Modern Jewelry Trends

Almost $1 billion in diamond jewelry sales take place during the last week of December and first two weeks of January. Post-holiday sales have been growing in importance thanks to the gift card boom. The Diamond Promotion Service is hoping to encourage more consumers to use their gift cards and shopping money to purchase Journey diamond jewelry. The Diamond is Forever holiday commercial promoting Journey will continue to run after Christmas this year. In addition, DPS is contributing $250,000 to a co-op fund to pay half of retail jewelers’ Journey television commercials during these three post-holiday weeks. To qualify for up to $20,000 in television co-op dollars, just create a television advertising plan with Spot Runner, the DPS television ad partner to run a Journey television spot in your local market. You can pick your ad, customize it and create a media plan yourself online. Here are the details. Since the opportunity is first-come, first-served in each market and expires on December 10, contact DPS right away if you are interested.

Store traffic and sales were up a bit as shoppers opened the holiday shopping season on Black Friday, but average sales per customer were down slightly. According to the National Retail Foundation, traffic at stores last weekend was up 4.8 percent but the average amount spent dropped 3.5 percent, probably due to fewer big ticket TV sales. Although sales are still ahead of last year, the media coverage was surprisingly negative, possibly affecting consumer confidence (and the stock market isn’t helping either.)

Now data from the opening of the online shopping season shows a similar trend, with the exception that traffic is up much more dramatically. A study by comScore reports that Cyber Monday sales were up 21 percent to $733 million this year. The number of buyers online during the day rose 38 percent from one year ago but the average per-customer purchase fell 12 percent.

Major online retailers did well this year. According to comScore, Amazon.com, Wal-Mart, and Target were the top three website destinations for consumers. According to the Hitwise Retail 100 Index, traffic to top retail websites on Cyber Monday rose 26 percent over 2006. CyberMonday.com received more than 1.5 million unique visitors on Cyber Monday alone, five times more than one year ago. Although there is some debate about the concept of Cyber Monday, especially since several other online shopping days are more important, the concept has legs. Internet service provider Akamai reported that its metrics for 300 monitored retail sites yielded 4.6 million visitors per second, making it the single largest day of Internet retail traffic in 3 years.

Several online jewelry retailers reported big sales boosts on Monday. At Diamond.com, traffic rose 58 percent and sales increased 65 percent. At Ice.com, with a discount offer, traffic was up 70 percent and sales increased 82 percent.

But there’s much more to come, of course: as of Sunday, November 26, the average person has completed 36.4 percent of their holiday shopping, the same as last year at this time, the NRF says. One in 12 has finished their holiday shopping. (And of course, we hate them.)

Online jewelry retailers are placing more emphasis on Cyber Monday, today’s symbolic beginning of the holiday online shopping season. Shop.org’s Cyber Monday promotion site has a large list of jewelry promotions from Ice.com, Blue Nile, HSN, QVC, Shop NBC, Jewelry Television, eLuxury, Overstock, JC Penney and Nordstrom’s. Seventy-two percent of online retailers will offer special holiday deals on Cyber Monday, up from 43% two years ago, according a Shop.org survey. But the general retailing community is doing less promotion: a BDO Seidman survey of chief marketing officers reported that only 39% of all retailers are conducting special holiday promotions to boost online sales.

Shop.org’s Cyber Monday site does benefit a cause, but the cause is creating more online retailers, which seems a bit self-interested: participating retailers agree to donate a percentage of proceeds to the Ray M. Greenly Scholarship Fund, which provides scholarships for students interested in an eCommerce career. Is that really the best cause they could find to motivate consumers? (I suspect another organization that promised to donate 5 percent to benefit sick children or breast cancer research could get a lot of support.)

But on to the deals. Many retailers are offering free shipping this holiday, the most popular promotion with consumers. (According to Forrester, 61 percent of consumers are more likely to shop at a site that offers free shipping.) In addition Ice.com is offering 20 percent off and Jewelry Television is offering 10 percent off. (Compare those discounts with the 70 percent off offered by major brick-and-mortar retailers on jewelry on Black Friday and you’ll see why most consumers assume that jewelry in stores is marked up much more.)

Online jewelry leader Blue Nile, which is offering free overnight shipping this holiday season, is also taking advantage of some promotional partnerships this season, which have been getting them a lot of press coverage. Starting today Blue Nile is offering 20 percent cash back on purchases made with PayPal, up to $50 per account. They also are offering $100 off on a diamond purchase as part of a Google print ad promotion. (If your customer is determined to buy online, give them the coupon code: it’s SMARTER100.)

Black Friday door-buster sales will include fine jewelry once again this holiday season. Most of the deals at major retailers, previewed on sale news sites like BFads.net which are becoming an increasingly important part of Black Friday shopping culture, are deep percent-off discounts off of all fine jewelry. JC Penney is advertising 65 percent plus an extra 20 percent off their entire stock of gold jewelry. So 85 percent off? What kind of markup are they working on? Kmart has 70 percent off all fine jewelry and 50 percent off sterling silver jewelry, JC Penney also has 60 percent off sterling silver jewelry, and Sears has 50-70 percent off all fine jewelry. Kohls is featuring half-carat tw champagne or black diamond jewelry in 10k gold for $215 and 1 ct tw diamond jewelry for $579.99. JC Penney is promoting a 1 ct tw ring and earrings for $499.99 Wal-Mart has quarter-carat tw studs for $48.84, 10k gold rope or figaro chain, 18” or 20” for $24.88, and 10k gold hoop earrings for $8.88.

