The New Digital Dawn of Post-Pandemic Retail
Retail has shifted since the start of Covid-19, and the drive toward digital has become more pronounced. Some 90% of jewelry retailers now have online platforms, according to Bain & Company’s Global Diamond Industry 2021–22 report. “The pandemic rapidly accelerated e-commerce, even for independent US retailers,” it states.
The move is a direct result of retailers looking to meet customers where they shop.
“Consumers are buying more online than before the pandemic,” says John Harmon, senior analyst at global advisory and research firm Coresight Research, which specializes in retail and technology. “While sheltering at home, they were disconnected from retail stores as gathering places, and they discovered new online shopping channels. Now, consumers are more open to online shopping, yet their attention is more fragmented.”
Nearly half of consumers are still reluctant to visit public places in general, he adds, citing a Coresight consumer survey from April.
Even stores that had previously invested in e-commerce have seen a shift.
“We already had online scheduling, and we were already doing FaceTime for people who were long-distance,” says Babs Noelle, owner of Alara Jewelry in Bozeman, Montana. “But pre-pandemic to now, what’s changed is the volume of business we’re doing.”
She attributes this to customers continuing to spend their discretionary funds on jewelry instead of luxury travel. “And probably the biggest change I’ve seen is people who never shopped online before for jewelry, suddenly figuring out how to do it.”
Covid-19 has helped more consumers get accustomed to digital, agrees Mike Simoncic, managing director at Alvarez & Marsal Consumer Retail Group.
“The consumer has shifted their behavior to be more online and is therefore more conditioned to do things in a virtual environment,” he says. “In terms of what’s changed for digital, virtual experiences are expanding efficiently and rapidly. The biggest shift is the idea of the consumer’s willingness to purchase and buy online.”
Yet stores that embrace technology are still seeking a balance between digital and in-person connection.
“A lot of us got used to buying and selling out of our living rooms,” says Matt O’Desky, owner of The Diamond Room in Texas, which has private showrooms in Austin and Dallas but has seen an increasing number of out-of-state clients since the pandemic began. “Sometimes we have our clients take pictures of their hands, and we can render it. But I think there needs to be a happy balance. We don’t want to lose that interaction. I don’t want to go to virtual appointments. I want to meet with people in person.”
Seamless experiences
Instead of thinking of e-commerce and brick-and-mortar as separate entities, Harmon says it’s important to see the two as part of the same shopping journey.
“The jewelry industry is leveraging technology to offer consumers the same experience that they would have in a store,” he says. “Retailers are offering consumers the ability to try on products through advances in AR technology, or customize products to their exact specifications and speak with consultants — some through virtual chats, and others live, just as if consumers were in a store.”
Harmon believes these advances lead to higher conversions both online and in-store, because consumers are more informed and confident about their purchases. “[This] is particularly important for high-value segments like jewelry and luxury,” he says. “For example, Signet Jewelers reported that at its retail banner Ernest Jones, 20% of its in-store business is now the result of appointments that were made online. And of those appointments, over 70% result in a sale that’s four times higher, on average, than what a walk-in customer spends.”
Alara Jewelry embraces the idea that customers will be doing their research online, or that they’ll want information after store hours, says Noelle. “A lot of people love to do the initial dipping their toe in the water online, without having to come to a store. If they text us after 6 p.m., they’ll get an automated message telling them we’re gone for the day. Then, the very next morning, they will get a response from us.”
She does much of her initial communication digitally, especially with younger customers. “I don’t know why people shop for jewelry in the middle of the night, but our website has blown up since Covid-19,” she remarks. That’s why she believes it’s so important for businesses to be thoughtful about their online image. “I don’t think bells and whistles are important; I think having a high-functioning website is important, because it instills confidence.”
How tech can help
Online shopping is just one step in the technology journey consumers are making, according to Harmon.
“Chatbots and digital shopping assistants can help retailers deal with the labor shortage,” he says. “And they’re able to work 24/7, when stores are closed.”
Technology can also make a salesperson’s job easier and more effective, he adds. “Handheld devices such as tablets can put a customer’s purchase history in the sales associate’s hands. And artificial intelligence/machine learning (AI/ML) excels at finding relationships among data and making forecasts, and can assist in making intelligent product recommendations.”
Noelle uses customer relationship management (CRM) software to simplify and automate certain interactions. “For instance, we remind [customers] to get their appraisal redone every three years,” she says. “By sending those emails out every three years, we become the favorite of the insurance companies and the clients, and we know that we have this constant income flow from just an email that goes out without us even knowing it’s going out.”
Noelle also offers a downloadable engagement-ring buyer’s guide. If a customer signs up, she will mail them a free ring-sizer and a loupe, and teach the client over the phone how to use them.
