Jeweller - May 2024

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ADDENDUM TO THE 2024 STATE OF THE INDUSTRY REPORT O ffT h eG r i d : Jewellers without a website Business ‘experts’ and retail analysts constantly emphasise the importance of digital marketing. Why are so many of Australia’s independent jewellery retailers operating without a website? KEY FINDINGS: AT A GLANCE 600+ Australian independent jewellery retailers do not have a website. A startling number of independent jewellery retailers still don't have a website, despite the popularity of online shopping. Age is a likely explanation as to why so many independent retailers are avoiding the internet. 250+ Independent jewellers have no digital presence whatsoever More than 40 years after the term ‘e-commerce’ was coined, you could be forgiven for believing that nearly every retail business in Australia would have a website. If you were to make that assumption about the jewellery industry, you would be very wrong. One of the most interesting findings during the six-month research phase of the 2024 State of the Industry Report (SOIR) was the startling number of jewellery retailers without a website. Of the 2,010 independent jewellery stores in Australia, around 600 (30 per cent) did not have a website. Research indicates that of those, around 280 have digital presence via Facebook (14 per cent of the market) while another 55 (3 per cent of the market) use Instagram as their primary digital presence. The study therefore shows that more than 250 retail jewellers (13 per cent of the market) have no digital presence whatsoever. Over the past three decades, consumers have increasingly turned to the Internet for shopping. The launch of eBay and Amazon in 1995, PayPal in 1998 and Apple Pay in 2014 were landmark moments. The popularity of social media has accelerated this evolution of consumer preferences, with the rise of Facebook (2004), Instagram (2010), and TikTok (2017), each compelling retailers to adapt to this new economic environment. As documented in Grey areas: Jewellers operating without a store – the two-year global COVID-19 pandemic appeared to be the straw that broke the camel's back. The viability of jewellery businesses that utilise websites and social media instead of traditional storefronts has become higher than ever. Many of these businesses thrived during the pandemic, discovering new low-cost business models out of necessity and maintaining them despite the pandemic's conclusion. Indeed, there seems to be a baffling contradiction in play. While many businesses are finding success relying entirely on the Internet, an arguably larger section of the industry appears to be content without any digital presence! Boots on the ground These two groups almost seem diametrically opposed — retailers without stores and retailers without websites — yet they have found success in the same circumstances. Colin Pocklington, managing director of Nationwide Jewellers, was surprised to discover that so many retailers continue to operate without a website. Nationwide is the largest buying group in Australia, with 299 members accounting for 337 stores. TABLE 1: THE ROUND FIGURES Category Number % Total independent jewellery stores 2,010 100% Businesses with no website 600 30% Businesses that use Facebook 280 14% Businesses that use Instagram 55 3% Sub-Total 335 17% Businesses with no digital presence 265 13% He says that while travelling the country and visiting stores, conversations with store owners often begin with the business' online presence. “Whenever our representatives visit stores in person, websites are one of our focuses. We always check their online presence before we go in and see them in person; it’s a great conversation starter,” he tells Jeweller. “I was surprised to hear how many retailers still don’t have a website. You really would think that nearly everyone would have one by now.” Not all those contacted for this report were surprised by the number of jewellers who operated without a website. Showcase Jewellers is the industry’s secondlargest buying group, representing 153 members and 183 stores. Managing director Anthony Enriques says these figures aligned with his expectations and explains that many jewellers lack confidence regarding digital marketing. “Those sorts of figures would probably resonate with what we see and hear among our membership," he explains. "I’ve noticed a lot of hesitation in the jewellery industry when it comes to embracing digital marketing." He continues: "In other retail sectors, we’d certainly expect to see a higher level of social media engagement.” Diving deeper In October, Jeweller undertook a retailer survey, which received responses from more than 200 independent retailers, estimated to be around 10 per cent of the market. These findings were particularly interesting as they relate to digital marketing. Retailers were asked the following prompt: My business is now more profitable than it was before the COVID-19 pandemic. Around 33 per cent of participants answered either ‘strongly agree’ or ‘agree’, a positive outcome given the two-year pandemic that preceded the survey. More than 37 per cent of participants answered ‘disagree’ or ‘strongly disagree’. Retailers were also survey on a second topic: My website and digital marketing activities generate a significant portion of sales for my bricks-andmortar store. The results to this question were almost perfectly 28 | May 2024
