming more and more widespread. Buyers visit websites to check inventory and prices, but at the same time the websites gather information about users and consumers. These data enable the websites to analyze their own performance as well as examine their customers’ buying habits. The websites use the information to better adjust themselves to their consumers’ needs, thus improving sales and marketing.
Large online jewelry retailers like Blue Nile, Amazon and eBay enjoy various advantages over brick-and-mortar jewelry stores both from the aspect of size as well as tracking and analysis of customer behavior. Small jewelry retailers are pretty much on their own. Often they are family businesses spread over a wide geographical area. They receive information about consumers’ behavior regarding jewelry shopping mainly from surveys conducted by periodicals or commercial companies. The data are often available after a shopping season and at considerable expense.
Nevertheless, brick-and-mortar jewelry stores still hold an advantage despite the increased use of the web for diamond jewelry purchases – for the most part jewelry consumption is still conducted through the old-fashioned and tested method of purchasing from local jewelers.
The Advantages of the Internet
Large websites gather data about customers by analyzing activity on the website. In professional jargon, the process is called tracing clicks. Special software provides figures regarding the surfer’s activities; what links he clicked, which pictures he chose to enlarge, whether he made a purchase, the duration of time that he spent on the site, etc. It is possible to recognize changes in buying habits such as a seasonal increase in the purchase of solitaire diamonds, for example. Marketing and advertising can then be channeled accordingly.
Ongoing tracking of consumer behavior and an examination of completed transactions provide a clear picture as to which item is more popular, and enable the redirection of advertising activities as well as advance planning of manufacturing and suitable inventory.
Another aspect related to the analysis of consumer behavior is the combination of marketing data with geographical information, or in marketing jargon – geomarketing. Geographic work tools include data gathering and sales, marketing and distribution analysis. The process can be compared to sticking a pin into a geographical map. The system enables large websites to physically situate the consumption of a certain type of jewelry at actual locations.
Another example of the incorporation of geographical data with marketing information is related to where the store should be situated. If a fine jewelry chain seeks to open a new store, it can map out the location of competitive stores and make a decision regarding the location of the new store based on this information.
Jewelry Retailers are Bridging the Gaps
As stated above, brick-and-mortar jewelry stores are in an inferior position in comparison to large websites when it comes to analyzing consumer behavior. A new Canadian company called Openblue offers independent jewelry retailers as well as wholesale jewelers a tool which enables the sharing of information regarding jewelry purchases. With the help of this tool, independent jewelers may be able to compete with the large websites that track consumer patterns, reach a large number of consumers and leverage inventory.
Openblue created a website which enables a large number of small retail stores to display their inventory together. In effect, the company has created one large website which is composed of many small stores. The website features an average of ten thousand items including diamond jewelry, loose diamonds and watches. Each time a visitor enters the website, the click is counted and the input is transmitted to the retailer and the supplier. Purchasers are offered a much larger and more diverse inventory online than any single retailer is capable of offering.
For example, the company analyzed the “Canadian Diamond” product or jewelry embedded with Canadian diamonds by applying geographical mapping. The analysis showed that the greatest interest in these products was focused in Canada. (The Canadians considered diamonds produced in Canada as a brand that distinguishes them from the rest of the diamonds in the world in general, and conflict diamonds in particular.)
Another study was also conducted regarding loose diamonds branded as “Canadian Diamonds.” Here, too, it was possible to scan main interest areas, and it is not surprising that Canada constituted the nucleus of interest in Canadian diamonds.
Summary
The Internet is a marketing tool which initially appears to pose a threat to retail jewelry stores. However, it is possible to harness the Internet’s power in favor of single brick-and-mortar jewelry stores and designers. The development of additional websites that can incorporate a wide range of stores will help to bridge the gap between online jewelry websites and themselves.
The launching of a new jewelry item in the market entails considerable investment, costing, raw materials, work and marketing. Fine jewelry is a luxury product which appeals to the consumer and “demands” that he use his available cash to purchase a product that appeals to his emotional side, a factor that contributes to the level of uncertainty regarding the product’s potential success on the market. The incorporation of private jewelry stores for joint jewelry sales on a website enables the gathering of important information which helps the store owner, designer or jewelry wholesaler to reach educated decisions.
By: Iris Hortman, IDI Information Officer and Rachel Lieberman
