Even in a Pandemic, Americans Love their Jewellery-Jewellery Retail Market – U.S.

Americans are spending their pent-up savings on things that make them happy, and jewellery is a key ingredient of their happiness. Vijetha Rangabashyam speaks with medium-to-high-end jewellery retailers in the U.S. to understand the current consumer mindset, how they are overcoming challenges, their immediate concerns, sales strategies, going forward, and more
Even in a Pandemic, Americans Love their Jewellery-Jewellery Retail Market – U.S.

An emerging trend is much of the working population in the U.S. saying it wants to work from home permanently, or in a more flexible hybrid model. This could become a tailwind for “Zoomworthy jewelry” — an area where we’ve made significant progress. And of course, Connected Commerce, as we call it, is here to stay – people love the integration of online and in-store, and the conveniences of buyonline- pick up-instore. They also enjoy curbside pick-ups and innovations such as virtual try-ons and asynchronous chatting David Bouffard, Vice President, Corporate Affairs, Signet Jewelers‘Quarantine Fatigue’ is a real thing. After what seemed like possibly a never-ending lockdown, people are craving real human connection. While the likes of Zoom really saved the day when the world came to a grinding halt, people the world-over are appreciating the privilege of stepping out without having to worry. As cases in the U.S. have started seeing a steady decline and the lockdown has started to ease, restaurants are bustling, and the busy streets of America are back to being busy, with people living it up like there’s no tomorrow. The sentiment to splurge and buy things to feel better is alive and heightened. Jewellery is a symbol of hope and aspiration, and added to that, it has the perceived value of something that is precious. It is not a surprise why America is one of the biggest drivers of demand when it comes to jewellery, amidst other sectors of luxury items. The overall demand for goods and services, is exceptionally high and retail sales are a good 20 per cent higher in June, compared to 2019.

The American Consumer Mindset, Post-Pandemic
According to a report by McKinsey, more than 50per cent of U.S. consumers expect to spend extra by splurging or treating themselves, with higher-income millennials intending to spend the most. Says David Bouffard, Vice President, Signet Jewelers, “Our research indicates that consumers are excited to go shopping. They want to return to the mall and other brick and mortar locations, and start meeting new people and dating again.” The gradual return of normalcy is already showing results in the sales of companies. Take the case of Signet. In the First Quarter of the current financial year, its total sales were $1.7 billion, up 98.2per cent year-over-year, in the 13 weeks ended May 1, 2021, on a reported basis, and up 96.4per cent on a constant currency basis. The total same-store sales increased 106.5per cent year-over-year. E-commerce sales stood at $346.3 million, up 110.3per cent from the prior year. Brick-and-mortar samestore sales increased 105.7per cent year-over-year. Bouffard also notes that people are continuing to spend more on those closest to them. “This works to our advantage because fine jewellery is an iconic gift that people are willing to spend more for when they want to celebrate those they love, which we saw during Valentine’s Day and Mother’s Day,” he adds.

Classic diamond stud earrings were the winner last holiday season and watch collectors have grown in their enthusiasm. People don’t want to wait to celebrate, they want to start enjoying today! Lisa Bridge, President & CEO, Ben Bridge JewelerAnother emerging trend is much of the working population in the U.S. says it wants to work from home permanently, or in a more flexible hybrid model. This could become a tailwind for “Zoomworthy jewellery” — an area where Signet has made significant progress. “Connected Commerce, as we call it, is here to stay – people love the integration of online and in-store, and the conveniences of ‘buy-online-pickup’ in store. They also enjoy curbside pick-ups and innovations such as virtual try-ons and asynchronous chatting,” says Bouffard.

The jewellery segment has been fairly late in embracing technology, even in the U.S. Traditional jewellery retailers, including the mom-and-pop stores, are aggressively engaging in digitisation and not having an online presence is not an option anymore. However, this does not mean fully pivoting to onlineonly retail, but having the online option to complement the physical stores. Retailers are capitalising on engaging with consumers online to bring them to their physical stores. “Once cities opened up, people wanted to get out and get away from their computers. Jewellers are really just in the infancy of e-commerce; we are all paying more attention to it now. But if you watch the headlines, even strong e-commerce brands are now looking at brick and mortar, starting flagship retail outlets, or setting up pop-up shops. Basically, retailers are all expanding to a broader omni-channel approach to reach their customers everywhere and in every way that they like to shop,” says Richard Eiseman, President & CEO of Dallasbased Eiseman Jewels.

