The 2007 combined sales of web jewelry retailers ranked in the current Internet Retailer Top 500 Guide totaled $1.05 billion, up 36% from combined web sales of $772.4 million in 2006. In contrast, jewelry stores grew sales by only 2.7%.
Jewelry was the fastest growing retail segment in the 2008 Internet Retailer Top 500 Guide for a simple reason: web retailers are getting very good at giving consumers even more ways to conveniently research and purchase a big-ticket jewelry item online.
Before the onset of Blue Nile Inc., No. 48 in the Internet Retailer Top 500 Guide, and other web retailers, conventional shoppers had to depend on jewelry stores and sales associates to select a diamond engagement ring, learn about factors such as cut and clarity, and then figure out what amount to spend.
But with the onset of web-based jewelers, shoppers now have the power to research, select, personalize and pay for an expensive piece of jewelry online. With more consumers finding it easier and more convenient to shop online, the combined 2007 sales of web jewelry retailers ranked in the current Top 500 Guide totaled $1.05 billion, an increase of 36% from combined web sales of $772.4 million in 2007.
In 2007 the combined performance of Top 500 web jewelers easily outpaced the growth of store-based jewelry store sales, which grew by only 2.7% to $30.7 billion from $29.9 billion in 2006, according to the U.S. Department of Commerce.
Online jewelers in the Top 500 Guide easily outpaced the performance of most of the biggest chain retailers, including Zale Corp. and Tiffany Inc. In 2007 Zale, the biggest jewelry retail chain, posted total sales of $2.43 billion, essentially the same sales as in 2006. The company, which operates about 2,100 locations, also reported a decrease in comparable store sales of 0.2%. Tiffany grew its total sales in 2007 by about 15% to $2.93 billion from $2.56 billion in 2006. Comparable store sales in the U.S. increased by 7%.
In contrast to chain-based retailers, the two largest jewelers ranked in the 2008 Top 500 Guide – Blue Nile and Bidz.com Inc. – grew their 2007 web sales by 27% and 41.7%, respectively. With 2007 web sales of $319.3 million vs. web sales of $251.6 million in 2007, Blue Nile owned 30.37% of the online jewelry market as measured by the Top 500 Guide. Bidz.com, No. 74 in the Internet Retailer Top 500 Guide, with 2007 web sales of $187 million, controlled about 18%.
Rounding out the remaining jewelers ranked in the 2008 Top 500 Guide are Tiffany (No. 88), Jewelry Television (No. 135), Ross-Simons Inc. (No. 141), Ice.com Inc. (No. 144), Zale (No. 170), Jomashop (No. 222), Goldspeed.com (No. 389), Limoges Jewelry (No. 393), Seta Corp. (No. 484) and Abazias Inc. – now part of OmniReliant Holdings (No. 490).
In 2007, according to the Top 500 Guide, Tiffany posted web sales of $150 million and accounted for 14.3% of the market, compared with Jewelry Television, Ross-Simons and Ice.com, which posted sales and market share of $85 million, $84 million and $83.4 million and 8.1%, 8% and 7.9% respectively.
Zale posted web sales of $60 million in 2007 with a share of the market of 5.7% while Jomashop.com recorded e-commerce sales last year of $60 million and had a market share of 3.7%. Rounding out the Top 500 jewelers were Goldspeed, Limoges, Seta and Abazias with 2007 web sales and market share of $14.5 million, $14.3 million, $7.7 million and $7.3 million and 1.4%, 1.4%, 0.73% and 0.69%, respectively.
In 2007, the biggest three Top 500 jewelers grew their combined average ticket by 12.5% to $1,777 from $1,580 in 2006. Web sales and average tickets are rising among online jewelers because they are introducing even more advanced features and functions that make it easier for consumers to research and buy rings, necklaces, bracelets and other fine jewelry over the Internet. Blue Nile lets shoppers personalize and build their own rings and Bidz.com in May began offering differing versions of its web site in several other languages beginning with Spanish.
Even in a softer economy, Top 500 jewelry retailers continue to grow, although more slowly. Blue Nile Inc. reported net sales of $73.7 million for the quarter ended June 29, up 2% from $72.1 million in the year-ago second quarter. Net income for the quarter dropped to $3.2 million, compared with $3.8 million a year ago. In comparison Bidz.com reported net revenue of $54.8 million for the second quarter of 2008, a 40.5% increase compared with $39 million for the same period in 2007. Net income for the second quarter ended June 30, 2008, increased to $3.6 million vs. net income of $2.9 million in the same period of 2007. “There still is a tremendous opportunity for us to capture a larger share of the global jewelry market, which is expected to reach $213 billion worldwide by 2010,” says Bidz.com CEO David Zinberg.