Losing Sleep Finding a Web Strategy

Not all of the discussions at the Plumb Club Forum focused strictly on information and communications technology. Some seminars and roundtables discussed diamonds, gemstones, and precious metals; corporate and social responsibility; and fashion. Others focused on issues confronting the industry, and one dealt with the consequences of what is commonly called “Web 2.0.”

In a panel discussion titled “Things That Keep You Up at Night,” moderated by JCK publisher Mark Smelzer, panelists representing several segments of the gem and jewelry industry discussed topics ranging from corporate and social responsibility and price pressures to how to attract more young people to the industry.

Beryl Raff, J.C. Penney’s vice president and general merchandise manager for fine jewelry, discussed the importance of creating and sending messages that show how a brand operates in an ethical manner. She said ethical issues revolving around the jewelry trade—including dirty gold, the movie Blood Diamond, and the complexities of revealing gem treatments—are placing consumers in a bind. And the pressure to keep prices low while doing the right thing is boxing the industry into a corner. “It is no longer good enough to have great product, promotion, and pricing,” Raff said. “No one wants to force customers into mental turmoil.”

She added, “The Golden Rule is with us all. Brands are not exempt from the Golden Rule.”

Cecilia Gardner, president, chief executive officer, and general counsel of Jewelers Vigilance Committee, named a number of industry issues that are disrupting her sleep. But what’s really keeping her up at night is what she calls the industry’s lack of concern about adhering to anti-money-laundering laws and regulations. “The industry does not have a culture of compliance,” Gardner said. “It’s been two years since every dealer of precious metals and stones had to have an anti-money-laundering program in place. When I ask them about Patriot Act compliance, they look at me as if they have no idea of what I’m talking about. Who’s listening? Who’s putting this on your agenda? It’s a little disconcerting. It keeps me up at night.”

She said because of this, her office receives more than 400 consumer complaints per year. “The industry as a whole has not taken this [compliance] to heart and put it on its agenda,” she said. “They need to integrate it into their jobs.”

Peggy Jo Donahue, director of public affairs for Jewelers of America, offered a fantasy scenario in which a jewelry store of the future named Starling Jewelers dealt only in fair-trade jewelry and promoted the positive impact it’s having in developing nations.

Donahue’s imaginary jewelry store transcended ethical considerations. She also noted that in this store “the jewelry is amazing.” She described how the jeweler employs the latest imaging technology to create a beautiful store environment that attracts an extensive clientele. She spoke about the store’s advanced CAD/CAM systems, which allow customers to work with bench jewelers to custom design their jewelry on-site.

She also discussed how this store would promote jewelry for nontraditional buyers, such as “power jewelry” for working women, prom jewelry, and “princess” and “queen” brands to introduce “girls and young woman to the jewelry experience.”

Doug Hucker, executive director and chief executive officer of the American Gem Trade Association, said the industry isn’t doing enough to attract young people. “Our people are probably the most important resources,” he said. “We are not investing enough in people in the business.”

He said that during his early days there were programs in place that helped young people grow within the industry. Today he doesn’t see the same mentoring programs. “We must find ways to attract people with a passion for our business,” he said. “We need to make models of transitions. … Nothing is being done telling people how exciting this business is.”

He added, “We’re losing ground to sexier industries. … I’m hard-pressed to find any industry sexier than ours. Kids don’t see it that way.”

Two points were made clear during the Web 2.0 panel discussion. First, companies need to create a Web strategy that’s in line with their business model. Second, no matter the strategy, it must engage the customer.

Pinny Gniwisch, cofounder and chief marketing officer of Internet jewelry retailer Ice.com, said he recently had some success producing and placing videos on his site, on a dedicated page called IceTV. Gniwisch showed two of several videos he’s done: one in New York’s Times Square where he interviewed people at random, and another for Mother’s Day that involved going to a Hollywood awards show and interviewing rap stars. He also has videos of contests that offer jewelry as rewards.

“I didn’t know what to expect,” he said of the public reaction to the videos. But he learned quickly that each time he shows one, hits to his Web site increase, and he receives a great deal of e-mails.

He said he learned that consumers react well to videos that aren’t overproduced. “Consumers want to interact and feel like it’s homegrown,” he said.

Through the videos and other functions on the Web site, he plans to engage women so they feel comfortable buying jewelry for themselves. “What we’re trying to do is change the culture of jewelry buying,” he said. “How to get that message out? How do you spread that virus? If you’re in the mood to have jewelry, you can buy it for yourself. You don’t have to wait for the lazy guy to get off the couch [to buy it for you].”

Steve Larkin, senior vice president of e-commerce at Zale Direct/Zale Corp., said his company had some hesitation when considering whether to add a function on the Zales and Gordon’s Jewelers Web sites that allow customers to comment and rate products—whether they bought it online or at the store. “We had some reservations, and we conceded that we are opening up the complaint department,” he said.

And they did receive complaints. But they also received their fair share of compliments and high ratings, which the company uses for marketing purposes. “It added third-party brand endorsement and provided us with an angle to promote those products that are top rated,” Larkin said. “Poor ratings helped to uncover product or service problems.”

The company discontinued some items that were poorly rated and added a category on its Web sites dedicated to its best-rated products.

Catherine Levene, chief operating officer of DailyCandy, a daily newsletter and Web site that describes itself “as an insider’s guide to what’s hot, new, and undiscovered,” said Web 2.0 is about actively connecting with an audience. “I think it really means the Web as an open platform, as the culture of generosity. It’s about engaging with them and with each other about whatever your business is about.”

DailyCandy, which has 21 editions in 12 cities, targets affluent, urban women in their 20s and 30s. “We tend to be the place that writes about it prior to it appearing in magazines,” Levene said.