Shine Brighter: Legacy Jewelers Have Lost Their Luster

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Credit: Illustration by Tam Nguyen

When Lauren Clancy was looking for an engagement ring last fall, she pored over options, spending hours on Pinterest and visiting several small shops near her San Francisco residence. Eventually, the now-32-year-old chose an independent designer who helped her create a blue-green sapphire ring set in rose gold. "I love that it doesn't look like anybody else's, and that I had a small part in creating it," says Clancy, who tapped Little Bird Told You, an engagement ring consultant for millennial buyers, to assist in her search.

A new breed of jewelry buyers is looking for unique designs or products that they can create to their liking. And they're not lured in by established brand names like Tiffany & Co. or De Beers. People "want to feel like they've come away with something bigger," says Danielle Mainas Etra, who founded Little Bird Told You five years ago. She notes that younger consumers are more interested in value, and that rarely means paying the markup for a heritage label. They "want something off the beaten track," Mainas Etra says.

It's no longer just about the clarity or the carat: Brands that are successful with younger consumers often promote their ethical sourcing of conflict-free gems, use more inclusive marketing and offer alternatives to traditional items with lab-created diamonds or sapphires.

Global sales of real and costume jewelry are expected to reach $317.2 billion next year, up 6 percent from 2016, according to market research firm Euromonitor. With the holidays, the biggest buying period for jewelry, already in full swing, and Valentine's Day on the horizon, many legacy brands are switching up their marketing playbook in an attempt to shine a little brighter with younger consumers.

De Beers recently said it will grow its marketing budget to $140 million, its largest spending in a decade. Under new leadership, New York-based Tiffany is experimenting with in-store initiatives like a restaurant at its Fifth Avenue flagship, after featuring Lady Gaga in its first Super Bowl appearance, a local buy, last February. Rogers Enterprises, a 107-year-old fine jewelry chain that operates stores under the Rogers & Hollands and Ashcroft & Oak brands, is publishing its winter holiday catalog online in interactive digital format for the first time. Berkshire Hathaway-owned Helzberg Diamonds is on the hunt for a new creative agency and chief marketing officer.

New priorities need new marketing In doing so, they're hoping to lure consumers who are turning to boutiques like Brooklyn's Catbird, a 13-year-old outfit that opened a second, weddings-only location three years ago, or Ontario-based Mejuri, a direct seller that works directly with manufacturers to bypass traditional markups on pricing.

"To millennials, [older and established brands] represent this outdated mode of thinking that's built on corporate greed," says Laryssa Wirstiuk, founder of Los Angeles-based jewelry marketing consultant Joy Joya. "Millennials prioritize a more ethical approach to products—if they know a brand is handmade, or diamonds are sourced ethically, if they know the founder has this interesting story ... that resonates more with them and they want to support the underdog in a way."

Recent years have proven difficult for Tiffany, especially, as consumers shy away from the blue box beloved by their grandmothers. The company, which declined to comment, has struggled with management turnover, ousting former CEO Frédéric Cuménal after less than two years and replacing him in July with former Diesel CEO Alessandro Bogliolo. Designer Reed Krakoff started at Tiffany in January as chief artistic officer and has tried to revive the brand with the younger generation with the Lady Gaga spot and a recent fall campaign featuring the fresh-faced likes of Zoë Kravitz and Elle Fanning. Some analysts are optimistic about the revisions as a potential driving force of change.

"Tiffany & Co. is in early innings of product, store and customer engagement innovation," wrote Oliver Chen, a retail analyst at Cowen & Co., in a recent research note. On an earnings call with investors, Tiffany executives said they will continue to promote the in-store experience, which now includes the New York café and a new customization program that allows customers to design their own rings by cut, setting and metal.

So far, the 180-year-old jeweler is gaining some traction. Net sales were up 3 percent over the year-earlier period to $976 million in Tiffany's most recent quarter ended Oct. 31, although same-store sales declined 1 percent.

At Helzberg, a 210-unit chain based in Kansas City, Missouri, change is afoot but may take a while. The company's former chief marketing officer, Pat Duncan, recently joined Party City and his successor has yet to be named. Helzberg's chief executive, Beryl Raff, says the brand, which sells jewelry ranging in cost from $100 to more than $2,000, stays on top of trends and uses social media like Pinterest and Instagram to better communicate with customers. She pointed to gift-with-purchase promotions and Helzberg's diamond rooms, which offer an interactive experience for shoppers (though the rooms have existed in some form or another for a long time), as ways the company is reaching new consumers. "We're dealing with an emotional product," she says. "I don't think love is going out of style anytime soon."

Inclusive marketing Meanwhile, Signet Jewelers, owner of Kay, Zales and Jared the Galleria of Jewelry, is reading the digital writing on the wall. Earlier this year, it acquired online brand James Allen for around $328 million. Targeting consumers in the 20s and 30s age range, James Allen has seen its web traffic increase twofold in the last year, according to Johanna Tzur, chief marketing officer of the New York-based company, which operates a marketing office out of Israel. Tzur says millennials are more likely to be collaborative on their engagement ring purchasing. To that end, the brand makes an effort to feature couples in its marketing materials, including same-sex couples. In an effort not to alienate or offend, the company also tries to be as neutral as possible with pronouns, Tzur says.

All of the brand's marketing is digital, and campaigns like an Engagement Ring Challenge with BuzzFeed last year have proven successful, according to Tzur, as customers become more comfortable making big jewelry purchases online and using James Allen's 360-view, super-zoom magnifiers to research gems. In the BuzzFeed challenge, one person in a couple designed an engagement ring for the other. "The whole sales dynamic has shifted," she says. "Someone comes online to research and buy, not to be sold to."

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