Implication Analysis
Professional / Educated Male: they buy with a distinct purpose in mind and tend to pay for the quality. (e.g. wedding, fiancé, promotion, etc.)
Female Customers: impulse buying is a major trait in how this segment shops for jewellery.
Age Group 35 – 50: general shoppers, they tend to buy stock pieces with a recipient in mind e.g. spouse, children, etc.
Over 51 (Mature): they tend to buy older jewellery, antique and estate pieces.
Trade Analysis
The products of Nash Jewellers will only be distributed by the retail locations. Customers will be able to use the website to browse the company’s online catalogue and to design their own jewellery with DJOL. However all payments and pickups will be done in person at a retail location.
The reasoning behind this is that a large purchase such as custom jewellery, which is very subjective, is best handled in person. Therefore, if any issues, problems or questions arise about the pieces, they can be handled immediately by the highly trained staff of Nash Jewellers.
This will shrink the now global market that is able to access the company’s website, because they are only selling their products in retail locations that these people viewing the site may not be near to.
Competitive Analysis
Nash Jewellers will have to be cautious as they move forward with expanding their market share on the global stage, as the competition will be heating up for customers worldwide.
External Analysis
Contribution Analysis
Online Pricing = Annual Rate (Gray Evans) + (Monthly Cost x 12 Months)
= 1500 + (50) (12)
= $2100
Marginal Profit = Average Sales x Margin (assume a margin of 50% on sales)
= 1000 x 0.50
= $500
Breakeven Point = Total Cost of Website
Marginal Profit
= 2100
500
= 4.2
Therefore, if the website can generate annual referrals that turn into 5 or more sales, the website will be profitable. (Data can be collected by customer surveys or questionnaires.)
Corporate Capabilities
Finance – Nash Jewellers has survived 82 years, adapting its business model during hard economic times and has just recently opened a new location in the Masonville area, which is one of the fastest growing areas of London. The current downtown location has dropped in value substantially and the Masonville location is one of many jewellery stores located in this newer area, resulting in a lot of competition for the customers shopping in this area.
Marketing – Nash Jewellers has had great success in recent years with radio and TV advertisements as well as the current newspaper advertisements they run in the London Free Press. With many different jewellery stores in London, Ontario (70+) it is hard for the “average Joe” to find Nash Jewellers amongst all of their competitors’ ads located in all the same places.
Production – Nash Jewellers has 4 goldsmiths currently on staff (2 in London and 2 in Toronto), which are able to make custom jewellery of high quality and breath taking design for their clients in a reasonable amount of time. Currently, there are no on-site goldsmiths for Nash’s because of the high cost to setup the equipment and salaries.
Human Resources – Nash Jewellers offers training for all of its employees to become certified gemologists, which adds to the customer experience and in the end hopefully to the company’s sales figures.
Nash Jewellers is still in good standing within the London community, but there are challenges it faces as it tries to expand its market share globally.
Alternative Analysis
Alt 1:
The website for Nash Jewellers will be used specifically for advertising the current stock items Nash’s sells as well as customers being able to use DJOL to design custom pieces online. All of the sales of the jewellery will be completed in one of the Nash stores.
Pros:
- This will allow Nash Jewellers to avoid the logistical and legal issues of selling items online such as shipping, insurance and returns
- This will allow the company to build on high quality customer service by having the customer come into the store to complete the sale
- Able to attract a larger potential market outside of the London area
- All issues that may come up with a custom or stock product can be dealt with in-store before being made instead of having these issues addressed after the piece is made
- This will allow the customer to have a more focused idea of what they are looking for when entering the store which in turn will allow the Nash Jewellers employee to serve them better
Cons:
- The company can potentially be losing sales by not selling products online
- Pictures on the website may make the actual product look different than what it actually does
- By not selling online, Nash Jewellers is shrinking the global market
- Customers having issues on the website have no way of getting help while on the website
Alt 2:
Provide Gray Evans with pictures, articles, stock products and access to DJOL so the website can be completed in 4 months, fully functioning as an advertising/ information vehicle with a simple easy to remember domain name ().
The website should have a simple gallery feel interface so the customers could simply point at click to browse the catalogue of stock products Nash Jewellers carries. The graphic should be rich and luxurious e.g. simple black back group with gold script lettering, which will keep our high end brand in the customers’ mind. The site will consist of photos from as far back as the company can go showing the progression of the downtown store, as well as the articles that have been written about the company over the years and the current sponsorships the company is involved with. There will be a DJOL section where customers could play around with designing their own jewellery online from the comfort of their own home.
Pros:
- This will be another advertising stream which will allow Nash Jewellers to compete on the global market
- With all the information provided to Gray Evans, the website should be up and working in the 4 month timeline John has placed on it
- This will allow customers to design their custom items online without visiting the store as well as see the stock items the company carries
Cons:
- The site may not be perfect when it first launches
- The site could confuse people who are not tech savvy and do not realize they cannot purchase products, only view and design them online
- Some people may consider the unavailability of prices online as a drawback
Alt: 3
Advertising for the website will be done in store, on the CJA and Lazare Diamonds websites and at the John Labatt’s Center (where the OHL’s London Knights play). There will be no pop-up or banner ads on the Nash Jewellers’ site, but there will be links to the CJA, Lazare Diamonds, London Knights and JLC websites. The website will not be advertised on social media e.g. MySpace, Facebook and Twitter.
