Signet Jewelers is adjusting its strategy towards lower-priced fashion jewelry and increasing its online presence. This move, as outlined by CEO Gina Drosos, aims to tap into the growing trend of self-purchases and the demand for more affordable jewelry options.
Expanding Market Share in Affordable Fashion Jewelry
Drosos noted that the company sees growth opportunities in the lower-priced fashion jewelry segment. “We have the biggest opportunity to grow our market share in lower-priced fashion jewelry and self-purchases in and out of malls,” Drosos stated. This category focuses on women purchasing jewelry priced under $500 for themselves. To achieve this, Signet is considering both mergers and acquisitions (M&A) and organic growth strategies.
Online Sales and the Shift Away from Malls
Signet’s online sales have risen from 5% of total sales in 2017 to 23% currently. Drosos believes that this figure could eventually reach 40%, although she did not specify a timeline. This shift is part of a broader trend away from mall-based stores towards more profitable off-mall locations. “Three years from now, it is likely we will have even fewer mall stores and more off-mall stores,” Drosos predicted. Off-mall stores have been found to be more efficient, with higher sales per square foot and greater profitability.
Streamlining Operations and Leveraging Data Analytics
Since taking the helm in 2017, Drosos has overseen the closure of over 900 stores, aiming to streamline operations and focus on more profitable ventures. Currently, Signet operates 2,700 stores under various brands, including Zales, Jared, Banter by Piercing Pagoda, Diamonds Direct, Blue Nile, JamesAllen.com, Rocksbox, Peoples Jewellers, H.Samuel, and Ernest Jones.
Mall-based stores still account for 40% of Signet’s revenue. However, the ongoing strategic shift towards off-mall locations and e-commerce is expected to enhance overall profitability. Signet aims to achieve $9 billion in annual sales within the next three to five years, representing a 25% increase from its fiscal 2024 revenue of $7.17 billion.
Addressing Post-COVID Challenges and Leveraging AI
One of the challenges Signet has faced is the decline in engagements post-COVID-19. Drosos noted that this trend is starting to reverse, aligning with the typical three-year timeline from the first date to marriage. Signet is leveraging its database of 17 million individuals who are dating but not yet engaged to personalise marketing efforts. “We’re personalizing marketing messaging sent as these consumers move along the path to engagement,” Drosos explained. The company utilises AI and machine learning to deliver relevant information to couples at the appropriate stages of their journey.
Implications for Jewellers and the Industry
Signet’s strategic shift highlights a broader industry trend towards affordable, self-purchased jewelry and the growing significance of e-commerce. Jewellers must recognise the increasing importance of digital platforms and the potential profitability of off-mall store locations. The use of data analytics and personalised marketing also highlights the evolving landscape where technology plays a critical role in consumer engagement and sales strategies. As Signet continues to adapt and innovate, jewellers should consider similar approaches to remain competitive and meet changing consumer preferences.
