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Dec. 2000

While Jewelry and Diamond e-tailers may be facing a shakedown—with companies like Miadora and Adornis shutting their virtual doors to business in recent months—overall online retailing is continuing to grow, according to a recent survey. Ninety-six percent of last year’s holiday online shoppers intend to purchase gifts online again this year, according to a Boston Consulting Group and Harris Interactive poll.

“The vast majority of last year’s online holiday shoppers said they are willing to give it another go. and they are also willing to spend more this time around,” said Michael Silverstein, BCG senior vice president and leader of the consulting firm’s Consumer Practice. “Many consumers aren’t, however, prepared to go back to sites where they experienced purchase failure… they will go to different online retailers.”While online retail is growing, brick-and-mortar jewelers should keep in mind that it is not a significant threat to traditional retail this season. There is less funding for such online portals—witness the demise of Adornis and Miadora—making marketing and advertising more difficult. This also creates an increased need for profitability, which drives up retail prices online. Finally, online purchases remain much lower than average jewelry prices. For example, according to the survey, last year, the average online shopper spent $170 on holiday gifts. This year, those same consumers expect to spend $240. The entire sum of online sales this holiday will amount to only about 1.5% of overall retail sales. In a reversal of last year’s holiday shopping trend, however, consumers are moving toward online retailers with a brick-and-mortar presence this season, according to a Jupiter Media report.

According to the Industry Standard, analysts predict that already-established brands—like—will be the ones to succeed in the race to sell diamonds and jewelry online.

According to a study by Forrester Research, quoted recently in the Industry Standard, jewelry customers are prime for online sales:

Millionaires spend twice as much money as the rest of the online population and are more likely to believe that a better brand means higher quality.

About 45 million online buyers will spend about $12.5 million this season, according to eMarketer.

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