Webster’s Jewellers

ADMN 1207A
Professor Pelham Matthews
M. Budau 199676890, N. Contois 199646560, K. Fischer 189609730, H. Greer 199606810,
D. Griffith 199650920 Group
March 24, 2020
Contents
Memo . . . . . . . . . . 3
Case Report
Introduction . . . . . . . . . . 4
Problem Statement . . . . . . . . . . . 4
External Analysis . . . . . . . . . . 4
Internal Analysis . . . . . . . . . 4
Key Success Factors . . . . . . . . . . 5
Feasible Alternatives . . . . . . . . . . 6
Recommendations and Implementation . . . . . . . . . . 6
Contingency Plan . . . . . . . . . 8
Control and Feedback . . . . . . . . . . 8
Conclusion . . . . . . . . . . 8
References . . . . . . . . . . 9
Exhibits . . . . . . . . . . 10

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Date: June 2016
To: Wilfred C. Webster, Owner of Webster’s Jewellers
From: Algoma Consulting Corporation
Subject: How Should Webster’s Jewellers Expand Through Marketing Initiatives?
Recommendations & Implementation
Short Term (1 Month to 1 Year)
 Create a functional website so customers can compare to other retailers online and view
Webster’s currently available stock.
 Establish a social media presence to gain an audience and build personal relations with
potential customers.
 Establish a layaway program and advertise in advance of holidays.
Medium Term (1 Year to 4 Years)
 Develop an online marketplace for the website with the capacity to create custom
jewellery and where customized jewellery is outsourced to an offsite goldsmith to allow
Webster's to offer more services.
 Create financing options so that customers who can’t afford to purchase expensive
jewellery upfront are still able to buy jewellery.
Long Term (4 Years +)
 Construct a workshop where jewellery can be manufactured and hire two goldsmiths to
create customized jewellery which will allow Webster's to save money from outsourcing.
Control & Feedback
Webster’s should measure profitability, sales revenue and market share of online sales compared
to similar jewellery retailers. The primary measure of feedback will be profit from custom
jewellery sales.
Contingency Plan
If profitability is not as expected, Webster’s should not build the suggested workshop and not
proceed with hiring goldsmiths. Custom orders should continue to be outsourced to current
contractors.

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Introduction
Webster’s Jewellers is a jewellery retail company located in Sault Ste. Marie, Ontario. Webster’s
was founded in 1923 by Wilfred A. Webster. The company currently operates two retail
locations, with one located on Queen Street and a new, state of the art facility, on Great Northern
Road. Webster’s is active in the community and sponsors a variety of programs and special
events. Webster’s is considering options for business growth.
Problem Statement: How Should Webster’s Jewellers Expand Through Marketing Initiatives
External Analysis
Threats
Jewellers are facing increased pressure from cheap jewellery. Currently the market has
demonstrated increases in sales of costume jewelry and engagement rings only. Other areas
remain stagnant or in decline (Interview, Jeweller’s Magazine). Additionally, online retailers
such as Walmart and Amazon increased their market shares as online sales of jewellery have
increased at a rate greater than in-store sales. This is a challenge because online retailers have
much greater buying power than local retailers like Webster’s. Finally, lab-created gemstones
such as cubic zirconia have gained widespread acceptance, whereas they were once stigmatized.
This newfound acceptance has decreased the market, and subsequently the price of true gems
and diamonds.
Opportunities
Webster’s does not have the capacity to create in-house custom jewellery to date. This is a major
opportunity for growth because cheap foreign jewellery has diminished perceptions, and
therefore value, of popular brands. The creation of a custom workshop is also possible now more
than ever because of a downward trend in the cost of wholesale gold and gold futures (Exhibit 1).
Finally, Sault Ste. Marie has recently welcomed a growing multicultural population. This influx
of differing ideologies to Sault Ste. Marie is an opportunity for significant growth as religious
iconography can be created in a custom workshop, as discussed above.
Internal Analysis
Strengths
Webster’s has a long history within the Sault Ste. Marie business community. They have
demonstrated ability to build strong customer relationships and have outreach programs such as
Camp Gemstone. Further, Webster’s has recently expanded to include a second retail location in