Think social networking sites are just for teen party photos and favorite bands? According to a new survey from Unity Marketing, 40 percent of luxury consumers visited Facebook, YouTube, MySpace, or another social networking site in the past three months. The fact that these consumers have an average income $150,200 and an average age of 43.6 years doesn’t mean they don’t like to waste time online.

“Even middle-aged affluent consumers are networking online,” says Pam Danziger of Unity Marketing, who surveyed 1,074 consumers who made a luxury purchase in the last three months. “Young affluents, those 40 years and under, were the most active social networkers, but even one-third of the over 40 year old consumers reported visiting a social networking site.”

Jewelers are already interacting with potential new customers on social networking sites. In this month’s Modern Jeweler, we interview retail jewelers who are marketing on Facebook and MySpace in Online Marketing 2.0.

Of course, the 40 percent figure includes visits to YouTube, which isn’t primarily a social networking site. Videos on YouTube include a wide range of topics, from how-to to how much. (Modern Jeweler’s Million-Dollar Bling: Basel for Billionaires video has been viewed 3,405 times in the last six months.) LinkedIn, the business networking site, would have been better addition to the question. LinkedIn even has a few De Beers executives as part of its community.

The conventional wisdom about many consumers now researching luxury products online before buying was supported by the study: 46 percent of buyers of luxury fashion, fashion accessories, cosmetics, jewelry and watches used the Internet in support of their recent luxury purchases and spent 12.5 percent more on average.

“They used the Internet both to research purchases, especially to compare prices and read other customers’ reviews, as well as to make purchases,” Danziger says. “The research also shows that they will visit a retailers’ website to browse before they head out to the store. The lesson is that luxury marketers and retailers which offer their customers a website get a significant return on investment in terms of more spending.”

The consumers surveyed say the convenience of shopping at home is the top reason to shop online, followed by a wide selection of merchandise. They also report comparing prices and evaluating product features. “When asked what features were most important for a luxury shopping site to offer these luxury consumers, they were adamant about three features – in depth product information and specifications, detailed product pictures and a flexible return policy. They were far less concerned with company or brand news, lifestyle content or a store locator,” Danziger says.

To understand how the best companies train and motivate their retail sales associates, reporter Alex Frankel spent two years selling a lot of stuff in stores. He writes about his experience in a recent article Magic Shop in Fast Company and a new book, Punching In: The Unauthorized Adventures of a Front-Line Employee. Of all the retailers he worked for, Frankel was most impressed with the passion and effectiveness of sales associates at the Apple store. I’ve mentioned before the astonishing success of the Apple stores on a sales-per-square foot basis. At $4,032 per square foot overall, Apple’s chain of 174 stores outperforms even Tiffany & Co., which has sales of $2,666 per square foot. (And the flagship glass cube on Fifth Avenue does much, much more.) Lustre magazine recently just surveyed top independent luxury jewelers for Buying Luxury, a best practices story in the September/October 2007 issue, and their sales per square foot ranged from $2,000 to $3,000.

Can jewelry retailers learn anything from Apple’s sales practices? Of course, Apple has more than its share of brand evangelists it can hire to spread the gospel of Mac. And it’s easier to sell when your store is always packed: Apple stores are destinations and people hang out in the stores for hours on end, surfing the web and checking email.
But Frankel found that the success of Apple sales associates also has a lot to do with training: “A series of podcasts I listened to and watched showed that selling was all about the approach. I shadowed other workers as they executed the company’s three-step sales process. They explained to customers that they had some questions to understand their needs, got permission to fire away, and then kept digging to ascertain which products would be best. Position, permission, probe.”

As Frankel points out, this approach to selling positions employees as consultants rather than salesmen and changes their attitude: “At an Apple Store, workers don’t seem to be selling (or working) too hard, just hanging out and dispensing information. And that moves a ridiculous amount of goods. When employees become sharers of information, instead of sellers of products, customers respond.” Jewelry, like computers, is an industry that can be intimidating to the first-time buyer. An approach like Apple’s, low on pressure and high on information, might prove just as effective for jewelry too.

It’s November and that means it’s time for the new DTC Sightholder list. Of course, we are especially interested at Modern Jeweler, since we publish the world’s only Global Diamond Directory of DTC Sightholders and Select Diamantaires. Generally, the Directory is published in January but this year we’ve delayed it until March, since there have been many indications that there will be significant changes in the sightholder list this year. Some analysts have even suggested that all New York sightholders will be dropped. Other commentators have argued that they shouldn’t be, while admitting it seems likely.

The latest evidence, which has been analyzed in depth by Chaim Even-Zohar, is a new DTC brochure announcing a support group for ex-sightholders. The “Sightholder Support Programme,” is a package designed to assist those clients who will no longer be Sightholders on March 31, 2008 by offering “high profile consultancy support in managing its reputation and relationships with key stakeholders.”

Any group that requires a program for support is likely to be large in size don’t you think? We’ll know soon enough.