Direct-to-consumer (DTC) jewelry companies have flourished by cutting out the middlemen—wholesalers, distributors, and traditional retailers—allowing them to offer high-quality jewelry at a lower price point.
By selling directly to customers through their own websites and online platforms, these brands maintain complete control over the customer experience, from product design to delivery. Case in point: Gorjana. The brand was 90% wholesale around 2017, and then opened 15 stores in 4 years. Now, it has over 80 stores across the country.
So, what does this kind of competition mean for our retailers’ jewelry businesses?
Looking at our client data through Oct. 1st of this year, Women’s jewelry has been up just 1% overall. We are seeing some minor growth, but the turn rate is well below plan, at just 1.1, which means inventory is moving slowly. The booming DTC market could be taking a bite of our business.
“Affordable fine jewelry is definitely a trend right now,” says Matt Pruitt, Executive VP of Blacks’ Retail. “There are a lot of options online that are geared toward women making purchases for themselves.”
Some brands keep prices below $500 and offer vermeil gold products and silver. While others move into the luxury space with precious gemstones and solid gold offerings.
And DTC jewelry companies are proving to be masters of social media. Platforms like Instagram allow these brands to showcase their designs and tell their brand story, reaching a global audience.
This represents one front of competition for our retailers, but the other front is happening in-store with widely distributed costume jewelry brands, Pruitt says.
“The ubiquity of a few hot vendors is really frustrating for retailers who want to offer their customers something unique.”
While these are formidable challenges, retailers can compete by leveraging their strengths and adapting to the evolving market dynamics. Here are several strategies traditional retailers can employ to stay competitive:
1) Create Memorable In-Store Experiences
While DTC brands excel at convenience, traditional retailers can provide something unique—personalized, in-store experiences that engage customers on a deeper level. This can include:
- Custom consultations for engagement rings or other high-ticket items.
- Jewelry workshops or events where customers can learn about gemstones, craftsmanship, or care.
- Offering lifetime services like cleaning, resizing, or repairs for an added touch of value.
These experiences help differentiate traditional retailers by offering something that cannot be replicated online.
2) Highlight Craftsmanship and Quality
Traditional jewelers should emphasize their expertise in craftsmanship and quality. Customers still value seeing and feeling a piece of jewelry before purchasing, especially for luxury items. Retailers can:
- Showcase artisan-made pieces and educate customers about the craftsmanship behind each item.
- Offer exclusive collections that highlight unique designs or materials that can’t be found on mass-market DTC platforms or in their competitors’ stores.
- Provide certifications and guarantees for diamonds and precious gems, building trust with customers who may have concerns about authenticity.
3) Focus on Customer Relationships
DTC brands are great at digital engagement, but traditional retailers can leverage their face-to-face interactions to build stronger customer relationships. Offering personalized services like:
- Tailored recommendations based on previous purchases.
- Anniversary reminders and suggestions for gift ideas.
- Special discounts or perks for loyal customers.
Building trust and rapport with clients through excellent customer service can create long-lasting relationships that extend beyond a single transaction.
Despite the online competition, we know that discovering a beautiful piece of jewelry in-store creates a great and memorable shopping experience that our retailers are poised to leverage, Pruitt says.