Flowers, Gifts and Jewelry:
Taking the anxiety out of gift giving

Diamond.com
Upscale and online

Talk about vertical integration: jewelry retailer Diamond.com draws a line of ownership that reaches back almost into the De Beers mines. In addition to a large stake under private ownership, Diamond.com’s parent company, Odimo Inc., is one-third owned by The Steinmetz Diamond Group, which cuts, polishes and distributes about 70% of the diamonds mined by De Beers.

That puts Diamond.com close to the nucleus of the diamond industry. And gives it ready access to a broad selection of GIA-certified diamonds—the only kind it sells—while leveraging the powerful marketing efforts of both Steinmetz and De Beers. That puts added sparkle on its own online efforts, says Michael Dell’Arciprete, chief marketing officer.

For example, Dell’Arciprete says, Diamond.com was among the first online jewelers to launch collateral developed by De Beers for its right-hand diamond campaign. “We had it up in mid-October, while most retailers didn’t launch it until November,” he says. The campaign, which encourages women to purchase their own diamonds in an empowerment theme, dovetails with Diamond.com’s marketing plans. Unlike online competitors that prioritize the male engagement ring customer in the hope he’ll return for subsequent gifts, or the woman buying on her own but at a lower price point, Diamond.com is after both. For men seeking an engagement ring, there’s help in designing a ring online; while women shopping on their own are encouraged to upgrade to fine jewelry.

In fact, 62% of Diamond.com’s customers are women. “We’ve drawn in the female customer with the right-hand diamond ring and a wider selection of fine jewelry and watches,” adds Dell’Arciprete. “Repeat purchase potential with women is much higher.”

A relative latecomer to the web, Diamond.com launched in 2000. It’s the cornerstone of a broader luxury brand on the web, with the addition in 2001 of WorldofWatches.com and the acquisition and relaunch of luxury retailer Ashford.com this year.

Diamond.com is using some of the new best practices common among e-retail’s leaders but not widely used in the luxury goods segment; such as directing shoppers who come to the site from a search term directly to the product page rather than to the home page. But the online retailer also knows when to stay with a traditional approach: for example, cross-sells, offered on 40% of products, are selected not by collaborative filtering technology but by merchandisers.

“They are trying to think about luxury products online in a way that will make sense for consumers,” says Jupiter research analyst Patti Freeman Evans.

Hallmark.com
A card-carrying flower site

With a powerful brand in gifts and greeting cards, Hallmark Cards Inc. decided a few years ago to add flowers to its retail mix. But selling perishable products in its national chain of Hallmark Gold Crown Stores—now numbering 4,300—didn’t make economic or logistical sense. “We felt that flowers made a lot of sense for us,” says Jay Dittmann, vice president of consumer one-to-one marketing for Hallmark.com. “But we also felt that if we’re going to be in the flower business, it would be easier in the direct business. Our ability to display products, explain features and promote our lines just works better online.”

The company introduced flowers to Hallmark.com in 2000, a year after the web site launched with cards and gifts. Hallmark is privately held and doesn’t release financial numbers, but Dittmann notes that cards, gifts and flowers sell well when offered in combinations. “We’ve had good success when adding gifts or cards to flower bouquets, and we’re looking to do more of that,” he says.

Neil Stern, a principal with retail consultants McMillan/Doolittle, says Hallmark has succeeded quickly in extending its brand to cover the floral market on the web. “Their brand extension into floral is a great example of what you can do online that you can’t easily do in stores,” he says.

It’s also an example of how a new venture backed by capital and a strong brand can do things right from the start, he adds. “They can be late to the game in selling flowers, and be a major player just because of who they are,” he says.

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But Hallmark didn’t rely only on its brand, which has been around since the late founder Joyce C. Hall and his brothers began peddling postcards in Kansas City, Mo., in the early 1900s. Before going live with online floral sales, Hallmark established a distribution center in Memphis, creating a centrally located fulfillment and shipping center for overnight delivery throughout the U.S. of fresh-cut flowers sourced from South America, Europe and the U. S. Separate orders of gifts and cards are shipped from a network of other distribution centers. In addition, to satisfy requests for same-day delivery, Hallmark works with a network of florist partners.

It also offers a “Celebrations and Ideas” section to suggest cards and gifts for special occasions. And in a special service that helps keep traffic steady at its web site, it offers Hallmark e-cards at no charge. “The e-cards drive traffic to our site, and we use that traffic to promote our other products,” Dittmann says. m

PersonalCreations.com
This time, it's personal

Give a gift and chances are you’ll bring a smile to the recipient’s face — personalize it, and you’ll get a bigger smile. “That’s what our customers tell us,” says Geoff Smith, president of e-commerce and new business development at Personal-Creations.com. “The fact that you’ve gone that extra step to personalizing the gift makes people feel really special.”

It’s a sentiment that drives sales at Personal Creations, which sells—and will personalize with names, messages and photos of the giver’s choice—a broad range of toys, collectibles, apparel and home accessories at prices set to entice even frequent gift buyers. Smith notes that while the average gift sells for under $25, options for personalized gifts range from $9 to $150. The company launched as a catalog in 1989, and it supplies personalized gifts to other companies including Toys R Us Inc. But the e-commerce b2c arm is its fastest growing segment, and web sales now represent 52% of sales.

