Jewellers shut as buyers prefer online links…

July 19th, 2013   •   no comments   
Hatton Garden: In trouble?

Hatton Garden: In trouble?

Hatton Garden: Closing the shutters?

Hatton Garden: Closing the shutters?

..At least that is the claim made in a short item in the Daily Telegraph newspaper, that I came across recently, and also mentioned in The Times, and London Evening Standard. According to the piece, ‘discounted internet jewellery has forced one in five jewellers in Hatton Garden to close in the past year, and shops are also disappearing from high streets throughout Britain’. This bold assertion is made on the basis of a survey of 500 high streets conducted by an online jeweller, and refers to closers of H. Samuel, Ernest Jones, and Goldsmiths shops in what it describes as ‘key locations’. Now, I’m not in a position to criticise the research – I haven’t seen it because my enquiry remains unanswered – but I think the headline is just a little too pessimistic. No doubt the research was conducted with appropriate rigour, but is the conclusion just a bit too convenient to be credible?

When I first got involved in the jewellery sector nearly thirteen years ago it was confidently predicted that the internet was going to kill the retail trade stone dead. It never happened! Sure, the internet has forced many jewellers to up their game, not least because it is now so easy to compare prices, and commodity items have done well online. But overall the internet has proved an adjunct to the traditional business – if used wisely – rather than a knockout punch! For one thing it has given the traditional trade a nice shiny new, world-wide, shop window to exploit! And it can attract discerning customers with serious money, who require the reassurance of a bricks and mortar business, to the door of the upmarket or niche jeweller from further afield. Many now thrive on a combination of internet and physical presence that gives clients the best of both worlds.

But apart from my general unease about the validity of this assertive headline I also have a couple of other gripes. The high street jewellers referred to in the piece are pretty firmly established in the online environment themselves, and are canny enough to realise that a vast estate of shops all requiring staffing and servicing doesn’t stack up as a business model any more – specially when they can do so much of their core business online! Why not sell basic commodities that way and use the valuable showroom space to show off a little bit; generate excitement and up-selling opportunities; or to function as tangible customer service hubs?

Hatton Garden: Plenty of competition!

Hatton Garden: Plenty of competition!

But back to the article, and on the subject of Hatton Garden the dotcom company spokesman quoted confidently asserts that “17 of the 105 shop fronts have disappeared in the last year, with many turning into purely wholesale trade or turning business online only”. I find it hard to belief that the internet has had such a detrimental effect in such a short time. Firstly, and being picky, seventeen shops is more like 17% of the Garden’s 105 shops, not the 20% implied by the expression ‘one in five’ quoted at the top of the story, but maybe he was misquoted or I’ve misunderstood! And secondly it has long been the case that many of the area’s businesses traded under multiple identities and that wholesale and private clients have always made up the mix.

So it’s hardly surprising that businesses have once again adapted to the times, and concluded that expensive shop fronts aren’t the best place to slug it out on price with ‘competitors’ from the same stable.

Hatton Garden: Online part of the mix.

Hatton Garden: Online part of the mix.

Apparently, ‘some online retailers have seen sales up 300 percent in the past five years’. Nobody disputes the increase in online sales, but from what base, and what proportion of that increase comes from traditional retailers going multi-channel rather than buckling under the online onslaught? Are we to imply that this illustrates the decimation of high street jewellers? On this evidence  I would say the case remains unproven! What do you think?

Michael Hoare

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