Yahoo Finance Signet Jewelers sees jump in pandemic engagement proposals ahead of holiday season
Signet Jewelers (SIG), the world's largest diamond jewelry retailer, has seen a boom in engagement ring purchases, months ahead of the traditional holiday shopping season — and more of those big-ticket purchases are happening online.
“We knew that customers would be shopping longer this holiday season. More than 60% of jewelry customers said that they would be in the market early, starting as early as August or September. So, we've really changed the way we think about holiday. It's not just a fourth-quarter phenomenon. We've been thinking about the third and the fourth quarter, together, as the holiday season,” CEO Gina Drosos told Yahoo Finance Live.
On Thursday, Signet, the parent company of well-known brands such as Kay Jewelers, Zales, and Jared: The Galleria of Jewelry, reported stronger-than-expected third-quarter earnings results. Signet's total sales were $1.3 billion for the quarter, up 9.5% from a year ago. The closely-followed same-store sales rose 15.1% from the prior year, while e-commerce sales surged 71.4%. Brick-and-mortar same-store sales jumped 6.8% from a year ago.
The jewelry giant's proprietary research from the prior quarter had anticipated a strong engagement season with couples quarantining together deciding to get engaged. The customer research found that of couples within 18 months of getting engaged, more than half chose to quarantine together. Of those, 93% said their relationships were equally as strong or getting stronger.
In the quarter, Signet saw double-digit growth across its bridal category, with most of that coming from engagement rings.
"We had anticipated more engagements and got out in front of that with great new bridal lines, beautiful product, more customization options, and targeted marketing to couples who were in this stage of their relationship," Drosos said.
Elsewhere, fashion jewelry has also seen strong sales, "with people expressing their style with earrings and pendants now, not with shoes, when we're all on a Zoom call," Drosos added.
Omnichannel experience
The pandemic has accelerated many trends in the retail landscape, including the jewelry business. Technology continues to play a more prominent role as more customers get comfortable with purchasing big-ticket items like jewelry online.
To be sure, the spike in online sales Signet saw was "not a reaction to crisis," Drosos said, noting the company has focused on building "a significantly better digital business" over the last few years.
The CEO, who took the helm in August 2017, has long embraced the role of digital in the jewelry business. Drosos has focused on a three-pillar plan known as "The Path To Brilliance," and one key component is to create an omnichannel experience that blends the physical and online shopping experience.
Drosos' team has focused on creating tools to make customers "feel more comfortable" making an expensive purchase online while maintaining the jewelry consultant's relationship.
This year, the jewelry giant brought technology to its field teams to create a virtual selling experience. The company now has 700 dedicated virtual sellers, while its 20,000 consultants and store managers can also sell virtually or meet physically with clients.
Signet also has visualization tools for online shopping. For example, a customer can upload a photo of their hand and virtually try on rings.
“[When] customers buy jewelry online the two things they're looking for — is advice and a trusted relationship and being able to visualize the product,” Drosos added.
Drosos added that the company has also optimized its store footprint. On the earnings call, the executive highlighted the company's continued shift to off-mall locations. Two-thirds of Signet's store fleet is housed in traditional malls. Of the 380 planned closures in the fiscal year, 316 were closed by the end of the quarter, with most closings happening in standard mall locations.
To be sure, stores will remain a “long-term competitive advantage,” she said. Drosos noted that most of the company's e-commerce sales come within 30 miles of a store.
“Jewelry has been very slow to become more digital, but I think it's really an omnichannel story, and that's where Signet can win.”
Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.
