We’re From the Internet, and We’re Here to Help

Jeff Milstein, co-owner of Wyatt Austin Jewelers, Schaumburg, Ill., has new sales help. It doesn’t eat, sleep, or take breaks. It attracts people to the store, sells merchandise that otherwise might not have sold, piques customers’ curiosity, and allows customers to order jewelry and receive information about store specials 24 hours a day, seven days a week.

The new sales help is an in-store kiosk stocked with jewelry and equipped with interactive technology and Internet access. Customers can access the kiosk and its products from home via the Internet and communicate with the store using e-mail.

The kiosk—called “the E’motions Gallery”—is one of several ways that manufacturers and entrepreneurs are using the Internet to help retailers sell more jewelry. It offers customers “live” jewelry, gives them the opportunity to order additional jewelry online, and includes interactive features such as “virtual try-on.”

For retailers, it’s another way to attract customers into the store and an additional tool for the sales staff. It also allows for “permission-based marketing” by letting customers and potential customers enter their e-mail address into the system.

Wyatt Austin Jewelers was one of the few jewelry stores to participate in beta testing of the product, which has been in the store since May 2001. “It’s been a real nice addition to the store,” Milstein says. “It has a great appearance, and it definitely attracts attention. We’ve sold some merchandise out of the showcase. It is a nicely made product in a nicely displayed cabinet and [provides] Web access 24/7 without setting up the infrastructure, which most independents can’t afford.”

The kiosk is the creation of iBBC of Carlsbad, Calif., which manufactures and distributes a line of branded fine jewelry called the “E’motions Collection.” The company stocks the kiosk with about 10% of the collection, and customers can access the rest of the line via the Internet, using touch-screen technology and a keyboard. Customers can try on live pieces (with the help of a salesperson) or use the kiosk to virtually “try on” the online pieces. For the latter, the kiosk takes a photograph of the customer and stores it electronically. Once the photograph is stored, 3D images of products on the Internet can be manipulated and sized to fit the customer’s image.

After virtually trying on a product, the customer can send an “e-card”—which includes the image—to a loved one, and the pre-approved gift can be purchased. Customers also can order products from home via the retailer’s Web site. iBBC handles all shipments and can ship to home or store.

“It is a complete integrated system of selling, marketing, branding, promotion, and e-commerce,” says Jim Littman, CEO of iBBC. “We’re not just selling a piece of jewelry. It is an e-commerce suite and a marketing program. The whole structure combined gives [jewelers] a series of resources under their fingertips and all under their name.

“My motto is, never give customers what they want—give them what they never dreamed they could have,” Littman adds. He notes that the plan is to place 75 kiosks in stores for a larger beta test.

The retailer receives the same commission whether a sale is made online or at the store. Salespersons also get their commissions, Milstein says. In addition to the live salesperson who helps customers work the kiosk, there’s a virtual salesperson on the screen—”Julie”—who helps customers navigate the system.

For a store to be enabled with the technology, it needs high-speed Internet access, a fairly flexible single-line outlet, and space, Milstein says. “But not that much space,” he notes.

Littman adds, “It’s a plug-and-play e-commerce system, but it doesn’t stand alone. It takes a branded product and integrates it together with both the physical and virtual to make it all successful.”

The kiosk’s most practical value may be as an electronic marketing tool, Milstein says. “My sales staff usually will go through the process with customers,” he says. “We’ve registered close to 300 people and gotten their names for permission-based e-mail marketing, which I think is the long-term benefit.” Both the store and the manufacturer already have sent out marketing information a couple of times to the names on the list, he says.

The cost of the kiosk is $1,000 for installation, plus $200 a month, although the monthly fee is waived if the jeweler buys the jewelry outright. According to Milstein, that’s a bargain. “Anytime somebody walks into your store and approaches you and says they will give you $20,000 worth of merchandise at cost, provide you with a way to hook up the Internet for a small fee, have 24/7 access to orders, and increase the size of your inventory by $300,000 for $1,000 installation and $200 a month … you’d have to be crazy not to take it,” he says.

Meet the Italians. In these rough economic times, the future of e-commerce may lie in developing partnerships for buying and selling merchandise efficiently and in maintaining relationships with manufacturers and consumers on the Internet.

Jewels of Italy (www.jewelsofitaly.com), Santa Monica, Calif., uses the Internet to connect Italian jewelry manufacturers with U.S. buyers, explains CEO John LoGioco. The company also maintains offices in Milan, Italy.

“Almost all retailers and buyers are interested in Italian jewelry,” LoGioco says. “But there are challenges in purchasing from and learning about Italian manufacturers. [Here, buyers] can access the complete collections of these companies, and we list their landed retail prices, which are the same prices [as] at trade shows. We support the jewelry and prices with complete profiles.”

The company’s database includes about 18 Italian manufacturers (representing high- and low-end jewelry and ranging from gold to sterling silver and other materials) and 300 retailers, mostly based in the United States. Although it opened a year ago, the site didn’t gather enough manufacturers and buyers until June 2001. Even then, LoGioco was surprised at the way it caught on. “We thought the first few transactions would be for lower-priced goods,” he says. “But it’s the opposite. Now, the average transaction is $25,000.”

The site allows retailers, after completing the free registration form, to browse the collections of jewelry online from Italian manufacturers. Retailers can select the jewelry they want to buy immediately, or set it aside on the site for further consideration. Orders are made online, but the financial transactions are completed between retailer and manufacturer through traditional channels.

“There are no financial transactions [on] the site yet,” LoGioco says. “There is going to be a significant road to go before the buying base and the manufacturers will want to purchase online. There’s a significant learning curve on both sides.”

The Web site allows U.S. retailers and Italian manufacturers to communicate year-round. Historically, meetings between these parties were rare and usually took place at trade shows. That lack of familiarity leaves LoGioco in an unexpectedly good position. “The biggest benefit of all—which we didn’t know when we started—was that Jewels of Italy is a conduit for sellers and buyers,” he says. “[Retailers] talk to us at trade shows and understand that we know the brand. They feel comfortable calling us with questions and getting more information. On the Italian side, they are more willing to do orders with people they don’t know because they know us.

“We had a buyer in North Carolina call us and say, ‘I have a client looking for this type of piece; can you find it?’ People are calling us for help if they can’t find it on the site.”

Building Web sites. Ashford.com, the online luxury goods company, is in the process of being acquired by a company named Global Sports, King of Prussia, Pa. Global Sports provides outsourcing services for e-commerce platforms and fulfillment services for sporting goods retailers and professional sports organizations. It includes Web design, management, customer service and support, warehousing, shipment services, and marketing.

David Gow, CEO of Ashford.com, says the deal won’t affect the Houston-based company.

Global Sports wants to combine the Ashford.com Web and e-commerce platform with its own systems platform to expand into the jewelry and luxury goods markets, says Michael Conn, Global Sports senior vice president in charge of business development. It would do so by designing e-commerce solutions for retailers. “Our goal is to acquire Ashford.com and combine components of their infrastructure with components of our infrastructure to target retail companies,” Conn says.

“If you just step back from all that happened in e-commerce, Global Sports may have developed the best business model for e-commerce,” Gow says. “We’ll take over all the operations at no cost except known fees and commission on sales. It works well for traditional retailers and it’s also a profitable e-commerce business.”

Conn says the company hopes to start offering its services to retail jewelers and luxury goods providers early this year.