According to data from Framingham, Massachusetts-based research firm IDC, online jewelry sales will grow from $77 million (US$) in 1999 to over $1 billion in 2004 and outpace the growth of consumer e-commerce as a whole.
The report, “A Diamond in the Rough: U.S. Online Fine Jewelry Market Forecast and Analysis, 1999-2004,” says several factors are contributing to the growth of the online jewelry market: an increasing number of jewelry e-tailers; lower prices for online goods; technology improvements that enhance online viewing; and the no-pressure atmosphere of online buying.
Defying Conventional Wisdom
IDC believes the online jewelry market will defy conventional wisdom that says consumers want to see and hold expensive jewelry before purchasing. That perception has made the fine jewelry industry late to join the e-commerce party, which means the market’s development is lagging about a year behind other online markets.
The industry’s tardiness, according to IDC, could work to its advantage. According to Jonathan Gaw, a research manager with IDC’s Consumer eCommerce Major Purchases program, “Although they face the same challenges with regard to channel conflict and infrastructure development as those confronted by their counterparts in other industries, fine jewelry e-tailers will be able to apply the lessons of those that came before them to accelerate their learning curve.”
Most consumers who purchase jewelry online will be experienced Internet shoppers and will be comfortable with the online purchasing experience, the report says. Such shoppers may readily shift to online jewelers from brick-and-mortar retailers, but their expectations are likely to be high.
Gaw said, “Online jewelry consumers will know what a good Internet selling experience is, and they won’t tolerate a poor one from an e-tailer trying to sell a $1,000 item.”
IDC says that brick-and-mortar jewelers can move online more easily than brick-and-mortar companies in some other industries because brand name trust carries more weight with fine jewelry purchases than with other product lines.
Gaw said, “While most traditional retailers moving into cyberspace pay lip service to a bricks-and-clicks strategy, that tactic does have relevance in the case of fine jewelry. The high price tags mean that customers will probably always require some hand-holding and assurances during the process, and they will value the security of having a store to which they can return merchandise.”