New Web Sites Poised to Alter
The Way Business is Done
By Carrie Soucy
Senior Editor
Web Posted: Aug. 18, 1999.
Appears in the Sept. 1 issue.
New York (July 28,1999)?As little as a year ago, naysayers predicted e-tailing would
never touch the fine jewelry industry. This fall, however, it seems that doubters will be
silenced.
At least two new Web sites will launch before the
holiday season, selling fine jewelry?including name
brands?and bombarding consumers with print and
television advertising.
One, Adornis.com, will begin offering jewelry to
consumers by October. The company has signed such
high-profile designers as Suna Bros., Lauren K.,
Hammerman Bros. and SeidenGang. The site will
concentrate on fine jewelry.
Another new Web site, luxuryfinder.com, has an
anticipated debut of Sept. 25 and targets consumers of
all types of luxury products?including fine jewelry and watches like Asprey, Piranesi
and Tourneau.
Both are charting new ground, wooing consumers of this traditionally personal
merchandise to the anonymous global venue of the Web?with the potential to forever
alter the fine jewelry retail market.
"We looked at the jewelry market, which, globally is about $100 billion, and said, 'Why
haven't we created for the consumer a medium like this,'" said Marion Davidson, senior
vice president for communications at Adornis.com, which is based in Greenwich, Conn.
Davidson and Adornis President Jeanne Daniel are no novices to the fine jewelry industry
and luxury markets, with both having a background at jewelry retail giant Tiffany & Co.
Though Davidson and others in the market of fine jewelry e-tailing say this new venue for
consumer exposure to fine jewelry will only strengthen the overall image and perception
of fine jewelry, traditional retailers are not so convinced.
Similar to sites that have had significant impact on other markets?like Amazon.com on
the book retailing industry?Adornis.com, luxuryfinder.com and others have put their
brick-and-mortar competitors on the defensive. Especially vulnerable are retailers that
have built their reputation on the exclusivity of branded merchandise.
"When you begin to do this with branded merchandise-that's been the high-ground for
retailers to separate themselves," said Bill Farmer, Farmer's Jewelry in Lexington, Ky.
"The question is: how will we keep our relationship with our customers?"
During the 1990s, this area of the market has mushroomed, thanks in large part to a
partnering between branded designers and retailers nationwide. The result has been a
growth in consumer exposure through such mediums as co-op advertisements
Now, some retailers are feeling betrayed.
"It's pretty black and white in my mind," said Lee Berg, Lee Michaels Fine Jewelry in
Baton Rouge, La. "I am a retailer and they are suppliers and if they start acting like
competitors, well, I don't do business with competitors. I have been a partner and worked
with suppliers to build their names. Now if they decide to sell direct to consumers, how
can I continue that relationship?"
Manufacturers, meanwhile, see this as not only a natural progression of the marketplace,
but also the wave of the future that they need to ride.
"We're not selling direct, we're selling through the retailer [Adornis.com]," said Carolyn
Gang, of SeidenGang, Rye, N.Y. "Anything that is going to be competitive to [retailers] is
a concern, but this is what is happening-with or without me."
Some designers echo Davidson's statement that this will actually help the fine jewelry
industry overall. Retailers, however, are gathering their thoughts about this new medium
and, at least right now, feel the threat of what else lies ahead.
"If this is the first step down this road, what's to keep [suppliers] from taking the next step
and saying, 'We don't need Adornis.com, we can sell right from our own Web site'?"
Farmer said.
If they did that-the argument goes from the supplier side-how is that different from
designers like Lagos, Aaron Basha and?this fall?David Yurman, who have their own
retail shops to promote their brand?
As they wrap their brains around this new concept, retailers are also concerned by the
issue of taxation. E-commerce is plagued by such questions, as Congress attempts to sort
out how to regulate and enforce sales tax online. For high-ticket items like fine jewelry,
tax can be a significant amount?perhaps enough to influence those consumers who would
rather touch and feel their jewelry before purchasing to try their hand instead at buying
online.
Retailers are discussing reactions of everything from launching their own e-tailing Web
sites to abandoning branded jewelry in favor of their own name-brands. The only reality
that all sides seem to agree on is the blur that lies ahead as the jewelry industry evolves to
make room for e-commerce.
"I think this is just the tip of the iceberg," Berg said.
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