Pros:
- Advertising the website in this way will reach many potential customers
- Continues to show a high quality product by aligning with high end suppliers and reputable partners
Cons:
- Getting advertising space at the JLC will prove to be expensive
- These new advertisements may not attract the same high end clientele Nash Jewellers is accustomed to
- CJA / Lazare Diamonds may not agree to link their websites back to Nash’s website
Alt 4:
Nash Jewellers will use an online / in store guest book to gather customer information (e.g. Name, e-mail, address, etc.) and will use this information to create a personalized, monthly newsletter (email form) offering information about new products and educational sessions the stores are having as well as current sales and discounts for special occasions the customers may qualify for (birthday, wedding, work promotions, etc.).
Pros:
- This is a unique service that might not be offered in London currently
- This will show loyalty to the existing customers and it will help build a long term relationship with the company’s new customers
- This will promote the company as forward thinking and technologically savvy
- Can lead to increased sales
Cons:
- Customers may see the newsletter as junk mail (spam)
- Customers may not want to give out personal information, or they may not have an email address
- It could be time consuming and costly to gather and maintain the customer information as well as produce the personalized newsletters
Alt 5:
Nash Jewellers should expand into another market in Southern-Ontario.
Pros:
- If the company stays in the Southern Ontario region, the new location would be able to receive help from the other Nash Jewellers locations in London
- Opens up another market to Nash Jewellers which could potentially lead to more sales
Cons:
- Entering a new market is risky and there are new competitors that are more well established than Nash’s already there
- Opening a new location is costly
Alt 6:
Do not open a website; keep operating the business the same.
Pros:
- No increased costs
- No change
Cons:
- Falling behind technologically
- Competitors could start to grow faster with their acceptance of the internet
- Nash Jewellers will seem “old” to the new generation of customers if it does not create a website
- The company will not be reaching as many potential customers as they could be with a website
Decision / Recommendation
This is a big decision for Nash Jewellers as times are changing as they always do, and with a company history that stretches back 82 years they have had to adapt over time; be it by expanding the downtown location or opening the new location in the Masonville area or when they survived the “Great Depression” in the 1930’s.
Short Term (0 – 4 months): Nash Jewellers should go with Alt 1 where they would establish a website for the company and use it strictly for online advertising of the company’s current stock products and their ability to create stunning custom jewellery pieces. They will also need to look at Alt 2 as these would work hand in hand with each other to make this a website in the 4 month timeline that was put forward by John C. Nash. On the website the customers will be able to use the DJOL program to design custom jewellery to fit their tastes as well as browse the current stock items Nash’s is selling. Other than the advertising function the website offers, the company should do a section on the website to promote their remarkable history through articles that have been written about them over the 82 year history of the company. The company should also do a “Time Line” section which would display pictures of the downtown London location and the changes it has been through over the last 82 years. The company should keep in mind that a simple web address such as would be easier for the customers to find when they are looking for the website.
Medium Term (4 – 8 months): Nash Jewellers should look to implement Alt 3, which would be how they would get the message out about their new functioning website by advertising in the John Labatt’s Center and to use the company’s relationships with Lazare Diamonds and the CJA and have links placed on their websites directing the web viewers to in hopes of generating in store sales from what they see there. To increase traffic on the website, Alt 4 should be put into motion; it would take a while to gather all of the customer information needed to create an e-mail newsletter (personalized). This would increase sales because of the promotions the newsletter would be offering to the customers; the company will have the newsletter personally addressed to each customer which should add to the feel of the e-mail and create a good rapport with them, improving the relationship between the company and its customers.
Long Term (8 month – 2 years): Nash Jewellers is well aware of the 70+ jewellery stores in London which service the city and the surrounding area. Acting on Alt 5 in the coming near future with the exposure they should be expecting from is to expand into another area of Southern Ontario within reasonable distance from London (e.g. Hamilton, Kitchener-Waterloo, Windsor, etc.)
Implications
Short Term (0 – 4 months): Nash Jewellers may have a lot of lost sales due to the fact that this is now a global market and people around the world would be able to access the website, yet would not be able to purchase anything without going to a store. That being said about the world being a global market, other websites which customers are able to purchase products from would now compete with Nash Jewellers in London, Ontario.
Medium Term (4 – 8 months): Choosing these streams to advertise through would be expensive and they may not draw the usual customers that Nash Jewellers is used to. Getting the websites to link back to the Nash Jewellers website may prove to be difficult especially if they are currently not linked to any other sites due to the fact that this may set a precedent for the companies they do not want to have. Getting the customers to give their personal information for a newsletter email may prove difficult, as well as the newsletter being seen as junk mail (spam) and dismissed by the customers receiving it, proving to be a waste of time and money for the company.
Long Term (8 months – 2 years): Expanding into a new market with no past history is a risky move that can prove very costly to the company’s reputation and finances, most likely, if it fails due to the fact that there are already established jewellery stores in that market.
Justification
New technology (the internet) has emerged and it is being used to sell and promote products. Nash Jewellers needs to setup a website to promote the products they sell as well as what they can make for custom jewellery. With this being a product that is subjective to the buyer and is a high end product, the most common sense solution would be to touch, feel and see the product you are purchasing in person, so in store sales seems to be the only viable path for the company.
Through the website, the company is looking to gain more promotion for their products and posting more advertising on specific websites and in sporting arenas would attract a higher end customer to Nash Jewellers, which is what their products are geared towards. The gathering of the personal information of the company’s customers will allow the company to better know their customers and to generate sales with existing customers, which is something all companies want to do as it is cheaper to maintain a customer then it is to gain a new one.
Expanding into a new market will allow Nash Jewellers to create more profits by penetrating the new market and in turn will put the company’s name into more places.
Contingency
If the website does not work just as an advertising engine Nash Jewellers will have to look at changing the interface of the website so that customers can purchase jewellery from the website to try and increase the sales. If traffic on the website is low then advertising the website on the social media sites will have to be invested in.