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an expanding area of Sault Ste. Marie. Development of a second retail location allows Webster’s
to cater to two distinct, different markets at different locations. Finally, all Webster’s employees
are certified gemologists. Although this came at the expense of senior employees retiring early,
the new staff are experts in the sale of gems and can develop excellent customer relationships.
Weaknesses
Currently Webster’s does not offer any option for customers to finance jewellery purchases. This
disincentivizes customers who may not be able to make a significant purchase in one payment.
Additionally, Webster’s does not currently have the ability to produce custom jewellery in-house.
This increases the price significantly due to outsourcing or contracting fees. Finally, the majority
of Webster’s advertising is focused on modalities that are difficult to control. Television
infomercials and brochures are difficult to direct to individual market segments.
Key Success Factors
Establish an Online Presence
Webster’s currently has no online presence. Webster’s target market for jewellery (Exhibit 2)
shows strong online usage. Creating an online shopping option is crucial in catering to this
segment of the market. An online presence allows for inexpensive and effective marketing.
Websites enable customers to compare prices and products with competitors, an element of
jewellery marketing lost when competitors left the downtown core. Social media will encourage
a personal relationship between customers and the business as well as drive customers to the
store.
Develop Attractive Financing
Jewellery is costly. By not offering any type of financing options Webster’s eliminates potential
customers who do not have funds immediately available. Offering financing options for these
customers expands the market by attracting customers that may be undecided due to finances.
Increase the Capacity for Custom Jewellery
Webster’s has a successful history creating custom jewellery orders for customers in Sault Ste.
Marie. Webster’s should expand this capacity through creation of a local workshop which will
decrease costs, turnaround time and accessibility. Additionally, software currently used by
Webster’s to create custom jewellery in-store can be optimized to work online as a section of the
Webster’s website, enhancing both experience and involvement.

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Feasible Alternatives
Work with an Established Goldsmith Workshop
Webster’s should explore the possibility of a strategic merger with a local competitor, Spina’s
Jewellers, to share space and goldsmithing capabilities. Webster’s currently outsources custom
orders to local goldsmiths, so partnering with Spina’s is within current priorities. This
partnership will, for Webster’s, reduce the carrying costs associated with a full-time workshop.
Simultaneously, this proposed partnership will boost Spina’s reputation as they will be associated
with Webster’s, a store with higher levels of prestige. This partnership would benefit Webster’s
as there would not be a need to invest the assets associated with establishing a workshop.
Professionally Designed Website
Website design and shop interface responsibilities could be shifted to a third-party web design
company. This would allow Webster’s to refocus their efforts on other tasks while still achieving
a comparable or better product than what could be achieved locally. While the cost to develop
and maintain the website would be higher and the time it takes to develop and deploy the website
likely longer, it would include the added benefit of technical support should problems arise in the
future.
In-Store Financing Options
Establishing private, in-house financing exposes Webster’s to additional risk by not relying on a
third-party factoring company, but it would be easier to implement, and Webster’s would be able
to generate revenue from the associated fees and interest. By controlling financing, Webster’s
could also control terms and interest rates and respond rapidly to local demand and concerns.
This could be paired with holiday sales and promotions.
Recommendations and Implementation
Short Term (1 Month to 1 Year)
Webster’s should create a website showcasing their current inventory available in store. This will
make comparative shopping easier for customers while enticing customers to visit the store in
person. To lower the costs of building the proposed website it is recommended that Webster’s
accept the offer that was extended by the company owned by Mr. Webster’s cousin to create the
website at a significant discount from market rates.
Webster’s should cultivate a social media presence as an inexpensive method of advertising,
which provides opportunities for campaigns to be geared towards high earning professionals

