Physical retail is essential for brands across categories. There is no substitute for talking to knowledgeable staff, seeing a potential purchase in person, and experiencing a brand’s story firsthand. However, for some categories retail is even more imperative. One such category is jewelry. With high-quality, high-cost items that need to be seen, this is a segment primed for brick-and-mortar growth.
At the same time, jewelry and watch brands face headwinds. Customer acquisition costs are rising alongside mounting supply chain challenges, making it that much more difficult to open a store on your own (learn more about offsetting acquisition cost with retail here). To lower this risk, we have worked with several brands from this category to deploy stores across the country this year, including Ring Concierge, Aurate, Vincero Collective, and Little Words Project. Amid labor and fixture shortages, the flexibility of our model means we’ve been able to design, build, and open stores for an entirely new category with a fast turnaround.
Let’s dive into the current state of this vertical, how it’s set to evolve over the next year, and what this means for retail as a whole.
Jewelry sales are rebounding and on the rise. The US jewelry and watch market is expected to reach $57.96 billion in revenue by the end of 2021, with the industry expecting a rebound of between 1% to 4% growth. This reflects a couple of trends. One is the increase in spending power of high net worth individuals in 2020, as well as the pause in spending on things like travel and dining out over this period. The result is pent-up demand for luxurious items that shoppers can wear for their return to public life.
This also reflects a number of developments in certain sub-categories. A combination of increased collector activity and investment has resulted in a 30% increase in prices for Rolex watches, regardless of model or pre-owned status. The watch market is expected to continue to grow by $8.31 billion between now and 2025, with a compound annual growth rate of 2%.
In the summer of 2020, jewelry sales surprised analysts by spiking $1 billion year-over-year. What caused this uptick? Engagement rings, as thousands of customers who had held off on popping the question decided to take the plunge.
Bolstered by these developments, the jewelry and watch industry is entering 2021 with the wind at its back. JCK has seen confidence in the industry surge back nearly to pre-COVID levels, with 82% of those surveyed saying they are optimistic about their business in the coming year.
With this positive turn, jewelry and watch brands are looking to reinvest their profits where it will matter most—store experience.
McKinsey expects that 80 percent of fine jewelry purchases will still be made in stores in 2025. This means that improving every aspect of the modern, omnichannel jewelry store will be essential to maintaining and maximizing profits for these brands for the foreseeable future. JCK’s research found that 26% of jewelry and watch retailers named improving in-store buying experiences as a top priority. Independent retailers specifically noted that improving their in-store experience was even more important, with 43% making it a priority. Of those surveyed, 36% named in-store experiences and curated events as business practices they expect to be successful in 2021, and we’re inclined to agree.
With the way the landscape is looking, it’s no wonder that jewelry and watch brands are prioritizing brick-and-mortar stores in 2021, 2022, and beyond. There is massive opportunity for jewelry, watch, and accessory brands to open and win with brick-and-mortar stores. Let’s take a look at some of the brands who are launching retail with Leap to capitalize on these shifts.
Ring Concierge: Offering a luxurious fine jewelry shopping experience without the markup, Ring Concierge launched eight years ago with the mission to transform the typically impersonal and expensive process for buying wedding rings and fine jewelry. They’ve created a loyal online community, and we’re excited to bring their first-ever immersive Leap-powered experience to 400 Bleecker.
For the first time ever, customers are able to shop Ring Concierge’s fine jewelry in person, experiencing their favorite Instagram designs in real life. In addition to shopping for fine jewelry, clients can try on Ring Concierge's most sought after signature engagement ring designs.
Vincero Collective: Vincero Collective has envisioned a vertical supply chain and small batch manufacturing process that ensures quality. Delivering watches and accessories made without compromise at an unrivaled value, Vincero sources all of their own raw materials and hires in-house quality control specialists.
Since starting with just a dress watch, Vincero has added dozens of products to their arsenal, including sunglasses and bracelets, and have cultivated a customer base who are as loyal and passionate about what they do as they are.
Little Words Project: Little Words Project is about more than just bracelets. Their aim is to inspire and encourage kindness—whether it’s being kind to yourself, or paying kindness forward.
Shoppers choose a word that’s meaningful to them, then register it via the code on their bracelet's charm tag. They then wear this word to promote love and self confidence until they don’t need it any longer, at which point they let it go and pass it on to someone who needs it more. They can then track this word online and watch as it travels around the world to new wearers.
Aurate: Aurate’s focus is on beautiful pieces for everyday wear, made with durable materials, transparent pricing, and sustainable practices. Each of their pieces is handmade with ethically sourced sustainably made 14K gold, 18K gold, and 14K gold-plated vermeil, and all are rigorously tested to ensure they last a lifetime and look great, too.
The brand prides themselves on sustainability and responsibility. All this gold is 100% recycled, their diamonds are carefully chosen and tracked, strictly adhering to the Kimberley Process, and their pearls are cultivated on family-run farms where they are sustainable harvested for the safety of the marine environment.
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Adapting our model to create spaces that are perfect for the jewelry category required us to pay close attention to the customer journey. There are no fitting rooms and fixtures, and the way associates and shoppers interact is totally different from the apparel space. However, by understanding the customer and their shopping journey, we can go back to the root of our design process and create new experiences from the ground up for brands of any category. And as we onboard more brands from different categories, we can use our data to better understand the journey and improve the experience at every Leap-powered location.
So what categories are we prioritizing next? We’ll continue to expand within the swimwear and home decor markets, with golf as our newest category with the opening of Bad Birdie in Scottsdale, followed closely by maternity with the opening of A Pea in a Pod in Chicago. We’ll continue to prioritize the shopper to create the right experience for every category we enter.
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