The web site, launched in 1996, has brought extra efficiency to operations. The product makes perfect use of the medium of the web because it requires shoppers to type in the name to be personalized or the message added to the gift themselves when they place their order online, Smith says. That reduces the possibility of errors, for though the call center reps are well trained in taking customer information, there is more than one way to spell many names.

While customers can also contact the call center to walk through their gift needs and place an order, the web site does an admirable job of guiding the online shopper through the options with a clean, uncluttered interface and site search process that mirrors how the buyers of personalized gifts shop for products. A left-hand list of text links lets shoppers search by specific occasions or by gift recipient. Subcategories under the links then let shoppers see a selection of gifts for a particular occasion according to recipient, or gifts for a recipient on a particular occasion. Sizeable thumbnails in each set of search results quickly pull up even larger views providing considerable product detail.

PersonalCreations.com doesn’t just use the web to transact sales; it harnesses its real-time customer data to re-merchandise on the fly. When a wedding album on the home page failed to attract the expected customer attention, for example, Smith put another product, already doing well on a page deeper in the site, in its place. “My colleagues in the catalog business have to wait and hope,” says Smith, “but on the web site, we can react right away.”

YankeeCandle
Lighting the way to customization

One of the great promises of online retailing is the vaunted “market of one.” With the right technology, the thinking goes, retailers can create products that appeal to the individual. While many sites have tried to create that market, few have succeeded. One that has is YankeeCandle.com.

Yankee Candle is starting simply, with a custom candle feature. But by aggregating demand at the web site and offering a quick and easy way to create a personalized candle, Yankee Candle creates an experience that shoppers can’t easily have in other channels. “This is one of the best custom applications I’ve seen online,” says Mary Brett Whitfield, senior vice president of consultants Retail Forward Inc. “They are using the Internet in a way the Internet was designed to be used.”

Using Macromedia Inc.’s Flash platform, Yankee Candle allows customers to try out different configurations of candles and alter components without having to start over. Yankee Candle stressed with designer Molecular Inc. it wanted the feature to be easy to use, says Dennis Shockro, vice president of information systems. “The key thing at our site is usability,” he says. “We tested the design with people internally and externally.”

Not only has the feature resulted in increased custom-candle sales, it also has decreased customer service calls from 90% of custom candle buyers who used the previous static system to 25% today, allowing Yankee Candle to re-deploy staff and eliminate backlogs of phone calls and spillovers to backup call centers.

The emphasis on usability also had other effects. For instance, YankeeCandle.com made its shopping cart easier to use and displays cart contents at all times a customer is on the site. The result was a sale completion rate that jumped from 58% of all shopping carts to 75%, Shockro says. Preliminary performance tests also show YankeeCandle.com delivers 100% uptime and transaction times in the top 10 of retail sites, Shockro says. The result: sales are up 27% from YankeeCandle.com’s redesign in May to now versus virtually no growth in the prior year.

Whitfield notes that Yankee Candle has also done an excellent job of site organization. “They have thought of all the ways consumers approach the category and designed the site around that,” she says. “If you use candles for decorating you can sort by color. If you want scents, you can sort by fragrance.”

With steady growth and improvements on the web, Yankee Candle is focusing on creating the same shopping experience across channels. “If the product is not in the store but you can send customers to where it is available, whether that’s the web site or the catalog, they’ll keep coming back,” Shockro says. m

Zales.com
Educating and merchandising

Having the most technologically advanced site with the fastest connection speeds is not always the best for an Internet retailer. Take Zales.com, the online operation of jewelry chain Zale Corp. Sometimes Zales customers need to take a little longer to get to the products they want, but often the travel time can be beneficial.

“This site is not real tricky and it doesn’t have a lot of bells and whistles,” says Mary Brett Whitfield, senior vice president of consultants Retail Forward Inc. “But it is a non-threatening site that is helpful to customers who are new to buying jewelry.”

The site is geared primarily to men who are buying jewelry for wives, girlfriends and fiancees and it assumes the men need help finding the right gift. It even has a “hints” feature where potential brides and other women can register items they like so buyers can check to make sure what they’re purchasing will be well received.

While Whitfield notes that the Zales site is not the fastest in getting consumers right to where they want to be, that is not always bad. “A lot of sites let you tell them exactly what you want then take you to those products,” she says. “But a lot of

Zales’ customers may be unsure of what they want, so the site asks a lot of questions, then slowly narrows down the choices.” In the process of navigating the site to find products, the customer can learn more about jewelry and reflect better on what he or she really wants.

The site also has educational content about jewelry, such as sections that explain the differences in diamond cuts, color and carat size, or that tell customers how pearls are made and valued.

At the same time, images of products are clear and give the customers a good idea of what the potential purchases really look like. “The pictures are sharp and they give good details on items like earrings where you need to see them up close,” says Whitfield.

The web site is also well integrated with Zales’ other sales channels as it has a store locator and Zales’ catalogs emphasize that a larger product selection can be found on the web site. Zales also allows store return of merchandise purchased online.

Zales.com’s customer base is similar to that of its retail stores—middle-income consumers accustomed to shopping in suburban malls. “Zales is competitively priced, but it’s not a discounter and it’s not a high-end jeweler,” Whitfield says. “It knows its Middle American consumer well and everything in the web site reflects that understanding.”