Are Brick-and-Mortar Stores a Dying Breed?

Retail Jewelry Store


by Maggy Michaels Durrenberger  

“Absolutely not” is the short answer. Yes, the rate of online sales continues to climb each year. But let’s not leap into an abyss of despair by interpreting that trend as the inevitable death knell for the physical retail store. The U.S. Census Bureau News reported that e-commerce represented only 5.5 percent of total sales in the first quarter of 2013. That means brick-and-mortar retail is still doing 94.5 percent of the business.

Visionary Apple Returns to Brick-and-Mortar

The disruptive nature of technology will continue to impact and shape our world, but the power of technology is not without limits. With all the things it can do, the human experience is completely missing. That’s why Apple shocked the world back in 2001 when it opened physical stores across the nation. After all, electronics was one thing that most people were happy to buy online. But Apple knew better. By tightly managing employee-to-customer interactions, along with every detail of the store, Apple was wildly successful at creating a fun and casual customer experience.

Will Behemoth Amazon Follow Suit?

So many rumors were flying around about Amazon opening physical stores that PBS talk show host Charlie Rose asked the question directly to CEO Jeff Bezos last November. Bezos said, “The answer is we would love to, but only if we could have a truly differentiated idea.” Keep in mind this perspective comes from the kingpin of online retailers. The phenomenon of Internet marketing is barely out of diapers and yet a few of the giants are already recognizing its shortcomings.

The Call is Clear: Do It Better

The real challenge facing brick-and-mortar stores, particularly those on the higher end, is the ability to respond creatively to today’s new multi-channel world. Saving a few dollars is not going to be the highest priority for many potential buyers. More than ever before, the physical retailer needs to create value-added, pleasurable shopping experiences that keep customers coming back.

Macy’s CEO Terry Lundgren summarized it well in a Reuters interview when he said, “It’s clear to me that the consumer likes shopping online. I am focused on [this]: how do we make them feel as comfortable and ready to buy in our stores as they do online?”

About Gevril Group

Gevril GroupGevril Group is the exclusive US representative for select European watch brands, distributing and servicing luxury, fashion and sports timepieces at a wide range of price points. Gevril Group also operates a full-service watch repair department staffed by master Swiss watchmakers. Contact Gevril Group by email or by calling 845-425-9882.

Join the conversation! Follow Gevril Group on Facebook, Twitter and LinkedIn.

Please subscribe to the Gevril Group newsletter and blog digest.

The Internet Sales Tax Debate Continues

Marketplace Fairness Act Announcement


by John Sealander  

Is an Internet Sales Tax a Solution to a Problem That Doesn’t Exist?

With a stagnant economy and declining revenues, national, state, and even local governments are actively looking for new sources of income to fund government operations. One of the first places legislators look is the Internet. Although online shopping is still in its infancy, its growth has been nothing short of spectacular. The Bureau of the Census estimated there were $4.1 trillion in retail and wholesale transactions conducted over the Internet in 2010 and now everyone wants a piece of this pie.

Government entities at every level see online sales as an enormous new source of potential revenue. As their efforts to enact legislation to tax this new revenue stream increase, they have mounted a massive PR campaign to convince their constituents that taxing online businesses will level the playing field and offer significant benefits to traditional “brick and mortar” businesses in their districts. Large retailers like Walmart have jumped on this online taxation bandwagon, because they already have to charge tales tax on their online transactions anyway, largely as a result of having a physical presence in almost every state.

The Effect on Small Online Business

It’s a completely different story for smaller online retailers. The so-called Marketplace Fairness Act could be devastating for these businesses. The Marketplace Fairness Act represents a radical departure from existing tax law. If this legislation were to become law, individual states could begin to collect sales taxes on transactions that take place outside their borders. This is a significant expansion of current state taxing authority and is fundamentally unfair to smaller businesses.

83% of online sales currently come from “Big Box” retailers like Walmart, Best Buy, and Amazon. These companies already have a physical presence in most states and do collect sales tax on Internet sales. That’s why even though large retailers generally support the concept of an online sales tax; it could still hurt thousands of start-ups and smaller retailers.

These small businesses and an increasing number of their legislators now think that it would be an administrative nightmare for smaller business to comply with complex online sales tax laws, since each state and municipality can make their own rules. With thousands of different tax jurisdictions, each imposing their own tax rate, it could be extremely difficult for sellers to deal with a different set of rules for every out-of-state buyer.

Will The Marketplace Fairness Act Pass?

It is becoming increasingly clear that an Internet Sales Tax may be a solution to a problem that doesn’t even exist. After thirteen years of shopping online, these purchases still only represent 6% of total retail sales. In most jurisdictions, the traditional sales tax base is still solid.

Despite strong bipartisan support in congress, the Marketplace Fairness Act still faces a number of significant hurdles. The biggest of these hurdles is that an increasing number of people now believe that empowering states to collect sales taxes on transactions outside their own borders represents a radical departure from current tax policies and is fundamentally unfair. Rep. Morgan Griffith and Speaker John Boehner both predict that the Marketplace Fairness Act will not pass on the House floor.

With online sales continuing to grow at an astounding 16% a year, online taxation is not an issue that is going away soon. State and local governments still want a share of this lucrative pie. The real question now is whether it is fair to collect taxes to pay for local and state governments from a national audience. The jury is still out on this fundamental question.

About Gevril Group

Gevril GroupGevril Group is the exclusive US representative for select European watch brands, distributing and servicing luxury, fashion and sports timepieces at a wide range of price points. Gevril Group also operates a full-service watch repair department staffed by master Swiss watchmakers. Contact Gevril Group by email or by calling 845-425-9882.

Join the conversation! Follow Gevril Group on Facebook, Twitter and LinkedIn.

