Signet Jewelers (SIG), the world's largest retailer of diamond jewelry, is seeing pent up demand for marriage proposals following COVID-19 lockdowns — with lots of help from soaring online sales.
The parent company of well-known brands such as Kay Jewelers, Zales, and Jared: The Galleria of Jewelry, gleaned this insight from conducting its bespoke jewelry research on consumer trends during the coronavirus outbreak.
CEO Gina Drosos told Yahoo Finance that more than half of couples who were already engaged decided to quarantine together; of that number, nearly half said their relationship had gotten better, according to a Signet survey — and in many cases accelerated timelines to get engaged.
"So, I think, if anything, COVID-19 has made all of us focus on relationships and those who we really care for and want to go ahead and make [a] commitment," Drosos told "The Ticker" in a recent interview.
The survey also found that younger men — the largest group of engagement ring purchasers — are the least anxious to go inside stores, with 64% seeking an in-store experience.
E-commerce zooms ahead
Signet posted a loss in the second-quarter, with revenue falling sharply from a year ago as same-store sales plunged by over 31% as lockdowns forced the shuttering of brick-and-mortar.
Yet in keeping with other retail chains that have shuttered physical stores, Signet’s e-commerce sales skyrocketed by 72.1% from a year ago. On a call with analysts, Drosos explained that it took four years to grow the e-commerce penetration from "roughly 5% to 12% last fiscal year” to the 30% of sales seen during Q2.
While lockdowns and store closures augmented e-commerce sales, Drosos said the company has continued to see higher online shopping levels even after stores reopened.
The CEO, who took the helm in August 2017, has long embraced the role of digital in the jewelry business. Drosos has focused on a three-pillar plan known as "The Path To Brilliance,” and one key components is to create an omnichannel experience that blends the physical and online shopping experience.
Most people buy jewelry, especially diamond jewelry, in stores, but Drosos declared early in her tenure that digital would be an area the company would need to grow.
"The jewelry category has been slow to evolve into the digital space," she told Yahoo Finance's "The Ticker.
In September 2017, Signet purchased online-only diamond jewelry brand JamesAllen.com's owner R2Net, an acquisition that's helped provide insights to use across the portfolio's web operations.
Traditionally, internet sales have been “for the category, lower ticket items, more gifting or fashion online. But, James Allen knew how to sell bridal effectively online through virtual consultations,” the CEO explained to Yahoo Finance.
“So, during the last six months, we've really leveraged a lot of those skills and capabilities, brought those onto Kay, Zales, and Jared," she added.
According to Drosos, the company saw its average unit retail grow from online purchases in the quarter, driven by "customers buying higher-priced fashion jewelry — Zoom-worthy earrings and pendants with so many people working from home — as well as more bridal being sold online."
An exodus from the malls
Signet had now closed 293 of the planned 380 store closures for the fiscal year, Drosos told analysts recently, with nearly all of those in traditional mall locations. With the recent spate of closures, the company has reduced its store count by 19% since the end of fiscal 2017 amid a shift to “off mall” areas that offer lower costs and higher performance.
Yet Drosos told Yahoo Finance that jewelry is "really an omni-channel category" and that stores matter.
"Most customers have an integrated shopping journey doing research online, coming in-store to get consolation. What's been so interesting about this COVID-19 pandemic time is that we've really been able to provide that human connection through virtual consulting,” she said.
“So, we're using digital tools to co-browse with customers, to do video conferences, to book online appointments," Drosos added. In the second quarter, the company saw more than 300,000 virtual, videoconference and curbside consultations.
"These appointments are generating both higher conversion levels and higher average transaction values than historical e-commerce transactions," Drosos said.
Julia La Roche is a Correspondent for Yahoo Finance. Follow her on Twitter.