Experienced multichannel retailer and editor-in-chief of InternetRetailing, Ian Jindal, reviews whether jewellery businesses can find a home on online market places.
The global jewellery market is estimated to reach $257 billion (£205bn) in 2017, due to the exploding success of online jewellery sales. Despite previous scepticism from jewellery retailers that customers would want to see the item for themselves and hold it in their hands before a purchase, jewellers are exploding across various marketplaces and making considerable profits online.
From boutiques to big sellers
Although there has been reluctance in the past to adopt marketplaces into selling tactics, retailers are starting to see the benefit of moving to the marketplace.
Jewellers, particularly, were initially concerned about joining these marketplace platforms. In addition to scepticism of selling jewellery online, major brands felt selling through third-party sites would lead to a loss of control over the way the brand would be presented to potential customers, and a reduction in loyalty would come from consumers being able to swap and change between brands on one site.
All retailers want to keep a sense of control over their brand, especially jewellers who may often hand-make their unique pieces. By avoiding marketplaces they achieved a sense of stability and control over each element of their strategy but also hugely cut down their potential reach. Boutiques can only sell to their regulars or a local audience, who may stumble across the store, whereas by joining marketplaces they could sell to anyone at a click of a button. And retailers are starting to realise that.
Jewellers making homes on marketplaces
Jewellers are making marketplaces their own, and using a range of these sites to tailor their audience and brand. Jewellers are now aware of the different searches that take place on various sites and the preferences of their users. For example, those searching through Not On The High Street and Folksy will want tailored one-off pieces made specially for them, while customers on Amazon Marketplace are aware of several copies of the same pieces being created and might want to get a similar ring to the one Rihanna used on her last music video.
With that understanding, jewellers are thriving on these platforms despite competition, with a $123 million (£98m) increase in online jewellery sales in just two years. Asia has had the biggest growth in online jewellery retail where it saw a CAGR of 62.2% in three years. There is a considerable market for retailers in Asia to continue blooming abroad. By selling on marketplaces Asian jewellers are expanding their potential audience and gaining access to millions of customers across the globe. And the same can be achieved through marketplaces by retailers in any country.
Marketplaces are proving to be really successful with consumers, offering easier access to merchants’ products and wide choice. Retailers may not gain the insight into customer behaviour that they value, but they’ll gain a wider consumer audience than would be exposed to their brands, compared to a company website alone, and the contact details for shoppers that they can then target and persuade to shop directly on their own websites, and in their stores.
So, what do jewellers need to know before selling on these platforms?
Although marketplaces will charge fees and take commission on your sales, they are profitable platforms. Each marketplace will vary in their charges so retailers must know which platform will reach their audience the best. Although some platforms, such as Not On The High Street, will charge more if a retailer is selling one off bespoke pieces, this will be the best platform to reach their customers, which will provide a good return on investment. This platform is essential for those who are wanting to continue selling unique one-off pieces while wanting to expand and grow their business.
Jewellers also need to know the rules and regulations of selling on a marketplace, whether they will need insurance separately or if this will be covered by the platform itself. Also, it might be recommended for retailers to discuss with other retailers about their experience selling on these platforms and how things work from the view of the seller.
Additionally, jewellers should assess the best method of processing payments. PayPal is a global method, well-embraced by consumers, but it can have expensive transactions fees. Therefore, retailers may wish to consider other methods such as Shopify which allows retailers to incorporate discounts. Methods of payment can also be regulated by the platform, so retailers must take this into consideration when choosing where to place their products