Sales Strategy
Jewelry Sales: What’s Working Online And In Stores | December 15, 2021 (0 comments)
New York, NY—As consumers surged online during the pandemic, it has permanently changed some shopping habits. Retail consultancy McKinsey lists it as one of the six seismic shifts coming in the luxury jewelry and watch sector.
In a podcast, Alexander Thiel and Tyler Harris, two of the authors of McKinsey’s report discuss what’s working well in jewelry and watch e-commerce and in stores. Monica Toriello moderates. Key points of the conversation are excerpted below; click here to listen to the full podcast.
Monica Toriello: What’s working in e-commerce? What are jewelry or watch companies doing online that works really well?
Alexander Thiel: For watches, realizing there is a certain group of customers whose existence the industry denied for a long time: consumers who are willing—and actually prefer—to buy a $5,000 or $10,000 or even $20,000 watch completely online. Giving them this opportunity in a seamless, easy, direct way and offering opportunities for customization as much as possible is a formula that is working.
Another thing working is preowned watches. That started to boom the moment the platforms in that space professionalized the market, [creating] enough consensus and trust that you are actually buying a Rolex and not something that someone put together in their basement. Watch brands have to make the preowned market work for them, because in the near future we think the majority of transactions in the watch space will be preowned transactions. For brands not to participate in this market would mean not participating in a significant part of the value creation.
Tyler Harris: In 2019, only about 13% of jewelry purchases were online—quite small compared with other categories. There are a few things that excite me about digital prospects for fine jewelry. The first is building consumer trust. Fine jewelry is a very heavily researched category. And diamonds and gemstones are pretty tough to understand. One of the beauties of digital for this category is the ability to capture trust from a consumer in their research process.
For brands, a byproduct of consumers doing research online is that [they’re] clicking on a lot of different designs and links, so you have a lot more opportunities to gather information on what they’re interested in and what they’re not interested in. You have more of a history from a consumer’s digital shopping than you do if someone walks in a store and walks right back out.
A second exciting thing is virtual try-on. It’s still largely in test mode but we have seen instances where if someone has virtually tried on two or three pairs of earrings, they are twice as likely to make a purchase than someone who hasn’t done any virtual try-on.
A third exciting thing is online marketplaces. About 20% of fine-jewelry purchases are from big brands; the other 80% of the market is unbranded. [Marketplaces give] you the ability to connect your small jewelry shop to consumers across the country and across the globe, and scale in a [powerful] way that is cost-efficient and drives revenue.
Related: Consumer Demand Driving Important Conversations About Sustainability
Monica Toriello: What about in stores? Are there cool things that companies are doing to make the in-store experience even more magical?
Alexander Thiel: Whether you’re a jewelry or watch brand, you need to invest in a very specific positioning: something authentic, something you stand for, something that a consumer really believes are your values and that she or he can identify with. When it comes to stores—the place where the consumer is closest to the brand and can really experience the brand—it is really important to make your positioning visible. You can’t just have your products nicely displayed; you need to bring out what you stand for as a brand.
Tyler Harris: [Think] about other touchpoints to bring consumers into the stores, apart from the first big purchase. For instance, watches and jewelry need to be repaired. So use that moment to create more magic, show more pieces, welcome [customers] back into the brand, and remind them of what the brand stands for. That creates a loop of loyalty, so that when customers are going to make their next big purchase, they’ve already established a habit of regularly coming into the stores. The hurdle is much lower.
Monica Toriello: If you could gather all the jewelry and watch CEOs in one room and give them one message, what would that be?
Tyler Harris: We are in a once-in-a-lifetime moment of change, from consumer behaviors to new entrants in the market to technology and new materials. Now is the time to throw out the rulebook that has guided the industry for years and try the new thing, whether that’s starting a new sub-brand or hitting the gas on sustainability and diversity. Given how quickly the consumer is moving, this is a moment when we can rewrite the rulebook.
Listen to the complete McKinsey podcast here.