Thursday, February 28, 2008

Why are online jewelry sales so high?

Officially, it appears that online jewelry revenues were about $4.8 billion or 7.4 percent of total jewelry industry sales in 2007. Preliminary jewelry sales in the U.S. market in 2007 were $64.8 billion.

Total Retail Online Sales for 2007 :

The U.S. Department of Commerce has reported that total online commerce was about $136.4 billion in 2007, up 19.0 percent from the prior year. As a percentage of total retail sales, e-commerce sales in 2007 were 3.4 percent, up from 2.9 percent in the prior year.
The graph below compares online retail penetration for all retail categories versus online penetration for jewelry sales.

Why are online jewelry sales, as a percentage of total industry sales, so high in comparison to the average for all retail categories? Currently, most online jewelry sales represent diamond jewelry. A recent study by ad agency JWT suggests that roughly 80 percent of all online jewelry sales are diamonds and diamond jewelry. Because diamond jewelry carries a much higher average ticket than other jewelry categories, the bias in sales towards diamonds is pushing up the reported online sales penetration. Further, consumers are increasingly buying from online jewelers because they offer the same goods at a much better price than most store-based jewelers.


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