Jewelers Join The Internet

  • In Central America, a computer user “surfing” the Internet global computer network sees an ad from a Texas jeweler and sends his luxury watch to him for repair.

  • In Maryland, a young bride-to-be orders her wedding ring over the Internet from a jeweler in Hawaii.

  • In Maine, a small-town jeweler gets daily e-mail questions about jewelry and repairs from computer users around the world.

  • In Seattle, a woman orders a $1,000 necklace from a Minneapolis jeweler.

The future is now.

In less than a year, the Internet and its World Wide Web (the computerized structure where information is stored and read on the network) have become a major electronic meeting- and marketplace.

As use of personal computers has mushroomed, so has use of the Internet. In 1995 alone, the percentage of Americans who had used the network grew from 4% to 19%. By the end of this year, experts say, it will grow to 33%.

Not surprisingly, hundreds of businesses ­ including jewelers ­ are rushing to put up Web sites (see related story “Web Words”) on this fast-growing information freeway to catch the eye of consumers. The Internet has an estimated 400,000 commercial Home Pages (the first thing viewers see when they call up a Web site) and 350 cybermalls (several “stores” at the same Web site). They include such well-known retailers as JCPenney, Spiegel and Wal-Mart.

Many more are expected to join soon. Seminars on Internet retailing have attracted standing-room-only crowds at conventions around the country. Almost 30% of the nation’s retailers are investigating or plan to investigate use of the Internet, according to a new study by MasterCard and Chain Store Age magazine. And the nation’s top 20 ad agencies say they’re busy creating Web sites for hundreds of clients in all industries.

Web jewelers: While no major national or regional jewelry retailer had established a Web site at press time, hundreds of independent jewelers, wholesalers, designers and manufacturers have had them for months. Many industry organizations have Web sites, including Jewelers of America, the Independent Jewelers Organization, the Gemological Institute of America, the American Gem Society, the International Colored Gem Association, the Canadian Jewellers Association and the Canadian Gemological Association. De Beers will have one later this year through its ad agency, J. Walter Thompson.

The main advantage? Internet retailing is conducted on a level playing field: a small-town retailer has as much opportunity as a national chain. And everyone pays the same minimal charges for a chance to reach millions of consumers around the world. Carats & Karats, a small store in Honolulu, Hawaii, for example, gets five to 25 e-mail inquiries a day. The company sells its Hawaiian Heritage jewelry (up to $1,000 retail) to people throughout the U.S. and as far away as Sweden. “You already have a storefront on Main Street in your hometown,” says owner Brenda K. Reichel. “The Internet gives you one accessible to the whole world!”

Getting hit: Jewelry Web sites certainly attract Internet surfers. JA launched its site in November with a mechanism that allows users to quickly find any of its 10,103 member stores (excluding chains) by region, store name, town or ZIP code. Since then computer users have called up (or “hit”) the JA site almost 82,000 times; 41,000 of the hits came in February alone.

Many members have gotten referrals and sales because of the Web site, according to the flurry of e-mail messages JA receives daily, and the momentum is growing, says JA. A few jewelers with their own Web sites report phenomenal response: 2,000 hits per week for R.F. Moeller Jeweler in St. Paul, Minn., and 2,000-2,500 per week for Duncan & Boyd Jewelers in Amarillo, Tex. However, most report a more modest response: dozens to hundreds of hits per month. But even that pleases them.

“We’re getting an unbelievable response: 15 to 20 e-mail messages per day from people as far away as Germany and Ireland,” says Dan Dostie of J. Dostie Jewelers, Portland, Me. “I had no idea the response would be like this. It’s been a real eye-opener.”

Reality check: But don’t start counting your Web site profits yet. “Any jeweler who thinks he or she can go on the Internet and make a killing is kidding themselves. They just won’t do it,” says Ronald Boyd of Duncan & Boyd Fine Jewelers.

Regardless of industry, revenue from all Internet retailing is less than $1 billion annually. That’s about what consumers spend for jewelry alone on

TV shopping networks. Even the best cybermalls currently make less than $100,000 a year.

While some jewelers are making sales on the Internet, others say they are too few or too small; some say they may close down their sites. Jewelers mention several reasons why the Internet isn’t a satisfactory way to sell fine jewelry ­ at least yet.

One reason is that Internet users may not be the best jewelry consumers. Seventy-five percent of Internet users are men, according to a new MasterCard/National Retail Federation study, so many women don’t know what jewelry is available on the Internet to buy for themselves or suggest as gifts.

