SPLITIT LTD (Company) Objectives The Risk, Audit and Governance Committee (Committee) has been established by the board of directors (Board) of the Company pursuant to article 47 of the Company’s articles of association. The Committee’s primary objective is, in
The Ultimate Guide to Luxury and Selling Jewelry Online
The Luxury and Fashion e-commerce jewelry industry is on a fascinating journey of growth, self-discovery, and re-invention. In 2020, a deflating global economy followed by the COVID-19 pandemic set the stage for a worrying contraction of the online jewelry store segment. Yet the innovation within the industry and willingness to put customer needs first signify a nimbleness and refreshing willingness to change. The way that retailers weather the pandemic and position themselves to thrive may very well set the tone for the rest of the “non-essential” e-commerce industry.
As you navigate through The Ultimate Guide to Luxury and Selling Jewelry Online, feel free to jump to the sections that pertain most to your business and make sure to check out the list of 7 keys pivots that will reinvent your (luxury or otherwise) business.
- Luxury vs. Accessibility
- Trend Whiplash and the Current State of the Luxury Marketplace
- Effects of COVID-19 on Luxury Retail
- Meet the HENRYs
- Pandemic as Opportunity
- Jewelry Retailer Must Do’s
- Social, Social, Social
- Marketplace or Not?
1. Luxury vs. Accessibility
The original jewelry – use what’s available
Humans have adorned themselves with jewelry since time immemorial. Archaeologists discovered that 115,000 years ago, prior to humanity’s existence as we know it, Neanderthals were creating jewelry in a cave in what is now modern-day Spain. In fact, scientists believe that early humans were decorating their bodies with jewelry long before we wore anything resembling clothing.
In the time before metalworking, people made jewelry with materials that were readily available in their immediate environments. Seaside dwellers used shells, colored pebbles, fish bones, and the like for decorative adornment while those who lived inland used antlers, mammoth tusks, animal bones, and feathers. These ornaments were thought to be used to bring good luck, keep the wearer safe, and were important enough to be buried with the dead.
Fast forward to the Neolithic era; we see evidence of stone jewelry, as stone working eventually evolved to a point where one stone could be drilled or shaped by another. Also around this time, trade massively expanded between groups of humans. This promoted the exchange of ideas and objects – including jewelry. With trade, social differences were made apparent and jewelry evolved to become a status symbol.
Our modern notion of jewelry came into being about 5000 years ago, in virtually every corner of the world. We see the use of gold, gemstones. and other recognizable elements. Its purposes were as varied as its wearers – utility, beauty, wealth, and status.
And with that short cultural history, we come to today’s world, where items have changed from sacred, ritual items to selling jewelry online, with shoppers placing items in e-commerce shopping carts. It’s been a wild ride and it’s harder to know the best places to sell jewelry, but some elements still matter. Sellers of jewelry online still have to provide an experience that strikes the right balance between utility, beauty, wealth, and status.
Preciousness of materials
The contemporary jewelry market is organized into two distinct categories – fine jewelry and fashion or costume jewelry. Fine jewelry is characterized by the use of precious metals and gemstones. It includes diamond jewelry, gold jewelry, and other precious and rare materials. Costume, or fashion jewelry, can be made from any substance and is primarily designed for fashion.
Designer labels notwithstanding, fine jewelry comes with a high price point due to the value of its parts. These pieces cost more because of the use of precious metals and gemstones and their inherent longevity. They won’t tarnish (if cared for and stored correctly) and can be repaired. The value of precious metals is determined by worldwide commodities markets and many cultures use fine jewelry as a way to store wealth, similar to cash.
Fashion jewelry is a catch-all for everything that’s not “fine.” It can be made from any material and prices vary widely – from the dollar store plastic ring to a designer crystal necklace. People tend to use this type of jewelry to accessorize outfits and build a complete look rather than seeing it as a standalone item. They also tend to cycle through many items – those currently in their possession, and those that come into or go out of fashion.
Low price point doesn’t mean low value for jewelry stores
For those who can’t afford or choose not to spend their money on fine jewelry, fashion jewelry is accessible jewelry. This market segment has recently experienced a huge boost in popularity possibly due to increased disposable income and fashion consciousness in emerging markets (ex. China and India), increased prices of fine jewelry (leading more shoppers to choose fashion jewelry), spending of shoppers under age 35, and the rise of social media influencers bringing images of costume jewelry to a larger and more receptive audience.
We’re currently bearing witness to the transformation of the costume jewelry industry. It’s no longer merely an inexpensive imitation of fine jewelry, but a fashion destination in and of itself. Shoppers are making purposeful pivots towards sustainability (both in terms of environmental tolls and labor standards), mindfulness of cause (to support and display movements near and dear to their hearts), and a focus on different materials that represents an alternate vision of meaningful adornment. Materials may not be expensive, but they still carry meaning and values. This category can also include vintage jewelry pieces and handmade jewelry.
