1791 Diamonds, which has already exported millions of dollars worth of its designer engagement rings to Europe, USA and Asia, has opted to crowdfund its next export drive into the northern hemisphere.
Richard Prout, MD of 1791 Diamonds, says the online retailer has developed a sophisticated digital marketing strategy to allow it to compete with big US players.
Prout says the company’s custom-built advertising system can reach specific demographics and geographically it can reach down to the suburb level and time of day if required. This allows buyers who are far from home to securely purchase a designer engagement ring with confidence. He adds their custom designed rings sell for a premium in these markets with individual sales reaching as high as $150,000 each.
Prout, a British born tech entrepreneur who has experience building high scale and high growth ventures to serve millions of users, has developed the mathematically-based advertising models.
“We get extremely consistent returns over a wide demographic, from people who are remotely located due to work as well as CBD workers who range in age from 20 to 35,” he says.
Prout says the seven-year-old-company aims to raise $750,000 to $2 million for 14 to 30 per cent equity throughout July. He says the capital raised will be used to increase the digital marketing budget and offshore personnel expansion as the company moves further into the US and UK markets.
Prout says increasing export revenue will help to raise gross profit beyond the current 36 per cent.
“We have refined our advertising strategy to the point that for every dollar we spend through AdWords in the UK we get back another five dollars in sales revenue within six weeks. The northern hemisphere market is critical in our expansion plans as it allows us to sell through two engagement seasons,” he says.
Prout says the company has positioned staff in the UK and US export markets to maintain local customer service.
“Our e-commerce infrastructure and marketing strategy has been developed, tested and proven successfully over several years; we’re now well positioned for further global expansion,” Prout points out.
1791Diamonds.com crowdfunding round launched on the Snowball platform on July 6 and finishes on August 9.
Prout says one the biggest challenges of getting the business to this point was starting in the middle of the global financial crisis.
“When we launched in 2008 consumer confidence and expenditure on luxury items was at a low. At the same time this forced us to up our game significantly – we’re on a better growth platform today because of it.”
He says consumers have “got over” their fear of e-commerce and even high ticket items are being purchased in increasing volumes, with the online jewellery market growing at 25 per cent a year.
“While it began with necessity, with workers stationed remotely relying on the online channel to provide a selection, it has evolved to the point that we can now offer a superior level of service than bricks and mortar retailers. We have a range of online tools that allow us to interact with our customers and custom design engagement rings for them wherever they are in the world,” Prout explains.
Prout says crowdfunding was the logical move to secure expansion capital.
“In NZ there is a lack of venture capital for companies in the $1 to $10 million range. Crowdfunding has filled a gap for some of our most innovative tech companies,” concludes Prout.