It Isn't Easy Being a Retailer
With recent business news headlines predicting a shakeout and consolidation among online-only retailers, I can just see traditional jewelers nodding their heads and saying See, it isnt so easy to please fickle consumers who want everything yesterday and exactly to their liking!
E-tailers are just the latest in a long line of business ventures to learn selling to the public is one tough business. From Amazon.com and e-Toys to Ashford.com, stock prices are skidding and venture capital is disappearing, reports The Wall Street Journal. While many e-tailing experts predict the anticipated shakeout in the crowded business-to-consumer arena is good and necessary, its worth examining where e-tailers are having trouble and where traditional jewelers can find an advantage:
- Intense competition forces e-tailers to keep prices low and to offer goodies such as free shipping to compete. Hope is fading that even category-killer brands eventually will be able to raise prices to make a profit. Online shoppers are trained to wait for deals and discounts.
The jewelers advantage: You have established prices, based on the value-added services you offer consumers. True, lower online prices have taken some sales, but if you can stick to your guns (and prices), the worst price cutters will die of self-inflicted wounds. Then its up to you to bring enough value-added services that customers patronize your store at the counter or through your Web site. Its a big challenge, but the retailers who offer these value-added services will have no trouble.
- Lavish ad spending, especially in traditional media, is crippling some e-tailers. Yet theyre dependent on ads to quickly establish brands in a crowded marketplace and drive traffic to their sites.
The jewelers advantage: If youve done the job right, you already have a trusted brand name. Just let consumers know youre open for business online as well as in-store and youll easily overcome many of the new names. A recent study by analysts McKinsey and Media Metrix shows the vast majority of Web users are newcomers still figuring out how to use the Internet to buy things. They gravitate to familiar brand names as beacons in this brave new world. Wow, what an ad campaign you could make out of that: Dont worry, anxious consumer, your old friends at Friends Jewelers will take the fear out of online jewelry shopping.
- Cost advantages are disappearing, as e-tailers acknowledge they need more warehouses and sales clerks than anticipated to fill demand and please customers. So much for virtual stores! It takes an army of customer service representatives and acres of warehouse space all over this big country for the national e-tailers to service their buyers.
The jewelers advantage: Once again, vigilant attention to customer service is at the core of successful jewelers businesses. You already know how how much work it takes to please customers. Its the devil you know rather than the devil you dont know, as my grandmother used to say.
So fear not, traditional jewelers. Your experience and professionalism are worth a lot after all. But get those Web sites up. The best pure e-tailers wont take long to figure out your secrets. And as in any evolutionary struggle, the strong will survive.
Peggy Jo Donahue