Overcoming Challenges
According to diamond industry analyst and researcher Edahn Golan, jewellers in the U.S. lost $4.76 billion in business between March and May, during the lockdown in 2020. Much like India, the jewellery retail landscape in the U.S. is an amalgamation of behemoths like Signet Jewelers, which own Kay Jewelers, Jared, Zales, Jamesallen.com and so forth, and family-owned independent jewellers. Business owners across the spectrum suffered and continue to endure the pandemic-induced challenges. “The pandemic certainly presented challenges but our Path to Brilliance growth strategy, which we started two years prior to the pandemic, positioned us well to accelerate our plans to offer customers new ways to shop with us. Now, with the next phase of our growth plan, Inspiring Brilliance, we’re focused on our growing connected commerce approach — integrating our physical stores into the digital customer experience — with datadriven in-store consultations, buyonline- pickup-in--store, and curbside pick-up, and increasingly seamless interaction across our websites, stores and inventory pipeline,” adds Bouffard. This Anytime, Anywhere approach now enables customers to download Signet’s mobile apps in order to shop, virtually try-on products, upload photos, visually search for similar products, chat with an agent, leave and pick up the conversation later, and schedule both virtual and in-person consultations at any point in the shopping journey.

Buying beautiful and well-designed items at the right price, giving extraordinary service to customers and helping them in their purchase journey, be it online, via email, phone or text, and believing in all the wonderful diamonds, jewelry, timepieces and gifts we offer to the public – that is what is important. The execution of this strategy, the people we employ, the education and training needed, and the culture in our stores -- all need to be aligned to make this happen John Green, President & CEO of Lux Bond & GreenAs the lockdown forced jewellers to keep their stores shut, many of them embraced creative strategies to continue engaging with their customers and keep their businesses afloat. “The temporary closure of our stores last year was an unprecedented moment, the social unrest and the impact on our stores and teams was huge. Add to it the constantly changing situation, and changing regulations, and it ended up being a lot. But this time has provided an incredible amount of clarity of purpose and focus. It allowed us to zero in on who we really are and where we are headed. We used the time to accelerate our plans and pause on the things that weren’t as meaningful,” says Seattle-based Lisa Bridge, President & CEO of Ben Bridge Jeweler. Seattle was one of the worst hit cities in the U.S. and the pandemic posed incredible challenges for Ben Bridge, considering they have over 70 stores and many employees to take care of. Ben Bridge is a subsidiary of Berkshire Hathaway, but still very much managed by the family. Fortunately for the company, having being in the industry for almost 100 years helped, and enabled it to look at the challenges in a good light.

Last year alone, the number of business owners in the U.S. decreased by 3.3 million, about 22 per cent. This is the biggest decline on record. Stores owned by minority and marginalized communities were affected even more. Black-owned enterprises experienced a 41 per cent drop in trade, Latino-owned businesses saw a 32 per cent decline, and Asian-owned businesses saw a 26 per cent decrease – as per the findings of National Bureau of Economic Research (NBER).

“The supply chain is stressed. Planning has necessitated the close scrutiny of how we reorder items that we want to have in stock, how we communicate with our team and customers, as well as who we do business with to get what we need,” says Connecticut-based John Green, President & CEO of Lux Bond & Green, which has six stores in the east coast, and is one of the oldest family-owned jewellers in the U.S. In spite of the problems posed by the pandemic, Lux Bond & Green emerged even stronger from the crisis, thanks to its strong community appeal and the one-to-one connect it has with its customers. At present, Green is also concerned about the inflationary pressures on diamonds and precious metals, and the impact it has on the labour, as well as the staff. Things have been particularly difficult for small stores, as they don’t have the economies of scale. Lay-offs have been rampant and store closures have become a normal occurrence. Many companies have vanished into thin air because they didn’t build their companies with the future in mind – long story short, the pandemic hit those who were already weak the most. “Stores that have a good balance in their business - diamonds, estate, watches and designer brands - fared the best. If or when one category lags, another will pick up and pull you through,” adds Eiseman.