Examples abound. Soko prides itself on connecting a labor force that’s historically been left out of the global jewelry market (Kenyan artisans) with shoppers worldwide. Mint and Lilly offers a “motivational cuff bracelet” engraved with the phrase “Black Lives Matter.” A search for “rubber wristbands” on Google yields 13 million results!
Accessible jewelry with a story, cause, or message is fueling the growth of the fashion jewelry market, which is poised to explode in growth over the next 5 years – from a market size of $28.3 billion $39.2 billion by 2025.
2. Trend Whiplash and the Current State of the Marketplace
How we got here
A discussion of the prevailing online luxury and jewelry marketplace wouldn’t be complete without understanding how the current landscape came to be and how brands sell jewelry today. In short, it’s time for another history lesson covering the past few years.
As late as 2018, many luxury retailers worried that the move to an online shopping experience would be detrimental to their brands – resulting in a loss of exclusivity, and moreover, a loss of that ‘je ne sais quoi’ sensory experience afforded by brick and mortar shopping. Then, in 2019, despite a slowing global economy, luxury goods displayed significant growth. This was fueled in large part by the digital purchasing of Millenials and Gen Z, causing luxury brands to commit to re-examining their customer base and learning how to cater to the shoppers that were fueling their growth. This journey led brands to pursue omni-personal strategies.
Most e-commerce retailers are familiar with omnichannel shopping. If your brand isn’t already adept at this, it’s likely trying to find ways to get there quickly. But what about omni-personal? Omnichannel is easy compared to omni-personal. Omnichannel can be boiled down to a philosophy and a checklist: Keep the customer experience consistent and seamless at every point of contact – website, mobile storefront, social media, brick and mortar, click and collect.
While omnichannel represents a monumental effort for retailers, the results have a significant impact across brands. Shoppers expect omnichannel, but it won’t necessarily make your brand stand out – because everyone is doing it.
“Omni-personal” is the emerging trend to watch. It’s truly different for each and every brand. This concept means that your shoppers drive brand strategy and business decisions. If your business is truly omni-personal, it seeks to understand what the consumer wants and needs at every level.
In the pursuit of an omni-personal approach, digital technology is an e-commerce retailer’s best friend. This is nowhere more apparent than in the luxury market, where the needs to balance personalization with privacy and accessibility with security are of paramount concern. Better technology, such as encrypted networks, assures shoppers that their high-ticket purchases will be processed securely and then delivered safely.
Offering recognizable and trusted payment partners, such as SplitIt, goes a long way to assuring shoppers of the legitimacy of your business, offering valuable benefits such as paying for a large purchase per month. Personalization of your e-commerce enterprise has the ability to bring back some of the soft touches previously only associated with brick and mortar. In short – thanks to technology – e-commerce is finally ready for luxury. And as of January 2020, more shoppers were ready for luxury.
Early 2020: jewelry just before COVID-19
Just days prior to the novel coronavirus taking the world by storm, The Luxury Institute’s “State of the Luxury Industry 2020” forecasted a rosy future for the luxury market declaring, “Strength across luxury categories as affluent consumers worldwide benefit from positive economic trends.”
The report goes on to highlight the industry segments with the highest proportions of consumer spending. Jewelry and watches near the top of the list with 44% (as opposed to segments where shoppers are cutting back, such as wine and handbags at 7% each).
Source: Luxury Institute
However, how affluent consumers were purchasing luxury goods, as of January 2020, is surprising – 68% reported that their luxury purchases took place in-store. The numbers climb even higher for France and Canada where 77% and 76%, respectively, of affluent shoppers buy from brick and mortar locations.
Only 14% of affluent shoppers preferred to do their purchasing online. Even Luxury Institute CEO Milton Pedraza admits, “For [luxury] brands to truly capitalize on the abundant opportunity they need to master an understanding of their customers’ stated and unstated needs and desires, and execute brilliantly, treating each client as an individual human being. This is what we mean by omni-personal relationships. That skill is in high demand, yet, in low supply right now in luxury. Brands that aspire to high performance in 2020 need to master the skills with extreme urgency.”
3. Effects of COVID-19 on Luxury Retail
If 2020 was a “normal” year, this discussion would segue into how online jewelry retailers can cultivate omni-personal strategies for their shoppers. We’ll get there. But COVID-19 threw global markets into a tailspin, hugely affecting both the luxury jewelry and fashion jewelry segments.
Due to economic volatility in the 1st quarter of the year, prices of gold and silver are expected to increase 19.7% and 5.8% respectively as investors look for safe harbors for their assets. Whether these price increases are good or bad for your particular business, the flux and unpredictability in the market are major obstacles for retailers to contend with.
Raw materials notwithstanding, when governments around the world mandated store closures and enacted stay-at-home orders, shoppers and therefore e-commerce retailers were forced to react. Shoppers moved online in droves, purchasing groceries and household necessities from the safety of their own homes at 250% times the rate of purchasing from the year before.
