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September 1999
Managing: Technology
A Digital Heads Up
Technology expert Don Tapscott says jewelers have to join
the revolution – or they're toast
'You'd have to go back to the printing press for as great
a change as the digital economy will cause," says Don Tapscott,
author of The Digital Economy and Growing Up Digital: The Rise
of the Net Generation. "And there's never been a technological
revolution that's happened so fast." Tapscott says a billion
people will be on-line by 2003.
Jewelers' roles in this? They have to change or "they're
toast," says Tapscott, who spoke at the Gemological Institute
of America's International Gemological Symposium in June in San
Diego, CA Tapscott, who is chairman of the Alliance for Converging
Technologies, doesn't refer just to selling products on-line.
He says business-to-business buying and selling on-line is the
wave of the future.
Why are these changes inevitable? Tapscott points to the children
of the Baby Boom, sometimes called the Echo Generation, who began
to be born in significant numbers in 1977. This new generation
is large and will have a huge impact on the nation's commerce.
These young people are thoroughly immersed in the on-line revolution.
As they enter the workplace and become consumers, they will make
purchases in the medium they feel most comfortable with.
That's not to say tomorrow's consumers won't shop at real
stores too (this is a mall-loving generation, after all). But
they will add Internet shopping to the repertoire of consumer
buying habits. They also will expect toconduct business-to-business
transactions electronically.
Tech Lessons
Tapscott says the Internet is teaching sellers of products many
new lessons they have to understand and adapt to. Among them:
- Companies can't just sell a product; they have to provide
information too. Proctor & Gamble isn't just soap, he points
out. It's also advice on how to clean, what can be cleaned and
so on. A jewelry industry example: Tiffany & Co.'s Web site
provides a 3-D explanation of a diamond's cut that makes it easy
for consumers to understand this difficult concept.
- Consumers demand more choices and more customization, which
the Internet makes possible. Tapscott cites makeup and clothing
Web sites that allow women to customize products. The parallel
to jewelry could be custom designs that consumers create at your
Web site, in collaboration with your bench jeweler and a custom
design computer program.
- Pricing is much more fluid on-line as price comparison sites
become so popular. Haggling over prices could get more widespread
as consumers increasingly have all the information they need
to figure out what a seller paid for a branded product and how
much they're willing to pay for it.
- Successful on-line sellers will add value to their customer
relationships that make price comparisons less relevant. Customization
of products could be the key to added value. Instead of buying
Mrs. Field's cookies, for example, an on-line seller could allow
a visitor to create his own cookies, says Tapscott.
- The Internet is often self-organizing rather than hierarchical.
Wildly popular on-line auction sites, for example, offer a place
where products are sold buyer-to-buyer rather than all transactions
being controlled by one seller.
- Retailers aren't the only sellers on-line, as many jewelers
already know with chagrin. Manufacturers of products are finding
the Internet an easy way to sell directly to their consumers
without the retailer in the middle. This process, called "disintermediation"
must be countered by "reintermediation," Tapscott says.
This is where retail sellers create new value that makes it worthwhile
for consumers to visit. Examples include guarantees, personalized
services and product knowledge.
- Alliances of businesses are working together to create new
products from which they all profit. Because of the Internet,
these alliances are much easier to accomplish. A local on-line
bridal site, for example, becomes the place where the town's
jeweler, dressmaker, limousine service and catering facilities
are gathered together in a one-stop educational shopping mart
for couples.
– by Peggy Jo Donahue
Copyright © 1999 by Bond Communications.
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