Government Aid Bolstered Hope, But…
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed April last year, providing $2 trillion in aid. The provisions allowed retailers to retain employees and iron out costs and also granted loans to small business owners – this helped the industry ride through tough times. In March 2021, President Joe Biden made amendments to the Paycheck Protection Program (PPP) as his administration focused on improving the condition of small businesses. The amended program helped jewellers with fewer employees as well as those who were self-employed. “The PPP was greatly appreciated by us as our team is our family, and it gave us the ability to support them through this crisis,” says Green.

government support has been a mixed bag for our industry. Many retailers were able to keep their staff together and ride the storm with the PPP money. But at the same time, the government subsidies seemed very high in relation to some income levels, creating a workforce shortage. We are currently seeking to hire and are having trouble finding great candidates. Unemployment income, combined with the stimulus payments, exceeded some people’s existing income levels. This might have taken a little of the work ethic out of the marketplace Richard Eiseman, President & CEO, Eiseman JewelsThe National Retail Federation noted in April this year that consumers are spending their stimulus money they received from the government on shopping. While this is good news, it has a flip side. “Many retailers were able to keep their staff together and ride the storm with the PPP money. But at the same time, the government subsidies seemed very high in relation to some income levels, creating a workforce shortage. We are currently seeking to hire and are having trouble finding great candidates. Unemployment income, combined with the stimulus payments, exceeded some people’s existing income levels. This might have taken a little of the work ethic out of the marketplace,” reveals Eiseman.

Smart Inventory Management

The pandemic has also changed the way retailers look at inventory. Stores are stocking on items that are moving fast, and businesses are noting some changes in customer preferences. “Classic diamond stud earrings were the winner last holiday season and watch collectors have grown in their enthusiasm. People don’t want to wait to celebrate, they want to start enjoying today!” says Bridge. Working with its trusted vendors, Signet has kept a productive level of newness within its portfolio. It is bringing merchandise across categories and across price points that resonates with customers. “Bridal is benefitting from couples who are getting engaged. In fashion, we continue to see strong performance in gold, which we attribute to our ability to strengthen our core assortment, based on the insights of our data analytics. In addition, our consumer insights reveal that men’s fashion is trending. We built in additional assortment ahead of this quarter and customers are responding,” adds Bouffard.

For Lux Bond & Green, platinum, yellow gold and diamonds are winners right now and stores are witnessing a decent growth in all these categories. People are buying finer and more important pieces, as opposed to items that fall in the category of short-lived trends. “If they are buying a lower price point piece, it will be something they can add to the pieces they already have. An example would be someone buying a Messika bracelet to wear with the Cartier or Van Cleef piece they already have. If they are buying emeralds, they want a really fine quality, deepgreen stone. An investment piece and a generational piece, is what they are going for. In the watch category, we are seeing more refined styles, not quite as big, but with more complications and more generational pieces,” says Eiseman.

Stocking up on the right kind of inventory requires more than looking at reports, believes Green. “It is talking with our managers and sales professionals to get their feedback. For every sale and customer interaction, there needs to be an understanding of what we need to have next in our inventory, keeping in mind the fastoccurring consumer evolution,” adds Green. According to Eiseman, “It is critical to work closely with designer brands on aged inventory in a way that can be a win-win for both. The key is not inventorying consigned goods that compete with your owned goods. Also, I suggest paring down the number of relationships with designers/brands so that you can be more important to fewer. In that case, you can call upon them to substitute your inventory in challenging times.”

Strategies to Stay Strong
For most jewellers, buying relevant and well-designed pieces at the right price seems to be the way forward. “Buying beautiful and well-designed items at the right price, giving extraordinary service to customers and helping them in their purchase journey, be it online, via email, phone or text, and believing in all the wonderful diamonds, jewellery, timepieces and gifts we offer to public - that is what is important. The execution of this strategy, the people we employ, the education and training needed, and the culture in our stores -- all need to be aligned to make this happen,” says Green. For Ben Bridge it is about maintaining the strong connect with consumers. “We are going to continue to connect meaningfully with our customers and find new ways to keep in touch and provide memorable experiences,” declares Bridge. Eiseman expects in-store events will fall short, whereas one-on-one or small group experiences with added value will better serve his stores. “We all learned during COVID that life is about moments (as opposed to large gatherings with people you don’t know). Basically, less is more. We plan to keep creating unique and meaningful smallscale experiences for our customers and helping them really celebrate life’s many fabulous occasions and milestones,” he adds.


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