Many brands had trouble keeping up with the increased online demand in general and demand from mainland China in particular. In a Vogue Business poll conducted in March 2020, Chinese shoppers said that post-COVID, they used monobrand e-commerce platforms as their primary shopping channels. This trend has a huge impact on sales as many of these shoppers had previously made their purchases while traveling abroad and at brick and mortar locations.
The shift to increased online shopping has been felt across all categories. Half of Americans plan to spend more online than in-store this holiday season. Taken at face value, the swift, mass acceleration of e-commerce trust and use would seem to be a boon for the online jewelry industry. More on that later.
But just as we advise retailers to take an omni-personal approach when connecting their products with shoppers, we need to take an omni-personal approach of sorts to connect our readers (e-commerce retailers) to the underlying complexities of the e-commerce jewelry industry as well.
Psychological toll of the pandemic
Despite increased online activity overall, jewelry and luxury sales took a beating. Spending in this particular segment dropped to well below previous years. In 2020 alone, consumer confidence declined by 13.5% – certainly a factor in the 6% anticipated yearly decline in the jewelry and watches segment. As of October 2020, jewelry sales were down 33% from usual.
Most shoppers are keeping a careful eye on their discretionary spending and plan to maintain or reduce expenses throughout the upcoming, 2020 holiday season. At the beginning of the pandemic, worldwide supply chains were greatly disrupted. If shoppers couldn’t find a preferred product at a preferred retailer, they looked elsewhere – availability, quality, and value outweighing brand loyalty.
Shoppers are also trending towards essentials – particularly low and middle-income folks. Household incomes are being squeezed by layoffs, underemployment, and lack of child care, leaving shoppers searching out better value and convenience. They’re three times as likely to try a lower-cost brand than they were last year. This phenomenon is known as “shock to loyalty” and can leave retailers scrambling to both maintain and capture new customers.
The human response to a crisis is widely varied. In the early spring panic buying and hoarding filled the news and our lives. Driven by uncertainty as more and more communities closed down, shoppers wondered when or if basic necessities would become difficult to access or taken away completely. Buying items en masse was a way to exert some control – any control – over a frightening and out of control situation.
When shoppers realized that supply chains had been disrupted but not decimated, they moved out of panic mode and into survival mode – just get through this moment. Hunker down, buy what’s necessary, wait it out. As spring turned into summer, summer into fall, fall into winter – people became sick of waiting. As out of control and frightening as current events still may be, shoppers are adjusting to the “new pandemic normal.”
We’re a long way from pre-pandemic comfort levels (⅘ of Americans haven’t yet resumed “normal” out-of-the-house activities), yet this number is steadily declining – 64% as of the time of this writing down from 73% at the end of July. This may be good news for jewelry e-commerce.
There’s some more good news as well:
- With only 13% of luxury purchases currently being made online there’s room for unparalleled growth.
- Despite the pandemic curveball, the luxury market is still expected to grow from $1 trillion (2018) to $1.4 trillion in 2025.
- Millennials are driving the luxury market expansion. They currently comprise 32% of the luxury market and are predicted to expand to 50% in the next 5 years.
- China dominates the luxury market, currently representing 33%. This will grow to 40% by 2025.
Source: Tommy John
The long-term predictions for affordable and mid-range jewelry are likewise optimistic:
- Despite the COVID-19 pandemic, in May 2020, the Costume Jewelry market will grow from $32.9 billion in 2019 to $59.7 billion in 2027.
- This growth is again, fueled by online sales, providing a boundless opportunity for e-commerce retailers.
The stars are truly aligned for the growth predicted in the costume jewelry sector. Markets outside of the west, especially India and China are expanding rapidly. The ubiquity and prevalence of smartphones and internet access mean that more shoppers are now within reach – and many of these shoppers have more disposable income to spend on jewelry.
Combine these circumstances with the fact that the majority of new customers are between the ages of 16-34 years old. That’s an awful lot of possibility in terms of creating brand loyalty!
Thanks in part to the COVID-19 pandemic, shoppers’ behaviors are changing; more than 25% is trending down to less expensive retailers. This is actually great news for a segment that’s already incredibly nimble.
The Fashion jewelry industry is already known for its ability to adapt to the times and to be responsive to shopper’s demands. For example, using ethically sourced materials and transparent labor practices are selling points for many bands – because customers demanded it. When you sell jewelry online, you can capture trends as they happen, including the current desire of shoppers to purchase style and value at an attractive price point.
How brands respond to both these challenges and opportunities as the world emerges from the COVID-19 pandemic will determine their profitability and cultural influence for years to come. Along with providing a product that shoppers want, e-commerce retailers need to really know their customers and how to reach them.Looking to offer an installment payment solution and not sure where to start? This all-in-one guide analyzes, compares and provides criteria for choosing an installment solution with optimal business benefits.
