LONDON — Fine jewelry is now one of the fastest-growing categories in e-commerce, and retailers have embarked on a race to establish themselves as leaders with exclusive products, brand partnerships and an array of editorial content.
Earlier this year and within months of each other, Farfetch and Net-a-porter both debuted fine-jewelry hubs, dedicated selling spaces with educational content and editorial imagery. It’s not a surprising move given the category’s burgeoning popularity and the high return on investment.
Unlike with fashion, the product is rarely, if ever, discounted. Consumers can scan the Internet as much as they want, but they won’t find those Cartier diamond earrings at a cut rate. “Jewelry is experiencing strong consumer demand, hence it’s an attractive category. Besides, it is almost entirely sold through monobrand retail, which makes price discipline high and ensures little discounts,” said Luca Solca, head of luxury goods at Exane BNP Paribas.
Net-a-porter was one of the first e-tailers to convince its luxury consumers to buy their diamonds online after securing their trust in the ready-to-wear and accessories categories. One of its first major partnerships included a capsule fine jewelry range with Chanel, marking the first time the French house had sold any of its products online. Net and its companion men’s site Mr Porter have since gone on to lure the likes of Pomellato, Buccellati, Piaget, Chopard, Cartier, IWC Schaffhausen and Jaeger LeCoultre.
“I could see that there was no one playing in the space, so we wanted to take it to the next level and create a home for our fine-jewelry offer, just like bricks-and-mortar stores have a destination for their jewelry curation,” said Elizabeth von der Goltz, global buying director of Net, which launched its Fine Jewelry Suite in April. The aim, the company said, is to become the “ultimate online destination” for hard luxury and grow the category 300 percent by 2020.
“Our customers truly trust us, especially when it comes to high-ticket items and they love the way that we put fine jewelry in a fashion context so it becomes very wearable, a true accessory,” she said.
The new hub also presents an opportunity for Net to further engage its high-spending customers, or EIPs (Extremely Important People). These generate 40 percent of the company’s total revenues and tend to make some of their biggest purchases with well-known fine-jewelry labels.
“Our EIP customer, which is our most important customer, is definitely buying fine-jewelry pieces and now she knows that she can come to us,” von der Goltz said, adding that until recently Net was not necessarily the go-to destination for those customers looking for fine jewelry.
“Now we want to show that we’re really seriously in this business and we can source unique pieces for this discerning customer, whether it’s from a design standpoint or from a stone standpoint,” she added.
She said that Net is planning to introduce additional features on its hub where EIPs will be able to book personal appointments to discover one-off pieces. The formula is clearly working, with one EIP purchasing a Panthère de Cartier watch within two minutes of its online launch via a WhatsApp message to the retailer’s personal shopping team.
Net will undoubtedly see more fine jewelers join its hub: Richemont, owner of Cartier, Van Cleef & Arpels and watch brands such as IWC and Panerai, has completed the purchase of 100 percent of Yoox Net-a-porter Group.
Richemont’s chief financial officer Burkhart Grund said during the 2017-18 results presentation in May that owning YNAP will allow Richemont to “leapfrog” into the realm of e-commerce. Richemont, like other luxury groups, had long been reluctant to embrace the digital world for fear of losing its perception of exclusivity and control over distribution.
For Farfetch, launching a fine-jewelry hub was a natural extension to its offer and a response to consumers’ demands, according to the company. The retailer, which operates with a marketplace model, believes that it can bring something new to the table, given its Millennial-focused customer base and presentation of the product via trendy imagery.
“We wanted to create a hub with very big brands, but to present their products in a very different way. The idea of selling De Beers diamonds through street style photography is something that has never been done before,” said Giorgio Belloli, Farfetch’s chief commercial and sustainability officer.
The consecutive launches of the online jewelry hubs both by Farfetch and Net as well as e-tailers’ increasing presence in the hard luxury market — Browns and Matchesfashion.com have also been growing their online jewelry offer with niche, independent jewelry designers while Moda Operandi set out to engage a serious jewelry buyer from the get-go, with its no returns policy — means the battle for the big brands and exclusive products is now on.
So which way will the brands go?
According to Solca, selling direct-to-consumer via their own stores or e-commerce channels will remain the most viable — and profitable option — for jewelers. However, strategic retail partnerships can act as a stepping stone to the digital market and help storied jewelry houses refresh their image and reach a younger, more global consumer.