Another reason is that fine jewelry may not lend itself to Internet sales. “People accustomed to buying from a catalog find the Web a great way to buy things, but my sense is that people who buy from fine jewelers aren’t catalog customers. They want to feel the product.” says Dr. Jill Ellsworth, author Marketing on the Internet and other books about the Internet.

Boyd agrees: “People who buy fine jewelry want to touch it, to deal with their jewelers personally and to establish a relationship. You can’t do that on a computer.”

And most people aren’t willing to spend thousands or tens of thousands of dollars for a piece of jewelry based only on a photograph and description on the computer screen. “I don’t care how good the photos and data are, people as a rule don’t buy a $5,000 piece of jewelry over a computer,” says Mark Moeller of R.F. Moeller Jeweler, one of the most successful jewelers on the Internet.

One more reason: “Most people simply aren’t used to buying things on the Internet. They have to become accustomed to it,” says Ellsworth.

Marketing tool: Should you have a Web site? Jewelers and other retailers say the Internet is a useful marketing and promotional tool. In fact, the MasterCard/NRF study found most computer users consider the Internet primarily as a source of information or a way to contact people rather than a place to shop.

Many jewelers agree. Mark Moeller considers his Web site as part of his overall advertising program. “It reaches people with high incomes and high levels of education,” he says. “But we use it primarily to give information. We don’t try to sell right off the Internet. That’s why we provide e-mail, an 800 number and other means [for customers] to contact us.”

Neil Browne does a big engagement ring business at Browne’s Fine Jewelry in Champaign, Ill., a university town with 25,000 students who use computers every day. “[A Web site] is a good way to communicate with them,” says Browne. “It definitely expands our relationship with them and their feel for our store.” Indeed, he finds it so successful that he reduced the size of his newspaper ads and put more information on his Web site.

Even though most jewelers with Web sites say sales are slow, many still welcome a chance to get their merchandise in front of people who might not otherwise walk into their stores. Some have found other uses for their Web sites. Lucy Grace of Dunlavy Jewelers of Huntsville, Ala., uses hers as a purchasing source. Robert Ringold, a third-generation jeweler in Philadelphia, Pa., uses his to keep in touch with his diamond cutters and manufacturers in Asia. Mark Moeller finds estate jewelry sellers. And Dan Dostie answers repair questions.

Weaving a Web site: It’s not hard or expensive to start and maintain a Web site. Here are some tips:

  • Explore the territory. Sign up with a service provider ­ such as GNN, Netcom, America Online, CompuServe and Prodigy, among others ­ to gain access to the Internet. (You can get information about these providers from computer stores.) Then go “surfing”: explore the Internet and its Web sites to learn what information is available and how to get to it. If you’re going to use it as a business tool, suggests author Jill Ellsworth, learn to use e-mail (electronic messages from one computer user to another) because it save times and gives instant access to suppliers, colleagues and customers.

  • Who are you? Decide what you want to do with a Web site. What image do you want to convey? What type of audience do you seek? What do you want to promote?

  • Look at the competition. “Shop” other jewelers’ Web sites and decide what you like and don’t like about their formats, illustrations and information. How long does it take to “download” their information (the time from when you tell the computer you want to see a Web site page until it actually appears on your computer screen).

  • Who will do it? You can build a Web site yourself. The process gets easier all the time, and even if you don’t know an html from a URL, there are easy-to-use instructions at computer stores, in libraries and book stores and on the Web itself (see “Guides to Building Web Sites,” page 213). Cheryl Kremkow, director of the International Colored Gemstone Association’s Gembureau, needed just one month to conceptualize and one month to build ICA’s Web site. That’s a typical time frame when you’re building a Web site along with your regular business duties.

Or you can hire someone else to build the site for you. Look for “Web site designer” or “computer system designer” in newspaper ads or telephone books; contact a local computer users group, computer store, advertising agency or business colleague who already has a Web site; visit a computer show; or look for the name and e-mail address of designers of pages you like (usually found at the bottom of each Web site’s Home Page). Or go to the Web site of InterNIC (http://www.internic.net), which registers Web site names and has a list of service providers at its site.

  • Comparison shop. Check several designers before choosing one. Compare prices, ask for samples of sites they created, ask for technical information (such as their physical connection to the Internet, how many days they’re out of service each month, etc.), check with references and ask how they would help you to market your site.

