No industry has been immune to the seismic shifts caused by the growth of the digital landscape. Driven by digital disruption, the fashion industry has been subject to heavy transformation in the recent years. In comparison, the jewelry sector has remained relatively traditional. However, given the intensifying competitive landscape and the battle for customer loyalty across all retail sectors, there are opportunities that jewelry brands can no longer afford to ignore.
The following point of view details some of the most significant trends and opportunities in the jewelry industry and illustrates how brands can equip themselves to successfully navigate in the digital economy.
1. Digital will spur demand for fast fashion in the jewelry industry
It’s no secret that fast fashion has revolutionized the fashion industry. Even though its roots are in the affordable clothing segment, the fashion-jewelry market has not been immune to its effects.
Beeline, a German-based brand jewelry company, adds hundreds of new items to its collection every month—an unusual practice in the industry where two collections per year are considered standard. Similarly, there’s BaubleBar, an e-commerce site, known for its “fast fashion” take on women’s jewelry. The company delivers products with a faster turnaround than its traditional competitors with a compressed supply chain process that accelerates their design-to-sale process in as little as four weeks.
The modern fashion industry is built on this kind of instant gratification. Rapidly shifting trends mean consumers regularly buy new items, regardless of the season. As the jewelry market grows and new, savvier players emerge, jewelry retailers will need to take the necessary steps to be more agile and flexible to rapidly adopt to changing market trends and consumer demand.
What’s needed to make this happen? Real-time analytical capabilities.
Consumer insight is key to enable brands to deliver designs that resonate with their shoppers as and when they’re trending. With the right technology in place, brands can view and evaluate the real-time insights required to guide the design, merchandise, and inventory allocation process.
2. Physical and digital channels will be integrated to drive omnichannel growth
Physical monobrand stores and e-commerce will continue growing in importance. However, integration of these channels will be key in providing a seamless experience to the customer.
Fashion brands, such as attune client The Rockport Group, have already started integrating their retail stores and e-commerce systems to facilitate omnichannel functionalities such as click and collect, and buy online and return at any store.
Studies show that the majority of the jewelry industry has not yet this model. According to L2 Digital Intelligence, only 54% of watch and jewelry brands have a buy online feature, with 15% offering in-store pickups and 9% integrating live inventory availability on their sites. However, some jewelry brands, like leading Hong Kong-based retailer Chow Sang Sang, have already moved towards an omnichannel offering. They launched an online store where customers can reserve items online and view them in-store before making a purchase as well as purchase online and pick up in-store, or have it delivered to a designated address. Jared, the Galleria of Jewelers, and Kay Jewelers have embraced similar strategies, which have resulted in a staggering 49% increase in online sales.
Jewelry brands can no longer afford using a single channel. To keep up with growth plans such as geographic expansions, the creation of a new brand or the addition of a new business channel, an integrated system is crucial for a centralized real-time view of customers, orders, sales, and inventory.
What’s needed to make this happen? A single, vertically integrated platform.
Managing each channel separately results in siloed data—leading to data replication and redundancy, siloed analytics, and siloed information among departments of the same organization. Operating as a forward-thinking brand in today’s market relies on synchronizing data and processes across all channels to improve customer experience, deliver faster inventory turn, and enable future growth.
3. More retailers will look at personalization to enhance the shopping experience
While brand loyalty is fleeting in the new consumer-centric economy, superior service and personalization will differentiate the winners from the rest of the pack.
Research shows that personalized content can increase the average order size by more than 20%—yet few companies do personalization right. The challenge lies in building an omnichannel landscape where data from different touchpoints can be collected and used for analytics.
Consider the case of jewelry retailer Alex and Ani, which has experienced 5,200% growth in revenue in three years. Much of the company’s success lies in its ability to personalize throughout the customer journey and beyond its e-commerce site by gathering data on an ongoing basis and sharing these insights with wholesale partners that sell the brand’s jewelry. Another great example is Swoonery, a luxury e-commerce platform that uses an algorithm to recommend items based on an analysis of customers’ individual preferences.
Looking ahead, jewelry brands need to preempt the expected doubling of online sales—from 4-5% to 10% by 2020—and implement a suitable platform that can collect and evaluate data from various devices. Be it desktops, smartphones, tablets, or point-of-sale systems, retailers will need to utilize all the data they can in order to offer a competitive and more seamless customer experience across all channels.
However, knowing individual interests and preference alone is not enough. The future of personalization relies heavily on context. This way, brands can deliver the right offer at the right time, increase the likelihood of a successful cross-sell, and use the same data to personalize in-store experiences using mobile technology.
What’s needed to make this happen? A single view of the customer.
With a unified view of the customer, brands can leverage buying patterns, behavioral data and contextual insights for a truly personalized offering.
A digital core for the jewelry industry
In order to adapt to the ongoing digital shift, jewelry brands need to radically rethink their core system so they can identify and respond to changing consumer demand in real-time, synchronize sales channels, and deliver a personalized service. A digital core comprised of the latest innovative retail technologies will help deliver a consistent, relevant, and exceptional shopping experience across all touchpoints.
Attune’s digital core solution is designed to create a powerful foundation that gives you a single view of your customers, inventory, and products to power various omnichannel functionalities. In short: everything you need to run your jewelry business in the omnichannel.
If you’re a retailer and want to learn more about how we can help you address the above issues, visit our website or the attune booths at SAPPHIRE NOW in Orlando, Florida or the SAP Retail Forum in Mainz, Germany.