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The New Digital Revolution In Retail | January 20, 2021 (0 comments)
Merrick, NY—First there was the dot-com explosion, far ahead of its time in the jewelry industry. (Remember Enjewel? Fueled by some of the industry’s heaviest of heavyweights, it was supposed to revolutionize the industry online. It fizzled in less than a year.)
Social media came next. Jewelers latched onto it for conversing with customers, especially at lower cost than traditional media. Slowly, painstakingly, the industry trudged into digital. Until last March, when the coronavirus pandemic catapulted it into the next digital revolution in retail.
What does this revolution mean? How do jewelers adjust? And where do we go from here?
Speaking during the first 2021 installment of CIBJO’s Jewellery Industry Voices webinar series, “Preparing For The Post-Pandemic Consumer,” Anita Balchandani, a partner for the consulting firm McKinsey & Co., said the pandemic has proven that consumers are willing to shop for very high price points in digital environment. And jeweler Andrew Siegel, the fourth-generation chief operating officer of Hamilton Jewelers with stores in New Jersey and Florida, saw the instant digital shift play out in very real time in his family’s stores.
Related: Prepare To Sell To The Post-Pandemic Jewelry Consumer
The discussion, sponsored by the Natural Diamond Council, also featured journalist Melanie Grant, luxury editor of 1843 Magazine, a sister publication to The Economist; and Charles Bonas, head of the Bonas Group, an auction tender house for diamond and emerald miners. He is also founder and chair of Holition, a company that develops digital experiences for luxury companies. CIBJO’s Edward Johnson moderated. (Read the first installment of the series here.)
In this conclusion, we explore the future of digital jewelry retailing, and other key considerations for selling jewelry to the post-pandemic consumer.
Edward Johnson: Anita, in July you coauthored a report on digital retail. Guide us to the digital jewelry industry?
Anita Balchandani:There used to be a view that you had your physical store and your website and they were siloed. One of the outcomes of the pandemic is that the boundaries between them no longer exist. As consumers, we think of brands, we don’t think of sites. Digital is no longer seen as standalone thing, but has become absolutely integrated into the shopping experience. Personal shopping is powered by colleagues in store, but delivered through digital media, whether through Zoom calls, or digital apps, et cetera, and the role of the store is fulfilling product. Digital is an enabler, not a competitor!
Andrew Siegel: As a real-world example, you hear about the [customer] relationship being owned by the associate. At Hamilton, when our website was getting traction a few years ago, we added a chat function, but things got lost in the sauce. We made a conscious decision that when you chat with us online, you chat with a real person who knows our product. If needed, they pass along the relationship to someone in the stores. If you don’t have personal shoppers, that can make things really tough online.
All our digital investments in the pandemic follow that trend. We think of digital investment that will merge physical and digital. It’s all about meeting the customer where and how they want to shop.
Johnson: Charles, what does digital transformation mean for you?
Charles Bonas: I agree completely. It’s phygital.A two-dimensional website is boring. You see five or six images of a product and it’s not enough. The next thing is to create an environment like a store, where customers can interact, play games, look in a mirror, and so on. Holition, my other company, is doing a lot of work in the beauty space, where you can go from one room to another, see things, and interact. People can look at product but also be entertained. That’s very sticky.
Melanie Grant: On the social and digital side, it’s engagement rather than traffic. People get really obsessed with traffic [numbers] and ‘likes,’ but engagement is sticky. It’s better to have 12 people engaged than 1200 flipping around your site.
Johnson: Melanie, you’re great proponent of social media. Why is it important for jewelers going forward?
Grant: Instagram is a gift to jewelry. You have to get on it! Today, this second, it’s more important than having a store. Younger customers are on TikTok and others. You don’t have to do much, but you have to be there. Everyone is focused on e-commerce, but that’s the end result [of your digital presence]. 80% of people who do buy have been involved with your brand before. Often I post a piece and say it’s from this brand or this designer, and at least five people ask ‘where can I buy this?’, and so often the brand doesn’t respond! You need someone from your brand interacting with the customer all the time. You can’t just post and go home! I found a lot of brands big and small drop the ball on this. You have to have a seamless online/offline experience. You can’t have one be rubbish.
Siegel: For your team, it’s their Rolodex! References from those customers go to other customers, and how you walk them through whole process—be it online or otherwise—if you can’t do the whole journey and experience, and you drop them along the way, you have a problem.
Johnson: Melanie, you mentioned TikTok. How luxurious is TikTok? Is it good for high jewelry?
Grant: I interviewed CEOs five years ago who said you’ll never sell jewelry over a million [dollars] online. A year later, it’s different. Whatever it is now, it will change. TikTok is fun. Beautiful is collectible, but jewelry is not as serious to everyone. You can’t underestimate how important fun is!
Johnson: Now let’s talk about jewelry’s responsibility to society. Anita, McKinsey’s report said consumers are aware of vulnerable employees in the supply chain, but the industry says consumers are not asking.
Balchandani: One of things we tried to do in the report is look ahead, not back. Sustainability is one of those topics where there’s a lot of change. Luxury should be looking ahead and anticipating, not waiting for it to happen. There’s a greater level of activism and awareness, especially with younger consumers, and a willingness to vote with their feet.
With activism and worker rights, we believe we are at a tipping point, and it’s dangerous to take the point of view of waiting till the consumer asks, because it will happen quickly.
Grant: Even if consumers are not asking, they make decisions based on it. They might not vocalize it, but if you don’t understand it you will have problems down line.
Balchandani: Purchase decisions are taking place out of the store. They’re being researched. It’s only going to become bigger.
Bonas: All nine miners [we work with] are very involved in their local communities through training, outreach, education, environment, paying taxes, et cetera. As an industry, we’ve done a very bad job about telling people about it. Only in the past few years have we started talking about it. De Beers and David Kellie at the NDC are making it much clearer and transparent to the world.
The reality is that no matter how much we tell about the mines doing good in their own community, [jewelers] in the midstream are not asking questions or very involved. Andrew notwithstanding, most retailers are not that interested in it. Then they think consumers are not asking. We have a great story to tell about the industry as a whole. We are doing great things around world.
Johnson: The last section of the supply chain is the 18 inches over the counter. Andrew plays a critical role in supporting [sustainability], but what role should retailers play in furthering social justice?
Siegel: It’s so important and everything you said today is true. People coming into store, especially first time bridal customers, may never have even heard of ‘a diamond is forever.’ That movie Blood Diamond is a while ago, so we have blank canvas for everyone younger coming into the store. We have an opportunity for education and to practice what we preach. We can talk about it all we want and how we give back to the mining community, but it’s also about what we do on the hyperlocal level. Customers want to know who they’re shopping with, and support someone who supports their values.
But not only must we educate, we also have to walk the walk. Consumers know if an organization is talking out of both sides of their mouth. If we buy diamonds from an unknown source, or we let our people go in the pandemic, people know that.
Johnson: People, planet, profit is the triple bottom line.