4. Meet the HENRYs
In this environment of reduced spending, luxury brands would do well to expand their customer base and pursue shoppers that aren’t necessarily affluent right now, but who are likely to become so. This specific demographic has significant discretionary income and aren’t afraid to spend it. They’re known as the HENRYs:
High Earners, Not Rich Yet
- 43 years old (average age)
- Higher than average income – earns between $100,000 – $250,000 per year
- Steady cash flow, but not a lot of accumulated wealth
- Little to no savings
- Investable assets of less than $1M
- Spends approximately $86,000 per year on luxury goods
HENRYs are distinct from high-net-worth individuals in that they’re the working rich – if HENRYs lose their jobs, their spending power disappears as well. They don’t yet have passive income to fall back on. Most of their income is spent on fixed costs (housing, school tuition), maintaining a certain lifestyle, and product purchases. They feel like “regular folks,” working hard for a paycheck.
These future rich people are going through a major transition – adjusting to a substantial increase in disposable income and beginning to buy-into a lifestyle that they one day hope to be able to comfortably afford.
For jewelry brands, this is a massive opportunity. Those that can capture HENRY shoppers now, at the beginning of their adult purchasing life cycle, have the possibility of developing strong brand loyalty and creating lifetime customers.
The confluence of this upward trajectory of wealth with a generation that’s come of age with the internet creates shoppers who are comfortable with making high-ticket, digital purchases. This demographic is decidedly different from the wealthiest “1 percent.”
For one thing – there are more of them. HENRY households outnumber affluent ones tenfold – 22.5 million compared with 2.5 million. While affluent individuals spend 2-3 times more than HENRYs on goods and services, the sheer number of HENRYs means that as a whole they spend 3-4 times more than affluent shoppers overall.
The purchasing behavior of HENRYs is different than that of the affluent as well. The purchases of ultra-affluent folks are flashier and draw our attention – private jets, yachts, etc – while HENRYs choices tend to be more middle of the road. They occupy the space between super-exclusivity and the mass market.
Pandora is oft-cited as the brand that epitomizes this space in the jewelry industry. Their strategy of selling charm bracelets one piece at a time, small bits of something precious at a more palatable price point, fits the mindset of HENRYs perfectly.
The lifestyle priorities of HENRYs are also telling. This cohort of millennials prizes travel and experience over possessions. In order to afford the airfare, eating out, and spa experiences, HENRYs will forego a $2000 Louis Vuitton bag in favor of a $200 Everlane tote.
If jewelry brands want to reach these folks, they’ll need to position their marketing strategies accordingly:
5. Pandemic as Opportunity
It’s no secret that the luxury market has been hit hard by the COVID-19 pandemic. Social restrictions, job uncertainty, and a volatile economy have caused industries all over the world to falter at best and come to a screeching halt at worse. How can you plan for your e-commerce jewelry business in this constantly changing landscape? Begin with the bright side.
Luxury brands have long been associated with high-end, brick and mortar, retail locations. Prior to the pandemic, younger shoppers were already willing to purchase big-ticket items online. Stay at home orders and mandatory business closures have changed how shoppers connect with their prospective purchases. Online shopping for anything and everything is an option that’s suddenly on the table. It’s not merely acceptable but expected for shoppers and brands to connect online across all segments.
In 2019, 15.4% of all jewelry sales were made online. This represents an enormous amount of potential. As of a year ago, 85% of shoppers were making their jewelry purchases in brick and mortar locations. But as the COVID-19 pandemic changes the way shoppers interact with merchandise, they may be ready to make their jewelry purchases online – especially if e-commerce retailers can make the experience worthwhile. This is a bit more complicated than it sounds. There are a host of Website Design Best Practices that are unique to jewelry retailers, which we’ll explore in the next section.
Businesses have to pivot to stay relevant right now. Whether it’s a grocery store adding “click & collect” to round out their omnichannel offerings or a luxury storefront building a website – the entire retail landscape is reinventing itself. This is the perfect time to make changes to your business model, especially investing in your team and valuing omni-personal strategies.
Based on insights from the Luxury Institute
Pivot 1: Agility is king
The ability to reinvent your business to respond to rapidly changing conditions is based on agility. This agility is a measure of how well retailers can meet the needs of their shoppers, not despite but because of current circumstances. How quickly can your business create and deploy digital content, react to seasonal and current events, and adapt with technological advancements?
Sometimes a lack of agility is due to factors beyond your business’s immediate control; perhaps there’s only a single source for a certain product or several key people on your staff are out sick. If a scenario like this could throw your business off course, do you have contingency plans?
Often, however, a lack of agility is a lack of imagination. Changing the mindset of your company and team can do more to keep your business nimble than almost anything else. If you cultivate a culture of problem solvers, risk-takers, and innovators, your business will be agile by default.
The number one way to do this is by letting your team know that failure isn’t the end – it’s the beginning of a road to a better solution.
Pivot 2: Change “survive” into “thrive”
Imagine trying to swim through a storm. The sea is getting rougher, the waves are getting bigger and pretty soon you don’t have time to catch your breath and make a plan before the next wave comes crashing down. It’s all you can do to keep your chin above water. That’s surviving. And that’s what many businesses have been doing since the start of the pandemic – trying to stay alive while they ride out the storm. However, the retailers that figured out how to build boats, or decided to pivot to the submarine business are thriving right now.
