IMRG/Cap Gemini report announced that the online retail market grew by 20% in June 2010, and in particular, web purchases of accessories rose by 73% compared with the same month last year. Martin Hill, managing director of digital agency Brilliant looks at why this might be, and what online has done to encourage this new retail trend.
Looking at the IMRG/Cap Gemini report results, there are a number of identifiable factors that were clearly working in favour of etail, with some being perhaps more obvious than others. June 2010 was a feel-good month. The fine weather, large sporting events and garden parties believe it or not all contributed to the perfect market conditions for online buying.
Any whiff of postal strikes had long since been forgotten and budget cuts weren’t quite as bad as people were expecting. This resulted in a general air of confidence and a sense that we’d come out of the worst of the recession.
But it was the weather that was the most important contributor to this general feeling of wellbeing. This June most of the UK experienced the kind of sunshine usually associated with more Mediterranean climes. People were less inclined to jostle with other customers in hot and sweaty stores, but no less inclined to look on-trend, preferring instead to take to their laptops in the comfort of their own homes or gardens to purchase their summer attire.
Clothing plays a part in that, of course, but as we all start to wear a little less in the summer months, jewellery, and accessories in general, become more important in setting us out from the crowd.
The World Cup and Wimbledon coinciding with the good weather, further encouraged this sense of positivity (at least in the early stages). People enjoyed the shared experience, and this produced a very social month.
While the effects of social media on ecommerce have been widely noted, for this month the social aspect seemed to have more in common with old-fashioned social networking/interaction – people meeting up in large numbers to enjoy being outdoors. This in turn lead to more potential for word of mouth, more opportunity to talk about the latest trends and more chances to physically share them – showing your friends your latest jewellery purchase rather than mentioning it in your Facebook status.
Whilst these favourable market conditions come and go, and are largely beyond our control, it is those who have had the best ecommerce strategies in place who will have reaped the benefits. Technology has also played a big part in changing how people shop for jewellery and accessories. The rise in the number of tools available for jewellery ecommerce has particularly affected this trend. The technology on hand has gained in strength and now allows users better methods with which to view and select different items and has clearly added to the increase in sales of accessories. “Build your own” and “mix and match” are good examples of this, allowing customers to put items together to build outfits and add accessories, or build their own individual jewellery pieces.
To put it simply, if a retailer hasn’t got these tools, the user is less likely to add more than one item to their basket per sale: As a direct result of the stack ring application we built for Daisy, the jewellery retailer received a significant upturn in multiple purchases and the average basket size increased significantly for online sales. Interestingly, there was also evidence that customers used the online tool before visiting stockists to make purchases of more than one item. It seems therefore, that the convenience and ease of trying the different ring configurations in the comfort of one’s own home, proved very attractive for the customer, and ultimately resulted in an increase in multiple purchases.
The IMRG/Cap Gemini report also noted that multichannel retailers saw their online trade grow by 27% compared to last year. As the public becomes more familiar with shopping online, so retailers have had to up the ante in terms of the experience they offer their customers. With jewellery in particular, this has perhaps been slower to evolve onlline than some other areas of retail, perhaps because it’s more associated with the traditional face-to-face sales that previously only bricks and mortar stores could offer. Now, retailers can use technology that allows them to overcome this: high quality images that can be moved, or zoomed in on, video content, and the sharing of favourite items on social media sites, all this adds to the users’ ability to engage and trust in online buying.
With clothing, people are perhaps slightly wary of purchasing online because of the fit of the item, and the hassle of returning it if it’s not suitable. With jewellery, although it’s something people might prefer to try in person, particularly in the case of high-end items, it’s actually a “good online product”. With accurate sizing and rich media you have a good idea of the detail, the fit and how it will look, and therefore you are more likely to be happy on receipt. However, if you do wish to send the item back, the size means less posting and packaging issues for the customer.
One brand that is synonymous with high-end jewellery etail is Fabergé. This iconic brand relaunched online in 2009, with a site designed to emulate the consumer experience of a Bond Street shop. With its new-look online presence, any user can view the site’s ‘shop window’, but to enter the website the visitor must first submit a phone number, and after a telephone consultation with a sales consultant, only then can they have access.
For the rest of us mere mortals, tools like Daisy’s stack ring application, or Links of London’s charm bracelet designer serve to present jewellery online in a manner that is more interactive and accessible.
Within the jewellery industry, those that aren’t going online, or have dipped a toe in the water will be looking at their competitors, and noting the great results they are getting from ecommerce. Retailers are also realising there’s a lot more to ecommerce than just building a website; as in the “real world” the customer and their experience of shopping with your brand is everything. So, in addition to giving customers an easy and pleasing purchasing experience, retailers have got to think about what happens leading up to this point – ie how the customer can find you (the advertising, brand messaging and marketing), and why they should decide to shop with you (insight, social media, reviews, reputation etc) and what happens after the transaction, i.e, hassle free fulfillment, efficient returns policy etc – even turning complaints around to becoming a positive experience.
While there is a definite upward trend, ecommerce as we know it today is still a very young medium – little more than a decade old. As a channel it’s still growing up and even in the past year or so there’s been a huge advance in how it is used and presented; for example, the increasing influence of social media on purchasing decisions, eg, user generated reviews, recommendations via social networking sites or the use of twitter for customer relationship management. Now we know how this works, in the next year, there will be more of a focus on refining these methods and rolling them out to a wider retail audience: the technology; the interactive content; and the marketing strategies.
I would predict that more jewellery and accessories retailers will be optimising their online offering in the coming year – going transactional for instance or adding more content to their sites. In turn this will encourage the digital sector to come up with increasingly more innovative ways for them to break away from the pack and be the leaders of their retail space. Online presents more opportunity to create brand loyalty, separate brands from their competitors, and ultimately, on the evidence of these figures, achieve more sales.
Martin Hill
Managing Director, Brilliant