Grand View Research estimates that the jewelry market will reach 480.5 billion dollars in 2025, representing a compound annual growth rate of 8.1% from 2021 to 2025. Facing the challenges of store closures due to the impact of COVID 19, the jewelry business sees a new trend of shifting from offline to online. The new movement creates exciting opportunities for the jewelry industry to rebound sharply post COVID 19.
Amidst the trend, Signet Jewelers, the world’s largest retailer of diamond jewelry, took the quick move with the strategy of a three year comprehensive transformation from offline to online in 2019. Thanks to this strategy, the company outperformed competitors during the post COVID 19 rebound, with growth consistently ahead of the total jewelry market, the mid tier segment, and independent jewelers.
Signet Jewelers operates 2,837 stores and kiosks as of July 31, 2021. Its market is mainly in North America, with 2,392 locations in the US and 94 locations in Canada. In addition, Signet also has 351 stores in the UK, Republic of Ireland, and Channel Islands.
Amongst the highly fragmented and competitive jewelry market, Signet Jewelers sets itself apart from other competitors with its unique value propositions. First, Signet invests heavily in Omni channel to enhance customer experience. To make every purchase of merchandise from Signet’s store personal and intimate, its omnichannel strategy focuses on:
1) Investments in technology to enhance the customer journey such as developing AI driven conversational commerce, focusing on customer first delivery options.
2) Increased use of powerful customer-based data analytics to achieve a more comprehensive view of the customer, which is expected to allow the company to follow up on previous purchases as well as anticipate their needs.
3) Adding new capability to Signet’s digital customer clientele program, which enables the company’s jewelry consultants to build a direct relationship with their customers to create a more personalized customer experience.
Second, Signet is industry leading in terms of merchandising. Merchandise selection, innovation, availability, and value are all critical success factors. The range of merchandise offered and the high level of inventory availability are supported centrally by extensive and continuous research and testing. Signet is constantly evaluating global design trends, innovating, and developing new jewelry collections, including through strategic partnerships that resonate with customers.
Third, Signet has strong store brand recognition. The company operates six brands in North America and 2 brands in the UK. Some prominent brands are Kay Jewelers, Zales Jewelers, Jared The Galleria Of Jewelry. These brands are the largest, third largest and fourth largest specialty retail jewelry brand in the US based on sales. Signet continues to reposition its store portfolio in a manner that will drive greater store productivity. These efforts include developing and implementing innovative store concepts to improve the in store shopping experience, execution of opportunistic store relocations and store closures aimed at exiting underperforming stores, reducing the company’s mall based exposure, and exiting regional brands.
In the third quarter of the fiscal year 2022, Signets enjoyed a total sales of 1.5 billion dollars, an increase of 18.2% year over year. Operating income reached 105.2 million dollars, up 125% year over year. Ecommerce sales contributed 273.1 million to the total revenue, up 14.4% year over year and up 96.1% to the third quarter of the fiscal year 2020. North America continues to be the major revenue contributor with 91% of total revenue and leading in same store sales growth at 19.8%.
Going forward, Signet expects to see robust growth in the long term thanks to its competitive advantages and momentum from the market. The online jewelry market is booming and is expected to increase by 19.8 billion dollars, an annual growth rate of 15% during 2020 to 2024. In 2021, Signet online jewelry sales accounted for nearly 4% of the total market. This implies ample headroom for Signet to grow in the long run.