We’re not suggesting a change to your core business. But we’re suggesting that you put your agility to use. For example, are all or some of your employees working from home now? Do you really need an office, retail, or any other physical space aside from storage and shipping facilities? Can you reduce your fixed costs by embracing the “work from home” model for all or some of your employees?
Are there new revenue streams that your business could take advantage of? For instance, masks and mask accessories may be with us for quite some time. Has your business been agile enough to capture those sales?
In the second quarter of this year alone, 110,000 Etsy sellers sold 29 million face masks for a total of $346 million. Don’t be afraid to set aside an outdated product offering or way of doing business. What works for your business right now? What do you anticipate working for your business in the months ahead? Do that. Take a look at some of the trends in marketplaces like Etsy to inspire you.
Pivot 3: Value your human resources
It goes without saying that the safety of your employees should be paramount in the midst of a pandemic (and always). While COVID-19 is a menace, in practice this could mean providing staff with PPE, socially distanced workspaces, work from home options, and corporate and client culture that supports their safety. This is merely the tip of the iceberg.
Without your employees, the people who support your organization – your business cannot function. They’re the foundation from which to build a brand, an e-commerce retail hub, and a viable business. In fact, we would go so far as to argue that your employees should come even before your customers. Even if you’re a “one-man-band” or a small family business, you know well that the next step in growing your e-commerce brand is hiring employees.
Shoppers have so much choice in an online environment. Why should they shop with your brand? What transcends the digital environment to make your online jewelry business stand out from others? Many lessons jewelry retailers learned and mastered in the brick and mortar space do transfer online.
The relationship between how your employees are treated and valued is a direct line to how your shoppers are treated and valued. Jewelry shoppers expect to be treated well regardless of the channel. The higher price point that accompanies jewelry purchases is accepted with an understanding that it comes with an exceptional, service-oriented shopping experience. The assumption of quality and service is perhaps even more important online, where shoppers don’t have a complete sensory experience – to touch and fall in love with a product.
Jewelry brands that espouse an ‘associates first’ policy create an infrastructure of company-wide morals and values that serve as guideposts for all interactions, including those with shoppers. If management and employees are expected to operate with empathy, trustworthiness, and generosity; these emotional intelligence life skills will foster collaboration, innovation, and execution of these ideals from the inside out. Employees will hold each other to high standards in their dealings within the company and also outwards – towards shoppers.
Pivot 4: Build collaborative teams
If there’s anything that the COVID-19 pandemic has taught us; is that businesses must be aligned within their own ranks to survive and thrive in such a crisis. Companies that are agile, courageous, and whose employees feel valued are in a prime position to create cross-departmental teams to tackle the most difficult challenges and innovate with new ideas and solutions.
All departments from e-commerce, marketing, product design, production, technology, supply procurement should work together for the benefit of the brand, not loyalty to their own corner of the organization. Companies that can master this type of organization from within are in a position to innovate lighting fast, without the delays that usually plague bureaucratic organizations.
It’s unrealistic to expect your organization to be an expert at every single thing, even when well-organized teams work together. The best leaders realize this and don’t hesitate to seek expert advice. Jewelry brands excel at creating superior products and providing exemplary service. Don’t be discouraged if your brand needs to hire or take advantage of services that provide e-commerce personalization support, data security, social media expertise, and the like. Do what your business does best and bring on professional authorities in the areas where your company expertise may be lacking.
Pivot 5: Use relevant data to build trust
Most e-commerce businesses are swimming in data – much of it “dirty,” obsolete, and irrelevant. Use of bad data can damage your business’s reputation (21% of companies admit to experiencing this) and turn off shoppers – 90% of consumers receive ill-targeted marketing communications and are annoyed by it. This dirty data is then fed into algorithms meant to create personalized shopping experiences that often miss the mark. Perhaps some e-commerce retailers can get away with a “some personalization is better than no personalization” philosophy (although we respectfully disagree). The jewelry market, however, is different.
Jewelry shoppers who are making high value, high risk, high investment and/or high emotion purchase decisions won’t abide by businesses that only take a data-driven approach to the online jewelry shopping experience. Jewelry shoppers are looking for brands they can trust. They demand a personal touch. Jewelry brands that figure out how to deliver individualized service via an e-commerce platform will be poised to take the market by storm.
Pivot 6: It’s all about relationships
Net-A-Porter is an example of a luxury e-commerce company that prioritizes and personalizes the individual shopping experience for its ultra-high-net-worth customers while providing superior service to their other clientele (ex: HENRY’s).
Well before the pandemic, Net-A-Porter set up a system where shoppers could seek out and use fashion consultants at no extra cost. More importantly, if shoppers spend enough revenue with the company, fashion consultants reach out to customers. The fashion consultants are the equivalent of personal shoppers, who use their style and fashion expertise to the benefit of the individual shopper. These consultants suggest styles, design “looks” and help shoppers navigate the latest trends. They form unique relationships with their shoppers and serve as the conduit between the company and the consumer – bridging the digital divide with a human touch.
