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Experience
the Yehuda
Clarity Enhanced Diamond Difference. Diamonds Priced
Up To 30% Less Than Other Online Jewelers.
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The Internet - Practical and Better - Is Back
7/16/2003
Pre- and post-2000 played out a classical case study of euphoric speculation in the boom-and-bust cycle of the World Wide Web gold rush. Toward the end of the manic stage, even the most conservative investors were hard-pressed to resist throwing their hats into the ring. Venture capital poured into tech start-ups characterized by business plans with attractive facades but little depth or founding in reality and, often, executives with paltry experience to execute them. But the emperor, it turned out, wasn’t wearing any clothes. And when the illusion crashed and burned, the fire was stoked by vault-loads of feel-good paper wealth. Average Americans looked on dazed as their nest eggs vanished. The Internet went from sexy to loathsome at broadband speed. In hindsight, the same people who had leaped aboard became the Net’s most acute critics. Internet jokes edged their way into stand-up routines. The lesson: Don’t hit an American in his wallet. Dread and Anguish “Pure play” jewelry retailers appeared. The names of those dot-coms are nearly forgotten already, perhaps banished from memory—Adornis.com, Miadora.com. The premise, as in so many Web concepts, was basically, “If you build it, they will come.” And these companies based merchandising strategies on expectations that vendors would vie for inclusion. Instead, established jewelry retailers “convinced” manufacturers to circle the wagons, countering with their own “official” industry site. That site, Enjewel, succeeded in keeping the beast at bay, undoubtedly contributing to the newcomers’ downfalls. Considering that small to midsize companies invested tens of thousands of dollars in Enjewel, there was surprisingly little outcry upon its own demise. Perhaps it was a case of “money well spent.” Also stacked against the first generation was the problem that Web users’ expectations substantially outpaced the technology. Download times were painfully slow over dial-up modems, especially for jewelry photos, a necessity for online jewelry retailing. While the concepts of escrow payments and return policies were being developed, they were far from ironed out. Moreover, consumers were yet skittish about online credit card payments. It was all just too new. Technology Progresses Critically for jewelers, many of the same average citizens who invested and lost, while they may have resisted admitting it publicly—and probably stopped referring to it as “surfing”—continued to build their levels of online comfort. The Internet has quietly evolved. And Joe Public has learned how to use it and relies on it as casually as he does a cell phone, fax machine or voice mail. Many users now access the Internet via high-speed connections—DSL lines provided by their local phone companies or cable modems spliced off their TV lines. And after their virginal fears of buying over the Net proved unfounded, “users” have converted to “consumers” in droves. According to the National Retail Federation, online retail sales grew 48 percent last year to $76 billion and are expected to hit $96 billion for 2003. The time is ripe for a new generation of jewelers online. And they’re beginning to arrive, schooled by the failures of the past and much more practically attuned to the true merits of the medium. For one thing, it’s become readily apparent that many consumers prefer the ease of online over traditional shopping. How pleasant to buy birthday, anniversary or holiday gifts from an armchair in the privacy of office or home. How nice to pass the hours browsing self-purchases. How much easier to seek product information at arm’s distance rather than approach a high-pressure salesperson, or perhaps to be better armed when you do. Birth of a New Generation Andin International, a leading colored stone jewelry manufacturer for the majors sector, now claims more than a million users for its Jewelry.com site, a URL the company bought from the fallen Miadora.com. The company has convinced Sears, J.C. Penney, Macy’s and Zale to participate and has broadened its colored stone offerings by forging partnerships with De Beers sightholder Schachter & Namdar and gold giant Aurafin-OroAmerica. The retailers gain another tactic for driving sales, while the manufacturers add a valuable merchandising tool to offer their big customers and prioritize their product among active jewelry shoppers. Because online shoppers can move so easily from retailer to retailer, price is indisputably a factor. Yehuda, with its market position of offering clarity-enhanced diamonds at significantly lower prices than untreated diamonds of similar appearance, is launching a consumer site to exploit that strength. Like Jewelry.com, the site will not sell directly but will drive shoppers to affiliated retailers. Yehuda says it will spend $1 million over the next year on advertising to attract shoppers to the site. Ebay is a phenomenon in a class of its own. Not only consumers but jewelry retailers and vendors are rapidly making jewelry a top category on the auction site. The company says jewelry sales surpassed $400 million in 2002 and are expanding exponentially. Others in the trade are using the Net for its educational value. Central to the rebranding plans unveiled in June by the Platinum Guild International is an overhaul of its consumer promotional site, scheduled for fall. PGI has also launched a new trade site and has developed an intranet that enables the association’s executives to chat, check one another’s schedules and share documents from their far-flung worldwide offices. The World Gold Council operates a high-impact consumer promotional site from
its international headquarters in London, and the U.S. office plans a fall launch
of a trade site that will offer extensive marketing, product and sales training
information. Whitney Sielaff |