  • Costs. If you create the site yourself, the only real cost is a $100 licensing fee that InterNIC (the Internet’s North American caretaker) charges to register your uniform resource locator (URL) ­ which is your site name ­ plus an annual $50 renewal fee. If someone else designs the site for you, it’s hard to give an average cost because the business is so young. But as a rule of thumb, start-up and maintenance costs can range from a couple hundred to several thousand dollars (most independent jewelers polled by JCK paid a few hundred).
    Monthly maintenance costs (for the service provider to give access to the Internet, maintain the integrity of the site, make changes and track usage) range from $50 to a few thousand dollars per month.

  • Be involved with your designer. Make sure the designer knows exactly what you want and stay involved in the design process. For example, Brenda Reichel of Carats & Karats studied Web sites for “graphics, style and verbiage and then told the Web site designers which I liked and what I wanted. I worked with the guy who wrote the screen to make sure the colors [in gem photos] came out right.”

  • Review legalities. Have your attorney review the site’s content with the designer, looking at such issues as copyright infringement and public domain status of graphics. One issue a jeweler may have to address is infringement of distribution rights. At least one major watch brand ­ TAG Heuer ­ has drafted a policy prohibiting its retailers from selling its watches anywhere except within their exclusive authorized areas. “TAG Heuer’s policy is to prohibit all retailer sales and marketing programs on the Internet as it disrupts the quality of our distribution structure and threatens the prestige of the brand,” says the company.

  • Keep it simple, but entertaining. Put yourself in the viewer’s place. Is your site fun or at least interesting to view? “A Web site isn’t an ad,” says Kremkow. “It has to be attractive enough to hold viewers and bring them back to it again.” Don’t use a lot of type because no one will stop to read it. And don’t stuff it with too many product pictures because it’ll look cluttered on a small computer screen and take a long time to download. “I can’t tell you how often I’ve gotten bored downloading my own stuff because it was so complex,” says one jeweler.

  • Be different. Good retailers do something special that sets them apart from the herd. It’s no different on the Internet. Duncan & Boyd, for example, includes a “Mystery” page that readers must solve for a prize and whose clues connect them with different product sections of the site. Carats & Karats offers its Web site in English and Japanese. Browne provides directions and a map to help customers find his store. Bolender’s Fine Jewelers of Rockford, Ill., uses pictures of round diamonds as the buttons that viewers click to go to different pages.

  • Choose a service provider. This “electronic caretaker” can provide weekly or monthly reports on how many users accessed your site. Often the same company does Web design and service. An Internet search using the words “service providers” can point you to such companies.

  • Change the content of your Web site frequently. “A successful site should be changed every month, and some companies do it every day,” says Ellsworth. “You need fresh material to keep people coming back.” You don’t have to redo the entire site, but change some product selections on a regular basis. Highlight “picks of the week,” “special merchandise” or holiday designs.

  • Advertise. Promote yourself as actively in the cyberworld as you do in the real one. You or your service provider should put your site on all relevant search engines (a mechanism that allows users to search quickly for certain topics) and lists of hyperlinks (signposts pointing to other relevant information elsewhere on the Internet). Include your e-mail address and URL in your advertising and promotions and on stationery and business cards.

No matter how small the jewelry business may seem today, jewelers can’t afford to ignore the Internet because its potential tomorrow is enormous.

As far as the Internet and its retail use is concerned, “this industry is at the same point the telephone was in 1895 ­ just beginning,” says Ringold.

The Internet and World Wide Web are “quickly becoming a marketing vehicle for all organizations that have goods and services to offer,” says Michael D. Roman, the recently retired chairman of Jewelers of America. “The full significance of this new technology is just beginning to come out.”

INTERNET SECURITY

Security concerns consumers and retailers on the Web, just as it does at home and in the store. Here are some tips.

Don’t put a picture of yourself on the Web. “I don’t want to take any chances,” says one jeweler.” I don’t mind if anyone in my town knows what I look like, but I don’t know who else around the world is looking at my picture on the Internet.”

Treat credit card sales the same as you would if they were made by telephone or in the store. “Verify the card through the credit card company,” says Ron Boyd, co-owner of Duncan & Boyd in Amarillo, Tex. A customer who ordered 100 TAG Heuer watches was more interested in when he would get the watches than in color or price. “We knew that wasn’t a legitimate order,” says Boyd dryly.

Brenda Reichel of Carats & Karats in Honolulu, Hawaii, won’t even take credit card orders over her Web site. “I telephone to clarify the information and to provide a personal touch,” she says. She also asks for confirmation of the credit card number and verification of the price and size of the jewelry in writing (by fax).

Some customers are concerned about giving their credit card number on the Web, fearing someone other than the intended retailer could get access to it. But Visa, MasterCard and software giant Microsoft are developing a system called “Digital ID” designed for safe transaction of credit card numbers from customer to retailer to bank. The credit card companies also are working on an electronic signature system.

