When it comes to digital success and fine jewelry, channel conflict continues to drive a disproportionate amount of industry debate as we fight over shares of online sales that simply haven’t arrived. For three decades we’ve all been so focused on how to split online revenue we’ve ignored what it takes to actually drive these sales in the first place.
As I shared in my initial post on what happened to Gemvara, ecommerce alone is not enough. Especially as customer acquisition costs continue to grow and as well funded direct-to-consumer competition matures. When we were considering where we wanted to go with the technology, one thing was clear if we were to succeed: We needed a single voice. A focused omni-channel approach that offered a unified customer experience regardless if customers purchased in store and online through a retail partner, or if they purchased directly through us. The challenge however was not technical, it was political.
A large part of the reason I’m writing about instead of working on it is that I could never find a way to make what I see in my head palatable to those we spoke to within the industry. I believe that retailers should be allowed to sell the brands they offer both in-store and online (I also continue to believe most will end up selling a disproportionate amount in-store no matter how much effort they put into their digital presence).
I also believe that brands need to be able to sell directly to customers in order to sufficiently invest in digital marketing. And (in what I imagine will not make me retail friends any time soon), I do not believe that local partners should expect a share of online sales from customers who choose to buy directly from a brand. Especially if the brand is properly reinvesting in the business and as long as it creates a level playing field for both itself and its partners.
It’s not that I don’t get the importance of the local retailer. It’s not that I undervalue their partnership. And it’s not that I struggle to understand the frustration and betrayal they feel when a customer in their market chooses to buy direct. It’s because I have seen firsthand just how challenging it is to drive sales online, and have learned that every penny of the added margin that comes from those direct sales needs to be funneled back into promoting an early-stage brand if it has any chance to survive (none the less succeed).
Much as this isn’t palatable, it is the only thing I believe will work. And counterintuitive as it may seem, it benefits both the retailer and the brand as it allows for meaningful investment in marketing. The way we’ve been approaching the internet isn’t sustainable and it isn’t working. Not for retailers and not for emerging brands (which in the case of fine jewelry is pretty much all brands). It benefits larger corporations who can forgo short-term profitability for long term gain, as well as well-funded startups who don’t get held up with industry in-fighting. An Omni-channel approach where the brand and retailer can co-exist is the future of this industry, we just need to rebuild trust and ensure there is sufficient investment to do it right (which I know is much easier said than done).
In my next (and possibly final) post in the series, I’m going to share a little more about Selective, the omni-channel brand I spent a year and half trying to build, but was never able to launch. If you haven’t already, I hope you’ll subscribe and continue to follow along.
Hi there! I’m Michael Schechter, a third-generation, lifelong jeweler. I’ve spent most of my life and career at the crossroads of fine jewelry and emerging technology. Subscribe to receive weekly advice for jewelers struggling with new possibilities online and in store.
