The online retail experience keeps reinventing itself almost with the pace and energy of technology itself. Consider that Cyber Monday only became a referenced term in 2005 and already feels a part of the U.S. holiday tradition. Along with Black Friday, it has also become a barometer of consumer sentiment and an important avenue to seek out discounts in a price-sensitive economy.
It seems this year online sales gained even greater traction.
The pace of ecommerce growth continued at an impressive rate and naturally outdid its brick-and-mortar counterpart. According to digital metrics firm comScore, online sales on Black Friday rose 28 percent year on year to $1.04 billion and on Cyber Monday increased 17 percent to $1.47 billion. On Thanksgiving Day, online sales grew 32 percent to $633 million.
The numbers show that consumers are considering price points and convenience in their shopping experience and are better informed to ensure both.
It’s easy to forget that many of the mobile devices we take for granted today were not yet invented just a few years ago.
In a very slight twist of irony for the jewelry industry, while many of those devices can potentially enable better sales for the trade, they’re also among its biggest sales competitors. For now, though, it’s worth noting that mobile technologies are having an increasing influence on how consumers buy, if not in facilitating the sale itself.
A pre-Thanksgiving survey by BIGinsight on behalf of Shop.org, a division of the National Retail Federation (NRF), found that the number of shoppers planning to use their smartphones or other mobile devices on Cyber Monday increased 14.4 percent year on year to 20.4 million this year, up more than five-fold from the 3.6 million who did so on Cyber Monday in 2009.
comScore estimated that while just 10 percent of ecommerce sales were made via mobile devices in 2011, the number is expected to grow 30 percent each year thereafter. IBM estimated that the percentage of sales conducted through a mobile device this past Cyber Monday in fact jumped 96 percent from 2011 to 12.9 percent overall.
Perhaps more significantly, however, Gian Fulgoni, comScore’s chairman, expects mobile devices to have a bigger impact on the retail market as an important in-store price comparison tool. “The consumer goes into a store, gets the touch and feel of the product, takes up the salesperson’s time, and before you know it out comes a smartphone and they’re doing price comparisons and even making their purchases online,” he told Bloomberg TV this week. A February 2012 report by McKinsey & Company found that 69 percent of mobile users would delay buying or buy elsewhere after using their mobile device in store to check on a product.
Back at home, or in the office, the online experience certainly is a calm alternative to store shopping, especially when the maddening holiday crowds are at their peak. That would probably ring especially true for the mid-to-higher range jewelry consumer. Websites have also upgraded to more efficient delivery and payment systems, helping to raise confidence to buy online.
The trend is therefore both daunting and exciting for retailers.
It challenges them as it reduces their control over the sale and forces them to think beyond their traditional business practices. It also presents a tremendous opportunity for retailers, or those wishing to encroach on their space. Yet, comScore estimates that only about 10 percent of all discretionary sales in the U.S. are currently made online, a relatively low amount. But while the verdict is out on how much of the remaining 90 percent is up for grabs, there is no doubt the online space will continue to grow for years to come.
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Currently, the market is dominated by exclusive etailers, particularly Amazon, while the supplementary websites of brick-and-mortar operations follow at a distant second. Similarly in the jewelry space, Blue Nile enjoys significant market share while traditional jewelers battle to compete on price and margin.
Consumers are clearly getting used to buying jewelry online, breaking the “touch and feel” attitude that many believed the industry would have to overcome. In fact, jewelry and watch sales rose 17 percent this Cyber Monday to rank as the fifth top-gaining product category behind digital content and subscriptions, consumer electronics, computer hardware, and video games, consoles and accessories, according to comScore. Not bad, considering the electronic theme of the top four.
Jewelers have taken note and are pushing their platforms and their online product assortments while developing their marketing strategies accordingly.[/two_third]
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“Jewelers have taken note and are pushing their platforms and their online product assortments while developing their marketing strategies accordingly.”
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Blue Nile, which symbolically rang the bell to open trading on the NASDAQ exchange on Cyber Monday, said it expects acceleration in the growth of its non-engagement jewelry during the holiday selling period. Signet Jewelers, while reporting very modest overall sales growth of 0.8 percent year on year in the third quarter, saw its online sales increase 35.2 percent to $19.6 million, less than 3 percent of their total sales. Similarly, in the Far East, Chow Tai Fook noted that its online sales grew three-fold in the six months to September 30, 2012.
Others see similar growth opportunities and are expected to up the ante in the coming weeks as pre-Christmas shipping deadlines approach.
Beyond their sales, many are effectively using online platforms such as social media sites to promote their product lines. One social media analyst told Rapaport News that while retailers are not necessarily selling their products on social media sites, they’re certainly effectively using sites such as Facebook and Twitter to reach out to their customer base. “They might post a picture of a product or event and it’s not unusual for these to go viral among the company’s fans or followers,” he explained. What easier and cheaper way to maintain a relationship with the customer? Tiffany & Co., for example, has more than 3.2 million Facebook users who have “liked” its page.
The internet therefore continues to evolve and create new opportunities in the retail space. While it may initially have presented a confidence barrier for consumers, particularly jewelry shoppers, it now serves to give them added assurance to buy, especially in the price-sensitive, tough economic conditions that exist today. As consumers search for bargains, online is naturally their starting point, and increasingly, their end destination. That leaves it up to retailers to use all avenues at their disposal to catch consumers’ attention as they hope to squeeze out a successful conclusion to 2012.