“We have probably 40 automated campaigns, and we’re constantly adding them,” she says. “It’s amazing how much business that generates.”
Cryptocurrency and NFTs
This may just be the tip of the technology iceberg, says O’Desky. “We haven’t even begun with the changes that are coming with digital. And our industry in general is always kicking and screaming toward evolving. That’s why so many jewelers had an issue with lab-grown diamonds and lab-grown diamond technology. And the big, big boom — the big thing with [non-fungible tokens (NFTs)] and cryptocurrency — has yet to even come.”
Luxury-goods manufacturers are already beginning to incorporate NFTs into their product lines, says Simoncic. NFTs are unique digital collectors’ items — in the same way a luxury handbag or a custom ring is one of a kind, only in digital form. “Now, when you buy a Gucci bag, you actually get an NFT — a digital asset that has an authentication code. So if you ever wanted to sell that Gucci bag, you have an authentication code tied to it.”
Simoncic expects more retailers to adopt this technology. “As transparency becomes more standardized, jewelers who don’t provide that as a standard will suffer. I think independent jewelers will find it harder to compete. The consumers will demand this type of information.”
O’Desky, who plans to start incorporating NFTs into his product offerings, says he sees a lot of opportunity. “There’s so much value and future potential in NFTs,” he says. “You can buy the NFT of an item, and it’s in a secured holding location.”
The race has begun
Cryptocurrency is also beginning to make waves, but it’s too soon to know how big a role it will play, says Simoncic.
“Cryptocurrency is in the very early stages,” he states. “People who are eco-conscious, probably technology-savvy, will lead to more demand for lab diamonds in the future, and then we’ll probably see a cross-section of those customers with NFTs and cryptocurrency.”
O’Desky says he’s curious but cautious.
“[Cryptocurrency] eliminates the risk of having a stolen credit card given to you,” he acknowledges. “And it’s going to change how we transact. It’s just a matter of doing something new. It’s just another thing that we will eventually adapt to. This is almost a race, and it’s a matter of when you jump on board.”
Noelle isn’t ready to jump just yet, though.
“For every type of different technology I’ve put into play, there’s a learning curve,” she says. “Everything is buggy. So with something like crypto, until I start getting enough requests, I don’t see myself getting entrenched in what will invariably be something that requires more time than I was ever promised it would take to implement it. You always have to look at your risk and your reward and how much time you have.”
One of the more surprising aspects of the tech boom is the new customers it’s bringing in, she adds. “Covid-19 brought older people into online shopping who had never online-shopped before. This was already happening before, but Covid-19 kind of accelerated it.”
Before the pandemic, she says, stores were also more inclined to let customers come to them, but that dynamic has since changed. “People in the jewelry industry were not gearing up to meet the consumer where the customer was comfortable. Now it’s much more important that jewelers meet their customers where they are.”
Where and when to push the buttonRetailers and analysts alike say technology doesn’t have to be all or nothing. “Technology is best for providing convenience [and] information, and removing friction in the sales process,” says John Harmon of Coresight Research. “But service and experience from a human is the key advantage of physical stores over e-commerce.”
A lot of technology is about facilitating communication, says Alara Jewelry’s Babs Noelle. “You want to be available to [customers] in terms of communication. Meet them where they are. Make it so they have confidence in your website. It might not be that they need to buy online, by the way. A lot of people who live local to us shop online and come in to get the final look and buy it.”
She recommends having an e-commerce site — “which I know scares the bejesus out of a bunch of people. But if nothing else, make it so that customers can click and it automatically sends an email or something saying, ‘I’m interested in this piece. Please contact me.’ Something that makes it easy, where they can communicate with you even if they can’t buy it.”
It’s also important not to try and do everything without help, says The Diamond Room’s Matt O’Desky. “Unless you have someone full-time who actually has a digital marketing background, don’t do it in-house. None of us can evolve with the technology and still do our jobs as jewelers. There’s not enough time in a week. If you don’t have someone that knows what they’re doing and is 100% dedicated to digital in-house, I’d be outsourcing.”
Ultimately, says Mike Simoncic at Alvarez & Marsal, it may not be about balance so much as acceptance. “I don’t think there is too much technology,” he maintains. “Retailers need to continue to push the button and push digital as a growth channel.”
This article was first published in June 2022 in a special Rapaport supplement titled Retail in the Digital Age.
Image: Stocksy.
