Modern Jewelry Trends

One of the easiest ways to build traffic on your website and collect names, addresses, and emails of potential new customers is a sweepstakes. But anyone who has tried to set one up knows just how complicated all the rules and regulations can be, requiring hours of legal work by a specialist. Now a new online service called Caffeine is offering to do the grunt work for you. The company combines many small companies into one large sweepstakes, taking care of all the paperwork and even the prize. Caffeine is run by ePrize, who runs promotions for large corporations, like Disney and Coca-Cola. The best part about the new service is that you pay only $1 for each new customer name you collect, you don’t have to pay a set fee or set-up costs. Like other online advertising, you can set a limit to what you spend each day. The contact names you pay for can be limited to a geographic area: you can opt only to pay for consumer names with addresses within a 20-mile radius, for example. Caffeine can offer contests for so little because many companies are pooled together into a single giveaway. The prizewinner might not be from your list of entrants and there is no limit to the number of entrants. But because several contests are running at the same time, you can join a contest easily with little or no lead time. Another promotion offered by the company is customizable online coupons that you can use to drive traffic to your store. Caffeine will really be useful if it can be incorporated into search results advertising: consumers may be more likely to click on ads if they know the company has a sweepstakes or a coupon. They are also more likely to send a link to the site to friends and family.

The Sunday New York Times this week had a major feature on leading online jewelry retailer Blue Nile, When Buying Jewelry Starts With a Mouse, which contains some interesting cocktail party factoids (just in time for 24-Karat Club weekend!) One assertion: “Blue Nile ranks behind only Tiffany & Company in diamond ring sales, according to industry analysts. Experts also believe that probably only Tiffany’s and the Zale Corporation….bought more diamonds from wholesalers than Blue Nile last year.” Well, not sure where Sterling fits in here, since they are now bigger than Zale, but undeniably Blue Nile is very successful at selling diamonds (less so for other jewelry, which makes up a significant portion of the sales at other large jewelry retailers.) The article gives an estimate that Blue Nile bought $170 million in diamonds last year. Judging from quotes in the story the source for these assertions is probably Ken Gassman, industry analyst. Blue Nile’s CFO, Diane Irvine, says that the retailer sells a ring costing from $20,000 to $40,000 nearly every day and that this December more than a dozen rings over $50,000 sold. (Another cool factoid: rings above $50,000 are delivered to the consumer by armored car.) Much of the article discusses retailer efforts to pressure suppliers not to sell to Blue Nile. According to the article, Blue Nile’s overhead is just 13 percent of its revenues, allowing the retailer to sell diamonds at 20 percent over cost and still make money. Retailers quoted in the story, Mark Moeller, Gary Gordon, Jerry Robbins, and Zale treasurer David Sternblitz, admit that Blue Nile has dampened profitability and sells diamonds cheaper than brick-and-mortar stores but say that buyers can’t see the diamonds, compare them side-by-side or receive the service they would get in a store. Gassman, who says that Blue Nile is 35 percent less than Zales, delivers the final blow, discussing retailers who can’t or won’t match Blue Nile’s prices: “Their attitude is “Our prices are higher but we provide you services, and we’ll hold your hand, and we’ll wrap it up all pretty and such.” Will that work? the story asks. “I think it’s relevant that we have seen an acceleration in the closure of specialty jewelers in recent months,” Gassman replied.

As the world’s top online retailer, Amazon.com has done pretty well building a one-stop shopping destination, even aggregating other sellers’ merchandise into one huge product database. But the e-commerce giant took a step toward another possible marketing strategy this week with the launch of Endless.com, a website that specializes only in handbags and shoes (many of which are also carried on the main Amazon.com website.) Endless.com provides an enhanced shopping experience for shoe and handbag shoppers, with a very innovative shopping cart, large up-close product views (including every angle including the sole!), and awesomely smooth magnification of every product image. These bells and whistles are combined with the ease and comfort of a standard Amazon.com shopping cart. Frankly, it’s very cool. As any woman will tell you, shopping for shoes and handbags must be a pleasure to be savored, not a chore to be sped through, and this site lives up to the challenge. Of course, my first immediate thought is that this is exactly what Amazon needs to do to create a more luxurious jewelry shopping experience, particularly if they want to engage the female self purchaser. Although Amazon.com’s top holiday jewelry are basics purchased by men, the site does carry a lot of surprisingly beautiful jewelry (including a great selection from trendsetting online store Ylang23. In fact, since I am telling this large corporation what to do now, they should buy Ylang23. Immediately, before Blue Nile does.) Sites like Endless.com, with more emphasis on the shopping experience, are a sign of things to come as women are now the biggest shoppers online (although it sometimes seems they are all selling to each other on eBay.) The most successful jewelry e-commerce sites, like most successful jewelry retail stores, got that way by selling diamonds to men. Perhaps the web (and the real world) can build another model for success?