Please subscribe to the Gevril Group newsletter and blog digest.

Can Home Shopping TV Channels Transform The Way We Sell?

A Family Home Shopping


by John Sealander  

What Watch Retailers Can Learn From Home Shopping TV Channels

Now that people are becoming more comfortable with non-traditional ways of buying their favorite things, home shopping TV channels, such as ShopHQ, are experiencing unprecedented growth. As these new sales channels grow more popular, merchants and retailers are learning that the conventional sales strategies they’ve used for years aren’t always effective in an interactive TV environment.

Home shopping TV requires a different approach to be successful and retailers who have mastered selling their products in this interactive environment are discovering that the lessons they’ve learned from interactive selling can be applied to almost every aspect of their business.

The 60-Second Sale

Shopping channel retailers don’t have much time to make a sale. With less than 60 seconds to make your pitch, success is typically measured by how many sales you make per minute. This is a huge change from the weeks or even months it might take for customers to make a decision about something inside a glass case at their favorite jewelry store. To deal with the faster pace of the decision making process in a home shopping environment, retailers have become much better at recognizing the signals that people send indicating whether they are interested in buying a product or rejecting it.

The Importance of a Compelling Story

You need a compelling story to sell a watch in 60 seconds on TV. Simply listing product benefits is not enough. Successful TV sellers have learned to capture the attention of the viewer with an interesting story that gets them engaged with the product. A compelling story is so effective at generating a sale that many retailers are starting to employ the technique in their brick and mortar stores as well. Any great watch has a great story behind it and customers want to know about it.

Walking Away From a Loser

In a home shopping TV environment, you know immediately what sells and what doesn’t. If the phones aren’t ringing after your 60-second pitch, your product isn’t going to sell. To succeed, you need to quickly cut your losses and move on. This is very different than what happens in most retail stores. Brick and mortar stores can succeed selling luxury goods with a 25% conversion rate. To succeed on TV, you must convert a much higher percentage into sales. Retailers have learned that the best way to do this is keep selling your winners and quickly walk away from the losers. If you can’t get a viewer excited about a watch in 60 seconds, you probably aren’t going to get them excited period!

There’s More Than One Way to Sell a Watch

The most important lesson that shopping channel TV has taught luxury retailers is that there is more than one way to sell anything. In today’s digital age, you need to engage customers on-air, via the Internet, by phone, by magazine advertising, as well as by traditional face-to-face interaction in the store. Retailers who have made the effort to master all these new sales channels are seeing dramatic increases in sales along with a much faster turnover rate.

Home shopping TV is teaching retailers that selling is a two-way conversation. In today’s fast paced world, it’s not enough to simply tell people about your product. You must engage them emotionally. The success of interactive selling has proved that when the customer feels they have become part of the conversation, you have made a sale.

About Gevril Group

Gevril GroupGevril Group is the exclusive US representative for select European watch brands, distributing and servicing luxury, fashion and sports timepieces at a wide range of price points. Gevril Group also operates a full-service watch repair department staffed by master Swiss watchmakers. Contact Gevril Group by email or by calling 845-425-9882.

Join the conversation! Follow Gevril Group on Facebook, Twitter and LinkedIn.

Please subscribe to the Gevril Group newsletter and blog digest.

Amazon on the Verge of Joining Top-10 US Retailers

Amazon Warehouse


by John Sealander  

The World’s Second Most Valuable Brand
Moves up to Number 11 in US Domestic Sales

AmazonThere is no better sign that online shopping is here to stay than when a pure play online retailer is poised to join the ranks of America’s largest brick and mortar retail giants. The new kid on the block is Amazon, which jumped to number 11 on a list of the largest U.S. retailer in terms of domestic sales. Amazon raked in $34.42 billion in U.S. sales in 2012, a 30% year-over-year increase.

The Seattle-based online retailer is already ranked as the second most valuable global retail brand on a list that includes international retail giants like Walmart, Tesco, Carrefour, and Aldi. Cracking the top ten in the influential US market is considered significant because it clearly demonstrates that Americans are changing the way they shop.

Although giants like Walmart, Kroger, Target, and Home Depot, still lead Amazon in domestic sales, they are not growing nearly as fast as the online retailer. Traditional brick and mortar stores haven’t even been able to come close to Amazon’s impressive 30% year-over-year increase in sales.

Amazon’s Growth in the Luxury Industry

Amazon’s steady growth hasn’t gone unnoticed in the fine jewelry industry. For many years, Amazon has been creeping up in the ranks of the largest and most influential fine jewelry and watch sellers. Amazon is already ahead of familiar jewelry and watch sellers like Sears at number 13 on the list, and Macy’s at number 14. To put things in perspective, luxury retailer Neiman Marcus is all the way down at number 84 on this year’s list of domestic sales.

It seems clear that Amazon will soon join the exclusive ranks of the top-10 US retailers. If their performance continues at present rates, Amazon could even be number one in the not too distant future. This explosive growth has serious implications for anyone who makes or sells luxury goods. According to Gevril Group President Samuel Friedmann, Amazon will be an important component in any luxury goods marketing strategy. “Every year, we see an increase in the number of watches selling on Amazon,” says Friedmann. “Amazon sales are a part of world marketing strategy now, and will continue to be so in the future.”

About Gevril Group

Gevril GroupGevril Group is the exclusive US representative for select European watch brands, distributing and servicing luxury, fashion and sports timepieces at a wide range of price points. Gevril Group also operates a full-service watch repair department staffed by master Swiss watchmakers. Contact Gevril Group by email or by calling 845-425-9882.

Please subscribe to the Gevril Group newsletter and blog updates. Like us on Facebook. Reader comments are welcome.