Local Jeweler or Online Jeweler?
By Bryan Boyne G.G. (GIA) , Thursday, May 03, 2012 3:07 AM
With the explosive growth of e-commerce in the last 10 years, there is not much that you can’t buy online today. But certain products seem to lend themselves to purchasing online, while others are more debatable. Diamonds and jewelry are items that most people would be naturally hesitant to purchase online, but a deeper look reveals a different picture. The local jeweler is being challenged like never before by online merchants.
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Products that are identical from one to another are easier for people to buy online with confidence- especially if they are relatively inexpensive. In the early days of e-commerce the conventional wisdom was that people would buy things like books and cd’s online if the price was right, but that more complicated or expensive products would not be sellable online.
Diamonds and jewelry are products that tend to be unique in terms of specifications, quality, workmanship and provenance. Companies that sell these products tend to have different policies and provide unique value propositions. So it is difficult for shoppers to gain a high degree of confidence that they are getting a secure and solid deal, unless they were able to see the products in person at the local jewelry store.
But the benefits of buying jewelry online can be substantial. That’s why a growing number of shoppers are doing just that. Because an online jewelry store is at a disadvantage in not being able to present the products over the counter and in person, they must do more in terms of providing information and assurance. They also must create a price advantage or some other compelling incentive such as a service plan or guaranteed trade-up benefit.
Another way that an online jewelry store can be the best option for the consumer is the state sales tax consideration. Online sellers who ship products to customers in states where the seller does not have a business “nexus” are not required to collect tax on the transaction, which can reduce the invoice amount by hundreds, even thousands of dollars when compared to buying from a local jeweler.
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Over the past decade, many excellent companies have established themselves in the online jewelry space. Likewise many fine traditional jewelers have developed a web presence and some are even competing in the e-commerce space. Even those that do not compete directly are being forced to recon with the internet savvy shopper who is much better educated today when walking into the local jewelry store.
An online jewelery store has distinct advantages in terms of overhead costs and can sell for less than local jewelers. E-commerce specialists have also harnessed information technology that enables the presentation of rich catalogues of “virtual” inventories which provides a wider selection as well as a more convenient shopping experience for the consumer. More and more, these products are being presented online with high quality images and videos that not only teach about the products but create an experience similar to an in-store viewing. Light performance images give diamond shoppers unprecedented information about the certified diamonds they are considering so that detailed comparisons can be made. Local jewelers who wish to compete are being forced to become more knowledgeable and provide much more extensive product information than ever before.
The lesson for local jewelers is to compete with the internet sellers in terms of education, information and selection and win the business from their advantage of local viewing and service. For the consumer “the best of both worlds” is to deal with a top online jeweler who also has a brick and mortar showroom.
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