The 2006 holiday season was the best ever for Amazon.com. The e-tailer’s busiest day was December 11, when customers ordered more than 4 million items. Top selling jewelry styles on Amazon.com this holiday season included 14k white gold round diamond stud earrings, platinum round diamond four-prong stud earrings, and a sterling silver open double flower pendant. Top watches were a Bulova women’s diamond bezel chronograph watch, Invicta men’s automatic Pro Diver S2 watch and Movado women’s Amarosa watch.

One of the best ways to build a profitable online jewelry business is to specialize. You would be surprised how many people you can reach, even in a tiny product category. In the New York Times this morning, I was inspired to find a small ad for a Scarsdale, New York jeweler. The Village Goldsmith has decided to reach out to a wider market by specializing in dog-themed jewelry. This store is offering jewelry with hundreds of different dog varieties. (This is a growing trend: see Modern Jeweler’s Best of Breed fashion spread in the November/December 2006 issue. Pet-themed jewelry is also scheduled for a feature on the Today show on Monday, December 4.)
The Village Goldsmith’s site is pretty rudimentary but it gets the job done. And the Village Goldsmith isn’t the only one mining jewelry niches. Cliptomania sells non-pierced earrings. Another jeweler I know sells high-end medical jewelry. The idea is to go deep and narrow: although this kind of niche is difficult or impossible in a brick-and-mortar store, the web brings you a national (and sometimes even international) audience, so even if a half-a-percent of consumers would be interested in your product, it adds up to a nice potential business. So if you want to launch an online store and don’t want to invest the money to compete with Blue Nile, Tiffany, QVC, and jewelry.com, consider carrying something they don’t.

Consumers looking for information on platinum often visit two consumer sites sponsored by Platinum Guild International USA, www.preciousplatinum.com and www.engagementguide.com. Now those consumers will be able to find platinum retailers as well as learn about the heavy white metal. The stores listed in the new Find a Retailer section “not only offer a wide selection of platinum jewelry but also have a strong educated sales staff that will provide a great shopping experience.” Think you qualify? To be listed, contact Michelle Peranteau at (212) 404-1603 or mperanteau@pgiglobal.com.

Joining “Black Friday” in the list of shopping occasions is “Cyber Monday,” the November 27 kickoff to the online holiday shopping season and one of the biggest online shopping days of the year. (Last year only December 12, the last day for free shipping was bigger.) But there’s one big difference: Cyber Monday isn’t exactly a holiday so most shoppers are actually at “work.” Of course, we all know we only shop during lunch, right? “Online retailers typically see huge surges in website traffic during traditional lunch hours,” said Scott Silverman, Executive Director of Shop.org. “Shopping at work can be a great way for many consumers to complete holiday buying without having to worry about sneaky gift recipients looking over their shoulders.” (As far as sneaky bosses are concerned, you are on your own.) Cyber Monday sales will likely be even bigger this year as retailers launch special lunch hour promotions and discounts to turn browsers into buyers. The number of people who will shop online for holiday gifts from work is expected to surge to 61.0 million people this year, up from 51.7 million people last year, according to a recent Shop.org survey conducted by BIGresearch. In fact, 51% of consumers with Internet access at work plan to do some holiday shopping online from the office, up from 44.7 percent last year. To make it easier for shoppers to cram their entire Christmas list into one lunch-hour session, Shop.org has created CyberMonday.com. At this site, which launches today, nearly 400 online retailers will be posting holiday promotions. (Basically the site is a huge array of banner ads.) When shoppers make a purchase through CyberMonday.com, retailers will donate a percentage of that sale to Shop.org’s Ray M. Greenly Scholarship Fund, which helps students pursuing careers in eCommerce. So they can learn even more efficient ways to separate you from your paycheck while you are earning it.