Net-A-Porter has taken the sales associate and made it virtual for those clients who want to retain that personalized, interactive experience. While this may seem to be an inelegant solution – it works. Jewelry brands that seek to serve their online shopper’s best interests, personally and uniquely, will build trust, lasting relationships, and exceptional lifetime customer value.
Pivot 7: An omni-shift
If your e-commerce retail business doesn’t employ an omnichannel approach, it’s dead in the water. Shoppers expect omnichannel operations. They expect options and integration – options for how and where they get their product information, options for how and on what device these purchases are executed, options for how to pay, and options for how to receive their merchandise – all with seamless integration between channels. However, for jewelry brands to thrive in a post-pandemic economy, more is needed.
Omnichannel paved the way for harmonious and flawless operations. The traditional sales funnel that’s been structured by retailers is on the decline, becoming more irrelevant every day. Shoppers choose whatever personal, non-linear route is right for them. And it truly is a series of individual choices – from brand discovery and engagement, product research, payment structures, service interactions, and returns – all the way through to the post-purchase relationship. Omnichannel operations enabled this ‘choose-your-own-adventure’ shopping journey.
Omni-personal will provide that oh-so-needed and desperately lacking the human touch. It’s the next phase of e-commerce evolution and for luxury and jewelry brands to excel in the midst of economic uncertainty, market contraction, and consumer spend-thrift – it’s imperative to implement. Omni-personal strategy transforms the rules and modalities of shopper engagement. The metaphor we like best is that in an “omni-personal world, the sun (the customer) never revolves around the earth; the earth (the brand) revolves around the sun.”
Through all of these pivots, the shopper isn’t there to buy from your retail business. Your retail business is there to serve the shopper. Your brand doesn’t determine what the customer wants, they do. Your brand is there to meet the customer’s individual needs. This is a strategy best employed from the ground up – at every level of your company – from product design and development through to sales and marketing. Luxury and online jewelry retailers are already primed to employ this strategy.
6. Jewelry Retailer Must Do’s
Overall business strategy is a necessary part of this discussion but we understand its lofty goals and ideals can take time to implement.
Websites designed to feature jewelry
It should go without saying that e-commerce jewelry retailers need well-designed, well-executed websites with flawless UX (user experience). Your website is the most obvious and important window to your brand and the platform from which most sales are executed.
Many brands who sell jewelry, however, are limping along with outdated technology – patching security fixes onto code, adding sub-par search functionality as an afterthought, slapping on chatbots, and trying to weave in personalization algorithms. It’s the equivalent of digital duct tape and ultimately hinders your jewelry sales potential.
We’ve written at length about general website design and technology, especially as it relates to mobile storefronts. All of that information is pertinent – but jewelry websites, in particular, have special requirements that other products may not call for.
The devil is in the details: When shoppers consider jewelry purchases they pay extra attention to the fine details and touches that make a piece special. These particular touches have a huge sway in shopper’s decisions. The attention to detail both as part of the piece and how it’s displayed matter. Highlight and show details to your shopper. Be mindful of details in general on your website.
It’s all about the image: All the fine details you just went through the trouble to highlight? They need to be seen in crystal-clear, large images. Jewelry product images are more important than images in just about every other sector. Shoppers that are purchasing batteries don’t usually care what the items look like – they want to know the technical specifications. Jewelry shoppers need to know exactly what the products look like – it’s the most important factor in their decision making. How these images make it to the shopper is crucial – use technologies that can serve large photos quickly so that you’re not sacrificing load time.
Visualize product variations: Colors, gemstones, band materials, styles, sizes, etc – every single choice (aside from size) should trigger an updated visual so that shoppers can personalize and visualize their choices.
Customization is key: Jewelry purchases are special. They aren’t necessary like grocery items or household goods. Highlight the exceptional nature of the purchase by offering custom elements whenever possible – engraving, gift boxes, etc.
Service for the customer: Shoppers want to trust where their jewelry comes from – especially the luxury segment. There’s no better way to do this than through exemplary customer service. Remember, shoppers get to choose their preferred method of engagement – this can be through social media (ex: Facebook Messenger), live chat, phone call, email. It’s your responsibility as the retailer to offer and then respond without delay to all inquiries on any channel.
Provide security and payment options: Shoppers need to trust the brands they purchase from – especially when making decisions regarding large ticket items such as high-end jewelry. A security or accredited business logo shows that you’re mindful of shopper’s concerns.
Shoppers also want the flexibility to pay in ways that work with their individual budgets. SplitIt is an excellent option for shoppers that want to exert more control over their finances. It allows them to pay for purchases with their existing credit by splitting the cost into interest and fee-free monthly payments, without any additional applications or registrations. Contact SplitIt for more details.