2024 STATE OF THE INDUSTRY REPORT JEWELLERS WITHOUT A WEBSITE CHART 1: DEMOGRAPHICS, RETIREMENT, AND PROFIT: WHY ARE JEWELLERS AVOIDING THE INTERNET? My website and digital marketing activities generate a significant portion of sales for my bricks-and-mortar store. I intend to retire or sell my business within the next five years. My business is now more profitable than it was before the COVID-19 pandemic. Strongly Agree Strongly Agree Strongly Agree 6.80% Agree Agree Agree 26.21% Neither agree nor disagree Neither agree nor disagree Neither agree nor disagree 29.13% Disagree Disagree Disagree 28.16% Strongly Disagree 0% 10% 20% 30% 40% Strongly Disagree 0% 10% 20% 30% 40% Strongly Disagree 9.71% 0% 10% 20% 30% 40% How can it be that despite the popularity of online shopping, more than 600 independent jewellery retailers in Australia do not have a basic website? The answer is multi-faceted, and many important factors are highlighted by the responses to Jeweller’s retailers survey. Among the contributing factors are the demographics of store owners, who may be considering the sale of their businesses or retirement. Interestingly, businesses that reported an increase in profitability have also asserted that their website and digital marketing activities generated a significant portion of sales for their bricks-and-mortar store. split down the middle, with 33 per cent of responses answering ‘strongly agree’ or ‘agree’, while 32 per cent answered ‘disagree’ or ‘strongly disagree’. These answers become particularly interesting when the responses are cross-examined. Among those who answered affirmatively to the first question – indicating that their business is more profitable now than before the pandemic – nearly half (44 per cent) answered affirmatively to the second question. That is to say, among retailers with businesses that are more profitable following the pandemic, digital marketing is viewed favourably in relation to sales. This point can also be made by taking the opposite approach. Among those who answered negatively to the first question — indicating that their business is less profitable now than before the pandemic — just 26 per cent had a favourable view of digital marketing. This might appear to be a conclusion that could be reached without the survey – profitable businesses are more likely to think positively about a common sales strategy such as digital marketing. However, in light of the number of businesses without a website, it’s an interesting insight all the same. Why wouldn’t you have a website? Logically, there are two reasons why a retail jewellery business would not have a website. Either the business owner feels that they do not need one, or they would like to have one but, for some reason or another, do not. The most common explanation is the latter. Whether it be because they are unfamiliar with digital tools or lack time, many jewellery store owners simply ‘haven’t gotten around to it yet’. While it may be unfair to stereotype, age may also be an issue in this regard. Older business owners are less likely to be familiar and comfortable with digital technology. There is also distrust in the businesses that offer website development. Pocklington says that, in his experience, there are four core reasons retailers don’t have websites, “it’s too hard, it’s too time-consuming, it’s too expensive, and I don’t know where to get started,” he says. “Most retailers without a website will raise at least one of these four points. "Acknowledging the need for digital marketing is rarely an issue; however, these are the common explanations.” Enriques says that when addressing the fourth point – confusion about where to begin – it’s important to break it down into three stages. “You would begin with a static website, something that shows who you are, what your business does, and where it’s located without requiring any maintenance,” he explains. "Older business owners are less likely to be familiar and comfortable with digital technology. " “The next stage is to start showcasing stock and highlighting the more interesting things the business has to offer.” He continues: “The final stage would be stepping up to a full e-commerce website, where customers can purchase online and have it delivered without the need to visit a store in person.” Establishing an e-commerce operation can be daunting and, with more elaborate websites, cost-intensive. Many business owners do not have the budget to hire a digital marketing manager. It’s a matter of horses for courses – smaller retailers, particularly those in country or rural locations, rarely require a large e-commerce operation. With that said, Enriques says that retailers should remain open to the same possibilities. “Even if you are an independent retailer in a nice sleepy beachside community, maybe you don’t need an entire e-commerce operation, but it’s important to have a digital presence,” he says. “At a minimum, you should have a website that lets the world know you exist. If, for example, you’re located in a holiday destination, someone might visit your store and see something they like but not purchase on the day.” He continues: “Time passes, and perhaps that visitor decides that they would like to purchase that jewellery after all. Without a website, that’s a sale you’ve missed out on. Something like that might only happen rarely, but it’s a sale all the same.” Retirement Enriques also says it’s essential to be mindful of the average of jewellery store owners in Australia. With that in mind, reflecting on another question asked in Jeweller’s survey of retailers is interesting. Participants were asked their age, and more than 58 per cent answered 55 or older. Participants were given the following prompt: I intend to retire or sell my business within the next five years. More than 38 per cent of responses indicated either ‘strongly agree’ or ‘agree’, while a further 16 per cent were undecided. This suggests that the jewellery industry is amid a period of great change, perhaps a ‘changing of the guard’. “While there are exceptions to the rule, older business owners are generally less tech-savvy than their younger counterparts and give less consideration to digital marketing,” Enriques adds. If you’re considering retirement or contemplating selling your business, there may be little incentive to invest the resources required – particularly if your business is already profitable without it. Choosing to abstain There exists a smaller group of jewellers without websites, which is arguably even more interesting – those who choose not to have one. While it’s a strategy that ‘swims against the tide’ in retail trends, there are many reasons why a retailer may choose to have little digital presence. May 2024 | 29
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Jeweller - May 2024

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