There is no denying it: the e-commerce industry is booming. By 2016, the online marketplace is expected to grow to a staggering $1.85 trillion. Increasing rates of Internet access in emerging markets, most notably in India and China, continue to fuel the growth of online commerce, connecting more consumers than ever before.
In spite of the adoption of e-commerce by nearly every commodity and service, there have been a few that have been a bit slow make the transition. One of those is fine jewelry. Experts say the reason the fine jewelry market has integrated so slowly with e-commerce is because fine jewelry purchases, like buying an engagement ring or an anniversary necklace, are emotionally charged purchases. The emotional aspect of the purchasing process means consumers want to be able to experience a piece of jewelry before they purchase it.
To find out more about the future of the jewelry market, a staggering $70 billion dollar industry, I spoke with Raphi Mahgerefteh, founder and CEO of Allurez, to find out how it is making the leap to e-commerce. Allurez is a disruptive company that is making waves in the market with their virtual ring galleries.
Here's what I learned from my conversation with Mahgerefteh about where the industry is headed:
1. Modern-day concierge jewelry. Concierge jewelers, or personal jewelers, are small operations. Unlike major retail chains, these jewelers tend to operate by word of mouth and offer a much higher level of service, along with higher-end customized jewelry pieces. With the rise of e-commerce, we'll likely see the rise of modern-day concierge jewelry.
2. 3D printing. As 3D printing becomes more common with decreasing costs, it is likely that fine jewelry companies will make use of this technology to provide customers with samples. This means a customer will be able to try out the piece in their daily life, judging size, comfort, and wear before they make a commitment. This also allows the emotion component of the purchasing process to be better integrated into the e-commerce shopping process, allowing the customer to connect with a particular piece before he or she purchases it.
3. Ultimate customization. Consumers are becoming more interested in the variety available through customization. A survey conducted by Bain & Co. found that roughly one quarter of shoppers are interested in online customization options. With e-commerce, retailers can expand the number of options they offer to their customers. This will creates more options for customization, enabling consumers to customize more aspects of jewelry pieces.
Similar to the direct to consumer business model of Tesla, the fine jewelry market will soon break through to consumers by encouraging them to order some of their most expensive and significant items with the touch of a finger because they're receiving an ultra-customized product.
4. Better catering to mobile buyers. The segment of mobile buyers is big, and getting bigger. People are buying more and more on their phones, and that includes fine jewelry. Even when making a purchase in store, 82 percent of shoppers say they consult their phones before making a purchase, according to Google Inside AdWords study. Jewelry retailers will increasingly cater to these mobile users with mobile apps and mobile-friendly websites.
5. A more comprehensive buying experience with more sophisticated websites. As consumers turn to e-commerce to purchase fine jewelry, retailers will work to develop a more comprehensive buying experience, particularly with more sophisticated websites. The goal will be to bring the luxury of an in-store purchasing experience to an online purchasing experience. That means high-quality images, an excellent navigation scheme, and easy-to-use product configuration settings.
6. Competition. As more jewelry retailers realize the opportunity in the e-commerce sector, the market will become more competitive. That means consumer expectations will rise--they won't just be looking for an excellent piece of jewelry, they will also be looking for a great shopping experience. Retailers will need to step up their game to stay competitive in this changing market.
7. On trend. Jewelry e-commerce means that stocking and supplying the trendiest jewelry will not only become more important, but will result in jewelers meeting demands more quickly. It will no longer take months to get the trendiest cut into their brick and mortar store, they will be able to feature that product on their website and more quickly showcase that style to the customer.
Online jewelry sales will continue to flourish steadily for the next few years and as the industry implements these innovations to meet consumer demands, that growth rate will accelerate.
The timing of this growth will revolve around consumer preferences as they become more and more comfortable in buying emotionally charged products online. Jewelry will fall into this category.