The legitimacy of some Internet merchants is another concern. However, this actually can benefit retailers. “This concern may cause consumers to limit their purchases to retailers with local stores or regional/national name recognition,” according to a new study by MasterCard and the National Retail Federation.

A number of jewelers also provide information in their Web sites to reassure users. Bolender’s of Rockford, Ill., for example, includes a brief history of the 100-year-old business and information about staff accreditation and store affiliations. Some jewelers also include a toll-free telephone number. “That way people can check you out,” says Mark Moeller of R.F. Moeller Fine Jeweler, St. Paul, Minn.

WEB WORDS

Here are a few terms you’ll encounter with Web sites on the Internet.

Browser (or web browser). This is the software that connects your computer with the Web servers on the Internet and lets you browse through the files on those servers.

GIF & JPEG. These are two types of image file formats in which photos, illustrations and graphics are stored. The files are compressed so images can be transferred quickly from Web server to your computer.

Home Page. This is the first page, table of contents, introduction or “door” to a Web site. One source calls it the welcome mat for a Web site.

Hotlist (or bookmarks or hotlink). This feature of browser software saves the URLs for Web pages you want to revisit.

html. Hypertext Markup Language is the simple language in which all Web pages are written and which Web browsers “read.” It consists of English enclosed or surrounded by a series of tags in angle brackets. The end tag also has a back slash. Some 50 tags tell the browser how to read and show text on the screen.

Internet. This is the name for what the abbreviation implies: an international network of computer servers linked together by telephone lines that carry information. Once an individual (home or office) computer is linked to the Internet, it has access to files on these servers anywhere in the world.

Link or hypertext links. These are highlighted words or phrases in the Web document that act as signposts, pointing to relevant pages elsewhere on the Internet. Clicking on a highlighted link connects you to one of those pages.

URL. The uniform resource locator is the “address” of a Web site on the Internet. It’s pronounced U-R-L, not Earl, and is usually preceded by http:// and followed by .com (for commercial user) or .org (for organization). A typical URL looks like this: http://www.CompanyName.com. The www indicates the URL is a Web server.

Web page. Files that contain the information and graphics that appear on the computer screen.

Web servers (or just servers). Computers that store and share (or “serve up”) their information with other computers on the Internet. Servers are often located at and maintained by companies, universities and other organizations.

Web site. Specially marked documents pertaining to an individual, business or organization that are stored on a computer server. The documents are accessible to anyone with a computer and modem.

World Wide Web. The collection of documents (Web sites) on the Internet.

GUIDES TO BUILDING YOUR OWN WEB SITE

Need information on how to design a Web site for your business? One of the best sources of advice is the Internet itself. Here are several Web sites about Web sites:

A number of books available at computer and book stores and in libraries provide similar information. They include:

  • Creating Cool Web Pages by Dave Tayor.

  • The html Sourcebook by Ian S. Graham.

  • Teach Yourself Web Publishing with html in a Week by Laura Lemay.

  • The Internet Business Book, Marketing on the Internet and The Internet Business Kit by Dr. Jill H. Ellsworth.

Another source, available on most newsstands, is Advertising Age magazine. Ad Age plans to publish a “Web Builders Showcase” in its late June and August issues and early November and December issues. Included will be names, addresses and examples of work by some leading Web builders.

WHO USES THE INTERNET?

75% of users are men.

55% have a college degree.

Nearly 40% have household incomes of $50,000+.

The median age is 34.

60% of users cruise the World Wide Web; 85% expect to buysomething there this year; 27% already have.

Most on-line buyers in the prior month bought something in the $20-$30 or $100-$200 range. Nearly 20% spent $500+.

60% are married; one in three has children.

Source: MasterCard/National Retail Federation study: “Shopping on theInternet”

“You already have a storefront on Main Street in your hometown,” says Brenda K. Reichel of Carats & Karats in Honolulu, Hawaii. “The Internet gives you one accessible to the whole world!”

RETAILERS & TECHNOLOGY: WHO WILL USE WHAT?

Source: Ernst & Young/Chain Store Age magazine 1995 Survey of Retail Credit Trends
% who plan to use within next year % who don’t plan to use within next year
CD-ROM 8.1% 91.9%
Internet 29.0% 71.0%
Interactive TV 4.1% 95.9%
TV home shopping 6.9% 93.1%
Interactive phone 12.1% 87.8%
Personal computer 14.9% 85.1%