This week, we released our third-annual Digital IQ Index: Watches & Jewelry report. Having tracked 28 of the 80 brands included in this newest study since 2010, we are finally able to identify some clear, data-driven digital strategy trends across the industry. For the majority of Watch & Jewelry brands, selling merchandise in the five and six-figure range (and upwards), is par for the course. Also par for the course is that shoppers don’t tend to buy these kinds of items online. Understandably, for these kinds of purchases, buyers want the high-touch experience of going in-store. For years, Watch & Jewelry brands were fine with this–even preferred it. Longer than any retail vertical we assess, brands in this sector have either abstained from e-commerce altogether or only offered a minimal selection of lower-cost merchandise online.
Earlier this spring, Signet Jewelers, the largest specialty retail jeweler in the U.S. and the U.K., reported a 10.4 percent YOY increase in sales. Fueling that growth? E-commerce, which was up a staggering 40.7 percent. Though representing just 3.1 percent of overall sales, e-commerce’s 23.6 percent annual growth is a clear sign that consumers are becoming increasingly comfortable buying big ticket Watch and Jewelry items online. This attitude shift is in large part driven by the brands themselves making the process more streamlined, more user-friendly, and more luxurious with features like live chat and in-store pickup. Not overwhelmingly, as you can see in the graph below, but for a sector as old-school as Watches & Jewelry, progress is progress.
Slower overall adaption to digital should not take away from the fact that 2013 is a turning point for Watch & Jewelry e-commerce. Since 2010, e-commerce penetration has doubled across the 28 brands included in our inaugural study. Today, 54 percent of these original brands now sell online. In the year since our 2012 study was published, five more brands have added e-commerce functionality, including this year’s biggest YOY Digital IQ gainer Chopard, Baume & Mercier, Citizen, Jaeger- LeCoultre, and TAG Heuer. Though their online inventory isn’t as exhaustive as you’d find among Fashion and Beauty brands, an analysis of the price points of Watches & Jewelry available via e-commerce suggests brands, too, are becoming more comfortable with digital transactions. In the graph below, you can see that more than one-third (38 percent) of e-commerce enabled brands currently sell items online for $20,000 or more. As both Watch & Jewelry shoppers and Watch & Jewelry brands grow more accustomed to doing business online, we predict these e-commerce trends will only become more advanced and more widespread. Which means the final e-commerce holdouts will have a very important decision to make.
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