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Richard Prout
Richard Prout
 










Internet is here to stay

The online playing field is open to everyone, and bricks-and-mortar retailers should embrace the technology and the rivalry rather than campaigning to get their internet-only counterparts ejected from the JAA, argues Richard Prout.

A proposal from members of the Jewellers Association of Australia (JAA) to ban JAA membership for internet-only vendors prompted me to put my thoughts forward so hopefully a reasoned decision will be made.

It’s my opinion that there are some fabulous craftsmen, producing some absolutely stunning jewellery in Australia, and furthermore, there are some very talented people running jewellery businesses, whose customer service is the very essence of excellent retailing. Let’s be clear: very few, if any, of these companies are going to be much challenged by discount internet players (or discount shops for that matter).

I would, however, concede that an internet player is more easily able to challenge a jewellery shop that has historically enjoyed a monopoly because its location couldn’t easily have sustained two local businesses.  Of course, it’s also true to say that the same local business can now use the internet to make sales further afield.

It’s of course also the case that anyone currently enjoying unfeasibly large margins, or selling rather average product, or not really providing a good local service, is going to be challenged too. The internet is a great leveller.  Great companies can easily be found and will often be promoted within social networks such as Facebook.

Many buyers now do their research online even if they eventually buy on the high street. The trick for physical stores, therefore, is to learn how internet players work and exploit their internet marketing techniques to promote their own store and product.  There is no reason why a customer should buy from an internet-only player any more so than the internet site of a traditional business. The physical business can use the internet to entice people to its physical store.

I remember when all the book shops were in a flap because supposedly Amazon was going to obliterate them.  Some did of course go bust, but most simply responded in ways the internet player could never compete with: by providing a wonderful place for the potential customer to sit down and enjoy reading a book. The ambience, decor and service in many leading book stores has seriously improved because of Amazon.   

As an internet vendor myself, I can tell you that we see about 70 per cent of potential customers ending up buying on the high street. At present we seek to educate them so they make an informed purchase and point them towards JAA members. Perhaps the JAA’s bricks-and-mortar members don’t realise this. If we are forced to leave the JAA, we will simply send these people to another membership organisation that will no doubt get formed.  We only send to JAA members because we are a member and we trust the jewellers within that network.

As an internet vendor, we of course try to offer good value online prices, but more importantly we actually aim to major on design, craftsmanship, and excellence in customer service.  Yes, we are an internet-only player, but not a discount internet site.

John Temelli made an excellent point in this column a couple of months ago when he said the Australian jewellery industry shouldn’t want to create a sales landscape of specs, pricing, and discounts; rather that we should want to deliver prestige and luxury. I wholeheartedly agree with this. But it’s not an excuse to be unclear about the specification of what is being sold, or to overcharge. I know John didn’t mean that, but it’s a tactic some have relied on for too long.  We are sometimes frustrated by losing a customer who sadly thought they got a better deal on the high street but actually didn’t.

As for competing in the landscape of internet marketing – there are some excellent books and businesses that can help you. Type the words “internet marketing” into Amazon and Google and see which books and companies come up. You can also partner with players established and proven in the internet space that have similar brand values to you.

Mergers and acquisitions is an obvious route for the bigger jewellery players, especially if they don’t want to cause brand confusion or to frustrate their existing sales channel. For the smaller jeweller, perhaps visit your local internet business and discuss a joint venture!

I guess I could summarise by saying: embrace this technology rather than alienating yourself from it and continue to be excellent at what you do.

Richard Prout is CEO of e-tailer 1791 Diamonds

More reading:
JAA retailers campaign against internet-only peers










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Saturday, 07 December, 2019 11:01pm
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