“Brands will resort to wholesale only as a shortcut to get on the Internet or when traffic is highly concentrated — like in China, for example — on a handful of platforms,” added Solca.
De Beers chief executive officer François Delage echoed the sentiment, citing the access to a younger customer base, data insights and a new editorial point of view, as some of the main reasons the jewelry house decided to embark on its first online partnership with Farfetch.
“Farfetch is giving us access to a global audience well beyond our existing markets. It’s also an opportunity to deliver to our clients in a timing that fulfills their needs and can be as short as 90 minutes,” said Delage, pointing to a need for the brand to adapt to consumer behavior which is “increasingly shaped by digital both in the West and in the East.”
De Beers also said it was drawn to the more youthful ways that Farfetch translated its product by styling it with on-trend, seasonal clothing from its site. “The execution had to be on brand, but we also wanted to capture an appealing zeitgeist. The desire for a brand is more than ever about visual perceptions, all created through social media and digital. So [Farfetch’s] editorial point of view is a benefit to our clients, by presenting the brand in a manner that is relevant to them.”
Solca added that, going forward, retailers will have to manage their fine-jewelry hubs carefully. The danger would be to grow their offer too quickly and lose the essence of luxury and exclusivity by presenting too many brands and too much product on the page. “The quality of the digital purchase experience and brand presentation will be key,” he said.
Colleen Caslin, chief executive officer of the London-based diamond jeweler Jessica McCormack, which currently does not sell online through third-party sites, would agree. She said that platforms selling fine-jewelry brands should be more judicious in curating the brand representation and offerings. “The platforms should provide an elevated fine-jewelry experience.”
David Yurman’s president Carol Pennelli said she sees online retail partnerships as a risk-averse way to expand into new territories and raise brand awareness.
“E-tailers know better than we do that what flies in New York or Los Angeles does not necessarily resonate in Shanghai or Berlin. In some ways they are a shortcut for us to expand into new territories without assuming all of the risk and introduce the brand to consumers who may not have access to a David Yurman physical retailer,” she said.
The label has recently launched its women’s collections on Farfetch, while its men’s offer was made available on Mr Porter for the first time last year.
Farfetch’s marketplace model also allows the brands to retain control over sales by choosing what is uploaded onto the site from their existing stock: “We control our message, it’s our product edit and we can test and learn what’s working in new markets,” said Pennelli.
Delage of De Beers said he sees Farfetch’s distinctive marketplace approach “as an ecosystem, and I believe ecosystems are not just very relevant, they are the way into this new world.”
Going with Farfetch, Net or Moda isn’t the answer for every fine-jewelry brand. Many smaller names are wholeheartedly embracing digital, but doing more personally, via Instagram, which could prove to be the ultimate digital service for the brands.
Independent jewelry designers such as Sabine Getty and Solange Azagury-Partridge have recently shifted their strategies away from wholesale, in favor of one-on-one interaction with their customers, via showroom appointments, trunk shows or direct messages on Instagram. Chat-based platforms, like Instagram, tend to suit the needs of digitally savvy, high-spending customers looking for one-on-one, speedy service.
Threads Styling, a social commerce platform focused on servicing high net worth Millennials, has also been using Instagram to sell fine jewelry to its customer base and sees hard luxury as one of its fastest-growing categories. To wit, all of its personal shoppers are now GIA-trained. Audemars Piguet, Suzanne Kalan, Foundrae, Cartier and Shay Jewelry make regular appearances on Threads’ Instagram feed and the company has been able to sell pieces costing up to 30,000 pounds via Instagram and WhatsApp.
By establishing a relationship with the customer online, brands are also more likely to lure customers into their stores, which remain the most important pillar of their retail networks.
Buccellati, one of the first brands to jump on the online bandwagon via an exclusive partnership with Net-a-porter, said that while e-commerce partnerships generate business and “significant promotion for the brand,” the focus of its strategy for growth remains on expanding its own retail network, particularly in Asia.
Similarly, De Beers said it is looking at ways of enhancing its in-store experience with digital features and Yurman is working on a revamp of its own e-commerce. “The days of dividing the world into real or virtual economies, online and off-line channels are over. The challenge is extending our engagement with consumers and creating value,” added Pennelli.