Measuring the eCommerce Explosion
Written by Bryan Cockerham, CTO & Partner
It's a good time to be alive in the eCommerce world! As an eCommerce company, we get to have a finger on the pulse of the next chapter of the jewelry industry. Online engagement is on a sharp rise, and keeping tabs on what is going on is important to stay ahead of the curve.
Having this "pulse" also puts us in a good spot to see patterns, recognize trends, and even make predictions on where things are going. When all graphs show the same thing, the metrics are hard to ignore.
It also allows us to draw definitive lines. Why are some jewelry stores seemingly on their way down while others are soaking up the excess and opening additional stores?
Some Remarkable Stats for 2021
Stats so far: (Images)
Average order value has increased to over $800 for the first time.
Both July and August saw AoV above $800.
Total sales volume has increased 340% since last August!
Total transaction count has increased 230% from August to August
2020 was already an incredible year for eCommerce growth. As we reported in a few talks: across our platform, we saw a 500% increase in overall sales as clients rushed to invest in eCommerce. This was predictable. Stores were closed, and the online realm was the most direct way to meet customers where they were.
2021 Will Break New Records
Here's the best part, according to our platform stats so far, eCommerce sales will more-than-double this year over 2020. This was not expected as the vast majority of stores are back open, and customers are not confined to their couches. If anything, the expectation was for eCommerce to slightly decline as people started using brick and mortar again. It appears as though a chain-reaction has started; Consumers became more comfortable shopping online last year, retailers invested more money into their eCommerce -- making consumers even MORE apt to buy online. This is not only the "new normal" as they say, it's actually still growing.
Stores that historically saw < 2% of sales coming from their website are now seeing 5-10%. These are still small numbers, but it's also a strong sign of things to come. At this juncture, stores that haven't invested in eCommerce and marketing are going to have a hard time keeping up in the coming years.
Here's a staggering statistic: nearly 100% of new jewelry customers are being acquired via website visits -- a prediction we made back in 2017 when we opted to rebuild Punchmark to support this. Nearly 100% -- this fact alone is cause for some deep reflection. Is your homepage and your landing pages set up in a way that is deserving of the first place all new customers see?
Average order value (AoV) is a measure that tells us how much money people are spending. A few years ago, the majority of jewelry items sold online were pricepoint items that ranged between $150 and $250. This AoV is increasing steadily-- which has a very strong significance for our industry. Jewelry items are inherently expensive. When people are only comfortable spending small amounts online for fashion, it inhibits how much jewelry can be sold. Up until now, it has even raised the question about whether eCommerce is even worth being taken seriously for jewelry stores. The fact that average order value is now in the $800s, and that we are consistently seeing sales over $10,000 means that consumers are ready to spend serious money on jewelry online.
Clients Who Are Growing vs Clients who Aren't
We noticed saw all the way back in 2016 and 2017 that there was a stark difference between jewelry stores that were growing, and stores that were becoming obsolete. Those lines have continued to sharpen and widen over the past 5 years. There is a very clear distinction between stores who are taking the online world very seriously and those who aren't.
Using just one very representative example, we have a store One client of ours who did very small eCommerce numbers in 2016, but had a goal of growing it into something meaningful. They began investing time in getting better pictures and spending some money in digital marketing. They are now seeing numbers well into the 100,000s in eCommerce. The growth that they are experiencing means that this will steadily increase for them as they reinvest their profits in more marketing.
ALL of our best stores have an employee in-house dedicated to the web in some capacity. This person is in charge of not only making sure the website stays relevant and up-to-date with what's going on in the store, but they are also merchandising items, constantly refining navigation elements, and keeping the look of the site from standing still. Having that person to translate between brick and mortar and web is imperative, even if they're operating at an intern level. The stores who attempt this role at an owner-level nearly always suffer from the owner trying to do too many things. We witness one or two steps forward, and then a long pause, as the owner catches up with other priorities. Hiring a dedicated web employee makes a big difference.
Working through the Pain
It's a slow process. The idea of slowly finessing item details, replacing item images, and optimizing digital marketing campaigns can be daunting. The only thing more painful than doing it is not doing it. As our director of digital marketing often says, "The best time to start was 5 years ago. The second best time to start is right now."
Let's Ride this Wave
This letter was meant to get you energized. These 2021 trends are impressive, and we couldn't wait to share these stats with you. We have been seeing an uptick since July, but it wasn't until we ran some of the 2021 year-to-date stats that we got clear proof that the boom is real.
This letter was also meant to let you know that the time is now. Whatever you put into eCommerce now will pay back in droves as online purchases in the jewelry industry continue to grow. It's crazy to think that even in 2021, when the whole world has gone digital, there is still time to get ahead in this industry just by putting one foot forward. This holiday season will be the best yet. Let us know how we can help.