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Rapaport Weekly Market Comment Posted by Rapaport News • 23-06-2021
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Trade Seeks to Broaden Kimberley Process Agenda Posted by Rapaport News • 23-06-2021
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Ruby Ring Crushes Estimate at Auction Posted by Rapaport News • 23-06-2021
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WD Launches Traceable Lab-Grown Brand Posted by Rapaport News • 23-06-2021
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De Beers Sales Bounce Back Posted by Rapaport News • 22-06-2021
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Lucara Wows Again with 1,175ct. Rough Posted by Rapaport News • 22-06-2021
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Banks Boost Credit to Indian Trade Posted by Rapaport News • 21-06-2021
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22ct. Pink Diamond Up for Sale Posted by Rapaport News • 21-06-2021
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Diacore Buys Record Yellow Diamond for $5M Posted by Rapaport News • 20-06-2021
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How Many Bitcoins for a 101ct., Flawless Diamond? Posted by Leah Meirovich • 20-06-2021
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Alrosa Reshuffles Supervisory Board Posted by Rapaport News • 20-06-2021
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US Diamond Shipments See April Recovery Posted by Rapaport News • 19-06-2021
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50ct. Diamond Sets Online Record at Sothebys Posted by Rapaport News • 19-06-2021
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Diamond Rush in South African Village Posted by ECONOMY • 17-06-2021
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World Reading Day 2021 Posted by JAYKAR • 18-06-2021
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Worlds Third-Largest Diamond Discovered by Debswana Posted by MINING AND EXPLORATION • 15-06-2021
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Exceptional Blue Diamond to Yield a Million per Carat Posted by ROUGH MARKET • 14-06-2021
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How Two Crises Shaped the Diamond Trade Posted by Avi Krawitz • 14-06-2021
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New Synthetics Facility to Open in Israel Posted by Rapaport News • 13-06-2021
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Mountain Province Prices Jump 18% Posted by Rapaport News • 12-06-2021
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US Jewelry Revenues Surge in May Posted by Rapaport News • 12-06-2021
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Jewelers Mutual Snaps Up E-Commerce Group Posted by Rapaport News • 12-06-2021
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NRF Raises Forecast for 2021 US Retail Sales Posted by Rapaport News • 12-06-2021
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Rapaport Weekly Market Comment Posted by Rapaport News • 09-06-2021
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Signet Gaining Market Share as Sales Soar Posted by Rapaport News • 09-06-2021
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Alrosa Sales Steady as Cutters Continue to Buy Posted by Rapaport News • 10-06-2021
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IGI Identifies 6ct. Lab-Grown Submitted as Natural Posted by Rapaport News • 09-06-2021
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Diamond Necklace Leads $38M Sothebys Auction Posted by Rapaport News • 09-06-2021
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India Launches New Trade Fair in Dubai Posted by Rapaport News • 08-06-2021
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54ct. Diamond Crushes Estimate at Christies Posted by Rapaport News • 08-06-2021
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Israels Polished Trading Surges Again Posted by Rapaport News • 08-06-2021
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Indias Polished Exports Set to Jump Posted by Rapaport News • 07-06-2021
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Lucara Turns Up 470ct. Rough at Karowe Posted by Rapaport News • 07-06-2021
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De Beers Raises Prices of Larger Diamonds Posted by Joshua Freedman • 06-06-2021
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Diamond Suppliers See Unprecedented Sales Posted by Joyce Kauf • 06-06-2021
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Grib Taps Sarines Traceability Tech Posted by Rapaport News • 06-06-2021
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Gem Lab IGI Pledges to Become Carbon-Neutral Posted by Rapaport News • 06-06-2021
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Indias Domestic Trade Pleads for Financial Help Posted by Rapaport News • 06-06-2021
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Diamond Shortages Driving Crazy Rough Prices Posted by Joshua Freedman • 06-06-2021
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Steady Demand Lifts Diamond Prices Posted by Rapaport • 06-06-2021
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World Bicycle Day 2021: From significance of the day to health benefits of cycling, heres all you need to know Posted by JAYKAR GROUP • 02-06-2021
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Rapaport Webinar: Five Steps Toward Recovery Posted by Rapaport News • 25-05-2021
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Lucapa to Buy Australias Merlin Mine Posted by Rapaport News • 24-05-2021
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India Exports Hit Two-Year High Posted by Rapaport News • 24-05-2021
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Christies Unveils Vintage Selection for Paris Sale Posted by Rapaport News • 24-05-2021
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IGI Debuts Training Courses in Egypt Posted by Rapaport News • 24-05-2021
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Christies Sells Pink Diamond for Record $29M Posted by Rapaport News • 23-05-2021
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12ct. Diamond Crushes Estimate at Skinner Sale Posted by Rapaport News • 22-05-2021
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Lab Spots Synthetic Ruby Necklace Sold as Natural Posted by Rapaport News • 19-05-2021
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De Beers Sales Stall Amid India Slowdown Posted by Rapaport News • 18-05-2021