We’ve all read the headlines highlighting how much the UK high street is suffering this year. The decline in footfall has been attributed to a change in consumer spending habits, as competition from online giants are tempting spenders to shop online. But how can independents compete with online-only companies who offer branded products at such a heavily discounted price?
Well that’s where Hot Diamonds and CMJ come in. We’ve teamed up with the jewellery supplier to support their bold new initiative to help tackle this problem. Adryan Cresswell, head of commerce at Hot Diamonds, explained to us that he’s had a number of conversations with retailers who have pointed out that consumers expect high street retailers to match low online selling prices for branded goods, which is harmful to high street retail margins. Especially as high street stores face hefty business rates, that have risen significantly over the past two years, that online retailers are exempt from. He noted that this seems to be a problem that is getting worse and wanted to get Hot Diamonds on board to try and tackle the situation head on.
So Hot Diamonds have made some bold strategic decisions to address this challenge. Firstly, they have recently ceased supplying the online market places that work to undermine high street retailers. The supplier feels that a presence within online marketplaces is no longer compatible with maintaining a strong brand identity for a company such as theirs. At the same time they need to retain a strong brand identity to protect their high street partners.
Secondly, they are offering their high street partners new collections, such as ‘Hot Diamonds Gold Collection’ that are simply not sold online at all with the exception of their own website (which lists all current lines at full RRP). Over time they may open these collections up to just two or three online partners, but these will be extremely carefully selected and will not include online market places.
Lastly, Hot Diamonds will offer intermittent ‘high street only’ incentives whereby all visitors to hotdiamonds.com and our social pages will be driven to the high street to take advantage of ‘high street only’ promotions that cannot be accessed on hotdiamonds.com. They will manage the logistics of these promotions and support their retail partners’ lost margin as a further gesture of support.
We took this opportunity to speak to Adryan Cresswell further in a short Q&A:
CMJ: As part of its ‘Support the High Street’ push, Hot Diamonds have recently ceased supplying the large online marketplaces. Was this a difficult decision?
AC: Yes, it was, but we know it’s the right decision for Hot Diamonds. Online marketplaces provided very significant revenue streams for us and to sacrifice these, particularly when the market is tough, is not a decision to be taken lightly. However, the bigger story for us is one of brand identity. We feel that the retail environment offered by online marketplaces is simply not conducive to delivering the brand identity we want to deliver and nurture. So we have acted now to safeguard the longevity of our brand identity.
CMJ: How long will it take, do you think, before you are happy with the way Hot Diamonds is represented online?
AC: We have ceased supplying all online marketplaces already. However, although we have taken a significant amount of current stock out of this segment of the market, we estimate the overall transition towards the kind of online presence we are targeting will take a few months.
CMJ: What made you think of partnering with the CMJ to instigate a ‘Support the High Street’ campaign?
AC: The CMJ is an excellent vehicle for driving change within the industry. Something needs to be done to help alleviate the adverse effects of declining footfall and online competition for the high street retailer. Hot Diamonds has taken decisive action by pulling out of online marketplaces, offering high street only collections and so on, but one supplier can’t make a significant difference on its own. With the CMJ though, we may be able to activate a critical mass of suppliers within our industry to join forces and get behind this ‘Support the High Street’ movement. Then we may start to see real benefit to bricks and mortar businesses.
Our CEO Terry Boot added: “When Hot Diamonds came to us with their vision to help ‘Support the High Street’ we knew it was the right thing to do for our members. Consequently, we are working with Hot Diamonds closely to ensure that as many CMJ suppliers as possible adopt such meaningful strategies. We are coordinating supplier meetings in January at which we will be sharing the vision we and Hot Diamonds have. If between Hot Diamonds and the CMJ we are successful, we can make a real change and both the high street retailer and the suppliers supporting them will reap the benefits over time.
This is not a task for the feint-hearted – we need to, and intend to, create a movement whereby our suppliers pull together to do all they can to support our members. Hot Diamonds are making a fantastic start and we hope many others will follow suit! We are truly passionate about driving this movement forwards!”