Warehouse Security to Package Delivery: Securing Your Jewelry eCommerce Operation
Continuing our series on the unique requirements for selling jewelry and accessories online, this blog looks at how to properly secure your jewelry eCommerce operation. The importance of security in providing positive customer experiences that are reflective of your brand’s premier reputation cannot be overstated. Discover the key considerations to keep in mind across your operation, from warehouse security to package delivery.
The global online jewelry market is growing at a rapid rate and is projected to reach $117B by 2027, an increase of 117% from 2020. Despite a struggling economy, the luxury sector, and particularly fine and semi-fine jewelry, continues to thrive. Jewelry brands are taking notice, embracing new trends such as lab-grown diamonds and bespoke customer-designed pieces in hopes of capturing their share of the high-end market. A highly optimistic industry outlook even has the leading luxury jewelers from Bulgari to Cartier to Tiffany & Co. scrambling to ramp up production in an effort to stay on track with growing demand.
Previously, these high-value products were largely restricted to the brick-and-mortar space, and for good reason. Securing such inventory in the digital realm can seem like a massive, costly undertaking. From expensive infrastructure requirements to highly customized fraud review processes, all the way through to package delivery considerations, there is significant planning and upfront cost involved in setting these operations up properly.
Hardening your jewelry eCommerce operation
With this in mind, we’re taking a look behind the scenes to uncover the top security considerations for selling jewelry and accessories online, as well as providing some suggestions from the industry experts at PFS on how to accomplish these objectives with efficiency and cost-effectiveness.
The value of your product will determine the level of security required throughout the eCommerce fulfillment center. This includes getting into the facility, product placement within the facility, pick area layout, and more. At PFS, for example, our facilities housing high-end jewelry and accessories brands with collections that include fine and semi-fine products have multiple layers of security before you ever reach the actual product.
The outer layer of warehouse security is hardened by monitored cameras, security guards, badge-scan entry, and metal detection. This is reinforced by additional entry barriers to a dedicated brand area within the facility for some clients. For instance, PFS employees are required to “bio” into the enclosed area for one client, scanning their fingerprint to ensure access is limited to those who are assigned to the brand and have passed the required background checks.
Caged areas are often utilized to provide additional security for high-end brands. Within these caged areas, all activities to process online orders are completed. Picking, packing, quality assurance and any value-added services you offer such as product engraving are conducted within the restricted access cage. These areas offer additional protection when the facility is closed. Vaults and large safes can also be set up within the caged area. Again, it’s all about layering one security element after another.
Fraud prevention and chargeback management
Security must run through the entire ecommerce program. Fine and semi-fine jewelry collections are typically made up of fencible products, meaning there is a secondary market that brands must secure their operation from. It is critical that you can ensure that the consumer placing the order is the owner of the consumer credit card being used to place the order. However, this must be done in a manner that causes no disruption to the experience your legitimate customers receive. A positive customer experience is central to an effective fraud program.
Today’s fraud management tools offer technology and data analysis capabilities that enable fraud prevention that is invisible to your customers. At PFS, our fraud solutions are highly customized to each brand’s unique business parameters and customer profiles. After developing a custom strategy based on a combination of historical data and industry knowledge, we then assess the credibility of each purchase in near-real time, leveraging powerful fraud tools to avoid any interruption to a positive customer experience. With the results to prove it, our fraud prevention team makes fraud calls via an API at checkout to keep your “good” orders flowing and stop fraud.
Chargeback management and the ability to effectively identify and dispute fraudulent chargebacks can save you a significant amount money lost to fraudulent claims. A chargeback occurs when a customer disputes a charge to their credit card. The trick here, again, is to develop a program that does not cause disruption to a “good customer” experience. Taking into account everything from product type to customer demographics, PFS’ chargeback management team defines and executes effective chargeback strategies that work. With a win-rate of 30% for fraudulent and 67% for non-fraudulent chargebacks, we reduce the impact of chargebacks on your bottom-line and produce results well above industry standards (industry averages are 18% and 40%, respectively).
The task of securing your jewelry eCommerce operations does not end when the product leaves your secure warehouse. Porch piracy is continuously on the rise, with 1 in 7 US consumers claiming to have had a package stolen in 2022.
To protect your high-end product shipments, brands and retailers must build a freight program that is appropriate for the value of the products being shipped. This includes setting up an appropriate amount of insurance coverage to cover the full value of each shipment. Many carrier contracts will include coverage that is built into your shipping rates, but this should be confirmed, and, of course, additional coverage should be applied to any orders containing products from your fine-jewelry collection. PFS’ transportation services manage carrier relationships for brands, taking all these considerations into account while ensuring optimal speed and minimal cost for each delivery.
Requiring a signature upon delivery for orders that exceed a certain amount mitigates the risk of theft compared to packages that are simply left on the porch. However, this has potential to negatively impact the customer experience. Consumers have grown accustomed to the ease and convenience of packages being dropped off at their doorstep, whether they are home or not. “Masking” your shipments can be an effective means of concealing the value of the product within. The branded unboxing experience is extremely valuable in creating positive customer experiences that build loyalty. However, you should consider keeping the branded materials (i.e., branded tissue paper, tape, ribbon, marketing inserts, etc.) inside the box, and keep the outside plain so as not to attract unwanted attention.
Educating consumers on the things they can do could also help address this problem long term. Delivery lockboxes, shipping packages to a delivery locker location, and utilizing doorbell cameras are just some of the ways customers can help enhance security for their online orders.
Security + Scalability – A winning combination
Your eCommerce operation must be secure, but not cumbersome. Within the warehouse, employees must still be able to pick, pack and ship orders in an efficient and reliable manner that holds up when sudden spikes in demand occur, whether planned or unplanned. Likewise, your fraud review process must be equipped to scale in real-time when order volume increases with seasonal and promotional spikes. And your carrier partnerships should maintain the level of quality and secure practices on your busiest day of the year as they do on your slowest.
Key to PFS’ success as a 3PL provider is our ability to secure operations without impeding scalability. Core to every client solution we set up within our facilities is the requirement that the layout provide optimal operational flow when demand spikes. We are committed to designing our entire operation in a manner that facilitates high volume fulfillment year-round.
There is a significant amount of cost involved in setting up warehouse security as well as systems security. PFS lessens the burden of capex on your brand through our established infrastructure and systems, while delivering additional peace of mind and confidence in the knowledge that you operation can effectively scale at any time. PFS takes on the investment of infrastructure costs to harden the facility and provides the systems and technology required to protect your data as well as that of your customers, ensuring a winning balance between security and operational scalability.
Looking for more ways to improve your jewelry and accessories eCommerce operations? See our last blog for creative ideas for jewelry packaging and check back next week for the final blog on inventory management considerations for jewelry eCommerce.