National Jeweler Network

Retail Profiles

About Retail: E-tailing vs. brick-and-mortar

By Hannah Connorton

November 21, 2013

New York--In an increasingly digital world, many businesses--including those in the jewelry industry--have chosen to operate solely online, among them Blue Nile and, until recently, Boston-based custom jeweler Gemvara.

If done correctly, the model is efficient. Amazon, for example, reported in October that its third quarter sales were up more than 20 percent, and Blue Nile recently recorded its sixth consecutive quarter of double-digit sales growth.

However, today’s consumers have evolved; they’ve researched and are educated about the products they are shopping for, and expect thoughtful and knowledgeable customer service in return. Although many studies have highlighted the benefits of online shopping, when it comes to jewelry in particular, consumers crave a more personal, tailored experience. Can the online model provide that, or will the future bring more e-tailers opting to open a physical shop?

Gemvara recently opened the doors at its first brick-and-mortar location, a pop-up showroom in Boston’s Back Bay neighborhood, a move the brand’s CEO says will help to identify the best way to do business with their customers.

“We want to learn more about our customers and what they want from us, and to get a clear understanding of whether a permanent retailer presence (brick-and-mortar store) makes sense for us,” Janet Holian, Gemvara CEO, told National Jeweler Wednesday.

Jeff Taraschi, president of brand and communications firm Interactive Group Ltd. in Providence, R.I., said Gemvara’s move to open a brick-and-mortar location is a good way to reach consumers who are unfamiliar with the brand.

“I think when you look at the philosophy of someone who is buying online, typically people take brands and products they know very well and they become very comfortable with them to buy online,” he said. “But if you’re a merchant who is trading to a female self-purchasing consumer and you’re selling fashion rings, even with CAD images and rendering and multiple perspectives, it’s still very different for a consumer to understand what it look like on their hands, finger, wrist.”

He said to think of a woman in a traditional jewelry store: the first thing she’s going to do is put the piece on. She will either like it and smile, or the item will come off immediately because it doesn’t look or feel right.

“Jewelry, especially fashion jewelry, is very personal, so I think that a lot of Gemvara’s styles are very unique and their choices of stones and the designs they use are very specialized. They’ve carved a niche for themselves,” Taraschi said. “If you’re shopping Blue Nile and you’re looking for a classic engagement ring, you can project what it’s going to look like because it’s more available and familiar. But if you have a ring with an oval amethyst combined with two green tourmalines, what’s that going to look like? How will it cover the finger?”

In addition, he said, women unfamiliar with the Gemvara brand don’t know their scales and sizing, and may not be comfortable buying something they haven’t tried.

“I believe as the digital platform continues to explode people are going to reach a level where unless they have that physical relationship with consumers, their business may level off a bit and I think this is a smart move for Gemvara,” Taraschi said. “We live in a time where the traditional rules don’t apply to the retail business anymore and that innovative thinking that Gemvara is applying is something we all need to pay a lot more attention to.”

Taraschi said he thinks more online retailers will open brick-and-mortar locations, to create the in-store experience for customers who may only know them digitally.

“Digital retailers … really do lose the personal connection with customers who require that to initiate business, and once they’re comfortable with a brand, they’re perfectly willing and in many cases shop with their favorite retailer online.”

Gemvara’s new brick-and-mortar location, called “The Gemvara Experience,” will serve as a showroom for the brand’s hundreds of designs, through both tangible samples and customizable images on iPads.

“Because we make everything to order, we don’t have inventory and there’s no way to carry every design we offer. So, we have around 66 samples (in the store) and we talk to customers with an iPad in hand and use larger monitors to show them images of the ring they would like,” Holian said. “It’s a different experience than their typical jeweler.”

Although Holian said the brand’s intent “isn’t to sell in the store,” if a customer does decide to purchase a Gemvara ring in-store, the staff helps them order it online. Shipping is free and the item is guaranteed to arrive to the customer within 10 days, with a faster delivery time for the holidays.

To ensure they don’t leave empty-handed, each purchasing customer receives a free pair of “Martini” stud earrings, which are available in 10 different gemstones.

Holian said the brick-and-mortar store will serve to both turn brick-and-mortar shoppers into online customers, and provide Gemvara’s existing online customers with an in-store experience.

“We have new customers coming into the store and then we have existing customers from the website that see we have an existing store and want to meet us and see the product in person,” she said. “We’ve been tracking our visitors and who’s coming in. Fifty percent know us and come to the location, and 50 percent of store visitors have not heard of us, so we’re picking them up from foot traffic.”

Gemvara has invested in regional advertising for the showroom, taking out billboard space in the area. The store is located at 129 Newbury St., a prime Boston shopping destination.

“It’s the best shopping area in Boston so that was an influence (in choosing the location) and we looked in other locations, even New York City, but the store itself was the perfect size and location,” Holian said.

The showroom is staffed by Gemvara employees, from the Holian to the brand’s designers.

Holian said the company will make a decision on opening additional brick-and-mortar locations after the holidays.