Change is coming fast: Faberge Asks Rich to Surf Web for $7 Million Brooches

I love the safe is risky and risky is safe mantra .. the more I look the more I find it true.

Today I learned that Blockbuster is closing 40% of its stores in the US. Why?  Because they stuck to safe ... they carried on their traditional retail based business model while Netflix was busy changing the game.  Netflix did risky ... Blockbuster did safe.

Here is another example.  Faberge

Faberge just launched their new website - from which they plan to sell their ultra high end jewllery. US$7m brooches included. 

You cant actually access their site directly, you have to register and give your name and phone number and a Faberge representative will call you back - which they did while I was typing this post.  Kiril (who is from the Ukrian) called & was super polite; he told me what my username and password would be.

Now I can browse the collection - if I have questions Kiril will call me back at the click of a mouse.  If I am really interested in a piece then they will bring it to me to view.

I love the innovation of the business model.  Faberge CEO Mark Dunhill had these very perceptive things to say ..

"Ad campaigns,. shops and inventory increase the risk. They increase the time it will take for that business to become profitable. We’re not in a position where we need to have a scattergun approach to drive either volumes or traffic to our Web site, or to sell vast quantities of inventory.”

“Could you give me a blank check please?” Dunhill said rhetorically of the traditional approach to building a luxury brand. “Hang around for 10 years while I build a network of flagship stores, fill those stores with very expensive inventory? Then we will sit back and wait and cross our fingers and hopefully we will be making money.”

“I could have done that,” he said. “I’m not sure I would have been successful.”

While some may think that selling upscale jewllery from a website is risky ... I think he has made a wise and safe bet .. as he says ... to do the traditional thing and open stores, stock with inventory and do expensive advertising (the safe, tried and tested route) would have been a much higher risk.

Comments

[Shasa]

Thanks for the article, very helpful.