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(Reference 1). Targeting effective social media platforms (Exhibit 3) using social media
campaigns will drive traffic to the website. Webster’s has an established rapport with their
customers and the community, however there are other methods to further enhance and
encourage customer loyalty. Social media is one of the leading methods of promoting customer
loyalty among retailers (Exhibit 4) and Webster’s should capitalize on this.
It is suggested that Webster’s implement a layaway program to provide an affordable option for
customers who cannot afford a lump sum payment. Without a deferred payment option, a large
customer base would be ignored (Reference 2). The business would not assume any risk in
implementing a layaway program and charge a small fee for doing so (Reference 3). Webster's
should advertise the layaway program in advance of holidays. Marketing material should be sent
to prospective customers prior to major holidays such as Valentine’s Day, Mother’s Day and
Christmas.
Medium Term (1 Year to 4 Years)
Webster's should integrate shopping on their website to sell ready-to-ship and custom jewellery
(Exhibit 5). Webster's already outsources custom work to four goldsmiths and this interactive
feature would enable communication regarding vision and design between the customer and
goldsmith, with the added benefit of increased revenue.
Websters should implement a financing option for customers via a third-party financing
company. Customers prefer stores which offer financing options, and those who do tend to make
additional purchases (Exhibit 6). Financing would also shift some burden away from unearned
revenue in layaway conditions and allow Webster's to collect nearly the full amount immediately.
Applying for a private label partnership for an in-house Visa credit card would eliminate
Webster’s nominal fee (2% of sale) on purchases and create an additional revenue stream in the
form of sign-up incentives (Reference 4). Since private label cards place the burden of receiving
the finances on the factoring company, Webster's collects revenue immediately and reduces
exposure to risk. Workers should be trained to run a basic credit check using point of sale
software to make a same day sale.
Long Term (4 Years +)
Webster’s should create an in-house workshop at one of the existing two locations to customize
jewellery, which will increase traffic for both custom and in-house purchases. Although this will
require the acquisition of specialized machinery and recruitment of two goldsmiths, it will also

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reduce production time and cost, allowing Webster’s to compete with similar retailers that
provide customization options. Adding a competitive edge, this will make Webster’s the second
local jeweller to offer this service, which has been shown to be beneficial (Reference 5).
Control and Feedback
The primary feedback measure will be through revenue. Webster’s should continually monitor
revenues from custom jewellery and online sales to determine profitability. Webster’s should also
compare market shares to similar stores to evaluate how they are progressing in the custom
jewellery market.
Contingency Plan
If the custom jewellery service is not sufficiently profitable, the proposed custom jewellery
workshop should be cancelled, and work should continue with currently contracted external
goldsmiths. This will allow customers to continue buying custom jewellery from Webster’s,
while simultaneously decreasing the carrying costs associated with a workshop.
Conclusion
In conclusion, Webster’s Jewellers should create a website where interested customers can
purchase ready-to-wear and customizable jewellery. Webster’s should also develop a social
media presence to maintain customer relationships, establish a layaway program and other
financing options. Finally, Webster’s should develop a workshop to create custom jewellery. The
business should measure profit accumulated from custom orders to determine if it is profitable. If
it is not a profitable venture, Webster’s should not continue with the plan to acquire an in-house
workshop.
The plan described was developed given a thorough analysis of the global jewellery market and
data provided by Webster’s Jewellers. The data shows that Webster’s most frequent customers
were affluent men between 20 and 55 years of age. The global jewellery market trends show that
given the local demographics, Webster’s should focus on custom jewellery orders and online
sales.

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References
Reference 1
Targeting the Largest Consumer Jewelry Market Segments. (2010, October 7). Retrieved from
https://www.rough-polished.com/en/expertise/40526.html?print=Y
Reference 2
Filak, D. (2016, June 29). Why offering more payment options should be a priority for retailers.
Retrieved from https://www.retailcustomerexperience.com/blogs/why-offering-more-
payment-options-should-be-a-priority-for-retailers/
Reference 3
Layaway - Overview, History, Benefits and Downsides. (n.d.). Retrieved from
https://corporatefinanceinstitute.com/resources/knowledge/other/layaway/
Reference 4
Private-label credit cards. (n.d.). Retrieved from https://www.desjardins.com/ca/personal/loans-
credit/private-label-cards/index.jsp
Reference 5
Dalke, G. (2020, Feb. 27) Phone Interview, State of the Jewellery Industry Year 2016

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Exhibit 1
Price of Gold 2010 to Present

Gold Commodity Price (Futures) from 2016:

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Exhibit 2

Source:
Provided course materials.

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Exhibit 3

Source:

https://www-statista-com.ezproxy.algomau.ca/statistics/541155/consumer-traffic-generated-
social-networks-canada/

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Exhibit 4

Source:

https://www.statista.com/statistics/434149/leading-methods-of-promoting-customer-loyalty-
among-retailers/

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Exhibit 5
Example of website API similar to what is used by Webster’s Jewellers to design custom orders.

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Exhibit 6

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