Get social: Shoppers want to feel like they’re not alone, like they’re making a good decision, possibly one that others have made before. Social media is the secret sauce that can make a great product a viral sensation. Images of bloggers and influencers wearing your product can skyrocket its popularity. Don’t discount “lower tier” influencers either. They’re affordable for many brands and their niche followings often have higher-quality engagements, which influencers with larger followings don’t.
Your social media feeds are as essential as your website. This is often the first point of contact with shoppers, where they’re introduced to your brand. The old adage, “There is no 2nd chance to make a 1st impression,” is of paramount importance here. 70% of shoppers search for products on Instagram and Facebook and in the last 2 years alone, social media referral traffic to e-commerce stores increased by more than 100%.
Your social feeds build trust, establish credibility, and provide legitimacy to your brand. If your shoppers want to be part of the lifestyle you espouse on your social channels, the chances they’ll buy into your brand increase significantly.
7. E-commerce jewelry case study
The website for JAMES ALLEN executes many of our suggested jewelry websites features brilliantly.
1. Details and imagery – Right from their home page, they feature a “Design your own engagement ring.” The page is dominated by a huge, high-quality image that captures the details of the stones, band, and setting.
2. Visualize product variations – The “Design your own” shopping adventure clearly conveys that product variations will be an important part of the process.
3. Customization is key – In that same, high-quality image on the home page, an engraved name is clearly visible inside the band, showing shoppers immediately that customization is an option.
4. Service for the customer – The info bar at the very top of the website promotes:
- 24/7 customer service
- Lifetime warranty
- Free shipping
- 30-day returns
Customer service options (chat, message, phone number) are available at every stage from the home page, to product pages through to the shopping cart. James Allen goes even further, as they realize that a purchase of their product requires an extraordinary leap of faith – they offer “real time jewel inspection” with a certified gemologist. All of these efforts show how much the brand values the trust of its shoppers and lets customers know that the company will stand behind their products.
5. Security and payment options – The “accredited business” logo is visible from the home page, denoting a secure and trusted transaction. Shoppers have the option to pay via Paypal, credit card, wire transfer, company financing, or 3 interest-free installments using Splitit.
6. Get social – The text and link, “Spark your imagination with these recently purchased engagement rings” proves to shoppers that others have walked down this path before, with great results. It provides peace of mind while igniting excitement.
Image 1: Online Jewelry Store Home Page imagery and offering:
Image 2: Info bar at the top of the website:
Images 3 & 4: Online Jewelry Store Real-Time Ring Inspection / Live Consultation option:
Image 5: Payment options
Source: James Allen
Strategic sales and promotions
We’ve already established that jewelry isn’t essential. Because of this fact, strategic sales and promotions are extremely important and can also be playful and fun. They can bring much-needed levity and joy to these difficult times.
With your target audience and the use of market psychographics, this isn’t the time for a “throw it at the wall and see what sticks” approach. Rather, we’re advocating that you seriously consider who your shoppers are and what makes them special when selling jewelry online.
Identify or segment smaller groups of people within a larger group. The idea is to attract the right audience with the right message even if it means you reach a smaller number of potential shoppers overall. The purpose of this effort is to better meet the needs of your small, specially chosen group in a way that you would if you were face to face.
Jewelry is an inherently emotional purchase. It has to ‘feel right’. A great exercise is for e-commerce retailers is to use market psychography to create profiles of their shoppers. This allows brands to delineate customers based on shared personality traits, beliefs, values, attitudes, interests, lifestyles, and other characteristics; for the purpose of marketing the same product to otherwise different demographic groups.
For example, your shoppers could be young, extroverted, professional women who ‘work hard and play hard.’ Following the 5 commonly studied psychographic characteristics, your customer could emerge as follows:
- Personality – Your customers are primarily women who rank spending time with their friends as very important to their happiness and well-being. Including groups of women laughing together and socializing could be part of your imagery for your marketing campaign.
- Lifestyle – Your customers tend to live in urban centers, have college-level or higher schooling, have been in the post-school workforce for 3-10 years. Perhaps they rank ‘after-work drinks’ as an activity they participate in one or more times per week. A marketing campaign could acknowledge how hard these shoppers work – they earned this purchase. Jewelry is their reward for a demanding job and lifestyle.
- Interests – Your customers use their free time and income for going out to dinner, travel, and other experiences. How can your jewelry provide memory and meaning to their lives? Perhaps friendship gifting to commemorate group travel could speak to these folks.
- Opinions, attitudes, and beliefs – Your customers rank “spirituality” over “religion”. Your campaign might point out how certain gemstones interact with certain personality types.
- Values – Your customers are concerned about global warming. You should tout your sustainable business model and how you give back to environmental funds for every purchase.
Now that you really know your shopper, you can speak directly to them. This makes everything easier – from your messaging and imagery to your social media posts and ad buys.
Mejuri clearly knows their shoppers well and creates campaigns that resonate with them. Here are a few examples aimed at women just stepping into their power:
What’s your story?
Millennials and Gen Z want to know the brands they purchase from and they crave authenticity.
