As 2021 began, Covid-19 cases rose and a violent, failed coup attempt in Washington, DC, rocked the nation. Yet despite the instability, digitally focused retailers were thriving. The pause on travel during the pandemic meant wealthy customers were treating themselves to jewelry instead of trips, with earrings becoming especially popular — possibly due to their visibility during Zoom meetings. Engagement-jewelry spending was also strong, since couples had stopped holding large catered ceremonies. Covid-19’s lasting economic impact on online stores may be the one small upside to an otherwise punishing period.
Digital brand building
For digitally savvy brands, 2020 was good despite its challenges.
“We saw great growth in bridal and gifting, in part because we aligned ourselves with causes such as No Kid Hungry, children’s hospitals, and the NAACP [National Association for the Advancement of Colored People],” said Mona Akhavi, CEO of online jeweler Vrai, which lab-grown producer Diamond Foundry acquired in 2016. Vrai’s activism resonated with customers. “Consumers in the diamond business care about price,” she said. “But we learned in 2020 that brand values became front and center. That was really eye-opening. And we saw a lot of new customers who had been apprehensive about lab-grown diamonds, and who changed their minds.”
In Texas, Matt O’Desky — owner of The Diamond Room, which has private showrooms in Austin and Dallas — said he’d been reluctant to add e-commerce to his website. But the pandemic changed everything. “Covid-19 forced us to adapt,” he explained. “[Being online] gives us more flexibility, and people are able to see things and buy things from the website now.”
His customers still come in for private showroom appointments, but his new online presence has expanded his reach. “Amazon is the biggest company in the world, yet only 15% of [shopping] happens online. It just tells me how much potential is out there. Covid-19 has really given us a growth spurt, and we’re only going to trend in that direction.”
Creating an online presence takes time, though. “Those who are online already, and had a presence before Covid-19, continued more or less as normal [in 2020],” said Brian Gavin, CEO of the online jewelry retailer of the same name. “But we didn’t have a huge upswing in 2020. In fact, just after February 2020, we saw a drop. Of course, they started to climb back, and we had a tremendous November and an okay December.”
What’s been moving, and how
One of the biggest Covid-19 changes was in the way goods were sold.
“As consumers got comfortable making emotional purchases online, and especially gifting, we saw growth in virtual appointments,” said Akhavi, adding that Vrai still planned to open its first showroom this spring in Los Angeles, California. “We [also] started more interaction on social channels such as Instagram Live.”
What people bought was notable as well. Akhavi reported an increase in self-purchasing, with customers also seeking out lighter, layering pieces. “People were self-caring,” she elaborated. “Our unusual shapes also sold well, and earrings, which we sold as singles, were one of the biggest sellers.”
O’Desky, whose business is primarily bridal, declared that “lab diamonds, period, the end” were his single biggest-trending seller for 2020. “Over 80% of our sales in 2020 were lab.” He also spent a lot of time on virtual appointments and said it was important for him to be accessible. “If someone texts me at 11 p.m. from my website, and I’m awake, I’m going to respond, because no one else is,” he insisted.
Gavin said his best sellers had been either high-ticket items or lower-priced goods. “Medium prices lagged a bit,” he reported. “We sold a tremendous number of pendants, though, and earrings in 40 points total weight. And the upper end, people who spent [$25,000] plus, was very good.” To improve his reach in that latter market, Gavin is launching a new site called Rare.diamonds to help very wealthy clients source hard-to-find goods.
Looking ahead
“I’m worried about the political instability, and I’m worried about there being enough goods to make sure that price rises won’t occur,” admitted Gavin. “I also think that lab-grown will grow, but I have no intention of taking part. I think it will grow rapidly for two years, and then completely go away.”
O’Desky predicted that people would be more comfortable shopping online, adding that “retailers will move toward not just showing rings, but being able to put rings on your hand using augmented reality, or designing your ring online. If you’re not online now, you’ll be left in that dust.”
Article from the Rapaport Magazine - February 2021. To subscribe click here.