Soaring online sales boost profits for jewellery retailers

By James Knowles

Jewellery retailers are being urged to invest in transactional websites to cash in on the growing popularity of online shopping and boost profits.

A report by market research company Vision Critical has revealed that online sales are on the rise. The report claims that 88% of consumers shopped online in the last 12 months, which is just 8% less than the number of people physically spending in stores. Department stores including John Lewis already sell online to consumers shopping out of hours, and jewellers are being warned they will lose out unless they do the same.

Figures released by market research company Mintel show that internet sales rose from £15.7bn in 2008 to £17.8bn in 2009, showing a gradual increase year-on-year. Mintel director of retail Richard Perks said: “The market is stabilising but there is definitely demand for luxury goods online and sites like Net-a-Porter have done very well. I think having an online presence is highly important and I would advise retailers to invest in online transactional websites to draw in more custom.”

Etailer Astley Clarke relaunched its online boutique in October 2009 and profits rocketed in the second half of last year as shoppers increasingly took to the internet to purchase jewellery. Own-label Astley Clarke jewellery sales rose 39% at the end of last year, due to a surge in female self-purchasing and the male gift market, and this year the company reported a 63% increase on like-for-like sales in January 2010. Director Bec Astley Clarke said: “Our next day UK delivery service is perfect for impulse buying and when customers shop online they can do so without feeling intimidated. You can look at a £6,000 ring knowing that you may not even purchase it. I think Astley Clarke is proof that people are willing to buy online, we are an e-business first, and our showroom just compliments the website.”

Jewellery retailer Fabergé also has just one boutique, based in Geneva, and chief marketing officer Fabric Paget said the company has concentrated its efforts in online retailing as part of a “client centric” approach, catering for those who don’t live close to city centres. He said: “For most high-end jewellery clients it is the jewellery and personal relationship that counts more than store location or interior. That is why we’ve created an intimate website that allows customers to shop 24/7.”

Marketing director of the Interactive Media Group (IMRG) David Smith said while the last three years have been marked by the rise of multi-channel online retailers such as Tiffany & Co., reaching customers through stores, catalogues, advertisements and the internet, he expects this to filter down to independent jewellers. He said: “The online market is now maturing and we expect to see smaller jewellers coming online. If you’re stocking unique ranges then having an online presence could take you from a local to an international level, the potential market is huge.”