- 69% are more likely to shop with socially accountable brands.
- 33% won’t purchase from companies that contribute to causes they don’t agree with.
- 79% trust a brand that doesn’t photoshop or alter their images.
- 84% prefer the use of real customers in their ads.
The key to reaching these shoppers is to tell the story of your brand or product, truthfully. Next, think of what you’re selling online and to whom. After the exercises in market psychographics, this should be second nature. How can you touch these shoppers? What motivates and excites them? Who are they and who do they want to be?
Remember that jewelry is aspirational and inspirational. It’s status, gift, symbol, and reward. Your story and outreach to shoppers should connect who they’re with who you are and what your products mean to them.
7. Social, Social, Social
Now that you know your shoppers and the story you wish to tell, the last mile is making that connection. Social media is arguably one of the best ways to reach shoppers.
The influence of influencers
To influence means to affect, sway, or to move a person to some action. How can certain people, who have become popular on social media channels, have a direct impact on how shoppers engage with your brand? Humans intrinsically want to fit in, make friends, and gain status.
Being part of an influencer’s tribe fills our basic human need to feel like we belong. Audiences listen to the stories that influencers tell – that’s how they’ve skyrocketed to popularity, to begin with. Brands that take the time to work with influencers greatly expand their market reach.
It’s worth noting, influencers are social media experts. They know how to use the tools at their disposal to create meaningful and engaging content, dramatically tell stories through which they reach their audiences, and they’ve already formed trusted relationships with their followers.
If an influencer genuinely likes your brand or product, chances are they can disseminate that message super effectively to their followers. That type of peer-to-peer communication is way more effective and authentic than traditional marketing methods.
Cultivating a brand social media following
We recommend a dual social media strategy – where brands work with influencers and also cultivate their own social media following. You have complete control over your own Social Media feeds (well, aside from the comments!) and the message that you want to portray can be perfectly curated to your audience.
To create a brand following, you need to create a lifestyle. This sounds like a heavy lift, but you likely know by now the lifestyle your shoppers have or aspire to. How do your products complement and fit into this lifestyle?
Vestaire Collective is a fantastic example of a jewelry and fashion company that’s creating a lifestyle based on sustainability, accessibility, and high fashion. Being a good, responsible citizen can also look great. A portion of their Instagram feed is as follows:
Source: Vestaire Collective
For Vestaire Collective, the products they sell are complementary to the lifestyle they embody. Lifestyle first. Product second. When shoppers get to know a brand and that brand’s story through their social media presence, they’re more likely to make a connection and become loyal customers.
8. Online Marketplace or Not?
Small and mid-size jewelry retailers have a huge decision to make when it comes to selling their products: online marketplace, website, or both? Start by examining your business and creating a profile:
Once you have a better idea of what your capabilities are, you’ll see if you’re fit for certain marketplaces. If you do fit, we suggest starting small, with two or three online marketplaces maximum. If your brand can manage those as time goes by, consider adding more.
However, we’re a proponent for always having your own e-commerce website in addition to any marketplace presence. Even if much of your sales are through marketplaces, shoppers doing research or organic searches will want to check out your website. It’s a reliable destination for shoppers to find out who you are, and is branded exactly how you choose.
A marketplace for luxury retailers?
Luxury retailers have a different calculus to consider when it comes to best places to sell, including online marketplaces. These brands have traditionally been considered so structured, precise, and exclusive that marketplaces aren’t the right channels for their products. Net-A-Porter cracked that mode of thinking wide open by creating a marketplace specifically for luxury goods. The ‘jewelry and watches’ category of their website sells items that range in price from $45 to $129,000.
Not to be outdone, “Luxury Stores” by Amazon has launched with a first retailer, Oscar de la Renta. This invite-only “store within a store” will give companies more control over their inventories and pricing than the “regular” Amazon, while leveraging Amazon’s mammoth reach to consumers. Customers will find ready-to-wear luxury items, available to view with interactive 360-degree tools. If Amazon succeeds in the luxury space, it raises the bar for all luxury retailers who sell jewelry online. Amazon brings its scale, customer reach, shipping time requirements, return policies, and the like. Brands that are used to setting their own bars will be expected to adapt to Amazon’s exceedingly hush standards. All luxury brands selling jewelry should hold their proverbial breaths to see what happens here!
The e-commerce luxury and jewelry market is undergoing a seismic shift. Brands that follow e-commerce best practices and tailor them to suit their unique and exclusive customer base are gaining loyal shoppers and devoted social media followings.
The willingness of brands to meet customer needs (rather than merely selling them a product) and the effectiveness of Social Media to reach new shoppers has put this non-essential segment in a very favorable position to sustain and grow their businesses through the pandemic and beyond.
Contact Splitit to discuss how adding a Buy-Now-Pay-Later option at checkout can put your business one step closer to achieving a premier, omni-personal strategy.Looking to offer an installment payment solution and not sure where to start? This all-in-one guide analyzes, compares and provides criteria for choosing an installment solution with optimal business benefits.