When a marriage or engagement falls apart, what happens to the ring? A new website hopes to turn this question into an online business model. I Do, Now I Don’t offers consumers an online auction platform for engagement rings. How is this different from eBay? The site is pretty primitive in design and functionality but it has some advantages. First, there are no listing fees. Also, the site accepts only rings with AGS, GIA or EGL reports for the diamond. And before the sale is completed, the site’s “in-house jeweler” will verify that the ring is as represented in the report or the deal is off. For that service, the seller pays a 5% commission. (Which makes it about the same price as eBay. It would be $311.53 to list the $6,499 radiant cut ring now offered on I Do Now I Don’t with all the bells & whistles and sell it with a Pay Pal payment on eBay: that’s 4.79%. The tradeoff is that eBay has a much larger audience but it does not check the merchandise for misrepresentation, although purchasers can use seller feedback for references.) This site is billed as the brainchild of a jilted man who was appalled that the jeweler who sold him an expensive ring three months before offered only 32% of the offering price to buy it back. Doesn’t ring true to me though: seems like a clever retailer is testing an interesting niche market. I’m not sure that this it will appeal to consumers even if it does get some media attention, though. Although the broken engagement stories are a new twist, do people really want a ring with bad karma? A much better solution to the problem is buying from a jeweler with a lifetime trade-in policy.

Although the most common promotional offer in marketing emails is a percentage off the purchase price, it’s dollars-off amounts that generate higher clicks. In fact, click rates for emails offering a specific dollar amount off are 45% higher than those offering a percent discount (even when the amount saved is the same.) A new study from e-mail service provider Silverpop Systems analyzed 610 marketing e-mails, both b2c and b2b, sent by 430 companies to 100 or more recipients. Why does a dollar-off amount seem more attractive? My guess is that percentage-off discounts are so prevalent in marketing they just don’t get much attention anymore (and doing the math is hard!) Design Within Reach offers good customers a coupon that is good for $50 on a purchase of any amount. The retailer found that most customers, pleased with the generous gift, ended up purchasing items worth far more than $50. The Silverpop study also found that lifestyle photography does pay off in higher e-mail click rates for b2c marketers. The average click rate for e-mails to consumers with lifestyle photography was 6.3% compared to 5.4% without it. The study uncovered a few surprises. Although a postcard-style design remains a favorite format for marketing to consumers, a newsletter format gets a better click rate: 7.1% versus 6.2% for postcard layouts. If you market to consumers, you should at least try a newsletter-style layout. Branding in an e-mail subject line results in 32 to 60% more recipients opening that email. So if you plan to market to your customers via email this holiday season, use your name and/or a brand in the subject line, use a newsletter format with lifestyle photography, and include a coupon for a specific dollar-amount off. Oh, and don’t try to save money by sending more than a hundred or so emails yourself unless you have some good email marketing software. Your message will probably be labeled as spam and blocked.

One of the holy grails of the web is a way to search visually. Stock photography agencies do a great job of this, allowing you to search for horizontal green fields or smiling engaged couples. But of course, they aren’t really searching visually, they are using keywords that staff members use to tag each image, from color to feeling and subject. As far as shopping search goes, no one has yet found a way to automatically parse through the thousands of items offered for sale on the web and show you other items that look the same. Not for lack of trying, of course. The latest attempt is a new search engine called Like.com. This new site offers accessories, including jewelry and watches, from many retailers and allows you to search by visual aspects, colors, and categories. Retailers include Amazon, ice.com, eLuxury, and others. Basically Like.com is an affiliate site: they make money if you end up clicking on a product and buying it from the retailer (all the transactions happen on the retailers’ sites, a tracking code carries the information that you came from Like.com.) So does it work? Well, it is pretty good at showing you items of similar colors and shapes. But much of the time, it appears to be using keywords rather than visual similarities. (Bangle searches will include cuffs that are called bangles in the description and tennis bracelets include money clips with tennis racquets on them.) It can definitely offer you pages of watches with orange straps or multi-strand pearl chokers, but earring silhouettes are a bit more problematic. Still, if you want to comparison shop basic yellow gold hoops or tennis bracelets across retailers, it does the job surprisingly well. But somehow it isn’t really much fun, despite a celebrity wardrobe search section and the lure of locating the handbag of your dreams. It’s definitely worth checking out, though, especially if you are an online retailer who has struggled with how to present customers with easy ways to find jewelry on your site. It may even inspire you to create some interesting keywords and create a few custom searches of your own.