How do you sell a $4,000 diamond engagement ring online? With a whole lot of personalized support, jeweler Signet Jewelers Ltd. is learning.
The owner of Jared and Kay -- which in April rushed out a new platform for virtual shopping -- has hosted roughly 200,000 virtual consultations as it tries to mimic the in-store hand-holding that usually accompanies big-ticket purchases. Customers can go online to schedule an appointment or speak with someone immediately, digital features that previously weren't commonplace in an industry defined by rows of display cases and one-on-one service.
"Trust is so critically important for people when they're purchasing in this category," said Gina Drosos, chief executive officer of Signet, whose empire of mall staples also includes the Zales chain.
For years, the U.S. jewelry industry had been slow to embrace online shopping because it sells pricey items that customers often want to touch before dropping hundreds or thousands of dollars. That's changing quickly during the pandemic as shoppers get used to buying almost everything from their couch. At Signet, online sales rose 6.7% last quarter, even as net sales plummeted more than 40%.
As customers browse online, they're able to find what they want and may come to the store only to make the final purchase. That means shops don't need to be jam-packed with items anymore.
"The old retail model was very much to make sure you got plenty of inventory in the store, because that's where customers come to see selection," said Drosos. "That's not true anymore."
As the coronavirus pandemic upends the retail sector and consumers increasingly turn away from traditional malls, Signet has had a tough go, with shares down 52% this year. If those losses hold, it would be the worst year for the stock since 2008. Even before the health crisis began, Drosos was working to reduce costs, invest in e-commerce and reimagine the company's network of more than 3,000 jewelry stores in North America and Europe.
Drosos says the virtual consultations will become mainstays, even after the pandemic comes to an end. That could forever change the way employees work, with associates able to do consultations both in-store and online, even on the same day, she said.
But that doesn't mean abandoning stores. Signet is in the process of trimming its locations by at least 380 this year, or 12% of total stores, but there are no plans to leave shopping centers that are performing well. About 75% of Signet's stores had reopened in some capacity as of last month.
To keep shoppers coming into stores, Signet will more actively tout its selection of in-store services, including repair, engraving, cleaning, appraisals and warranty inspections. The retailer's custom design business, which lets customers modify old jewelry into something new, returned last week.
Some stores will also experiment with offering multiple Signet brands, like opening a bridal boutique from higher-end Jared inside a Kay store. Executives have already tested this with Jared and James Allen, its online-only jewelry label.
"It will be forever different in our stores," Drosos said. But "there will always be reasons to come into the store."