Engagement ring spending in the United States rose 9.2 percent in 2022 year-over-year, according to the latest data from The Wedding Report, and another 2 million-plus weddings are likely for 2023. As a result, there are going to be lots of young couples walking into jewelry stores with that gleam in their eyes, ready to buy.
Depending on the store and location, the diamond engagement ring sale can represent 60 percent to 90 percent of a jewelry retailer’s gross revenue. It's also the primary point of entry for younger consumers who are making the first jewelry purchase of a lifetime. Therefore, getting it right the first time can ensure that both partners in that young couple will become a customer for the retail jewelry store for their next 40 years of discretionary spending.
Not surprisingly, the fundamental objective of every jewelry retailer is to have the right diamond inventory in-store, at the exact moment that next couple in love comes through the door.
But that’s not so easy to do.
For a multi-store jewelry chain, the cost of owned diamond inventory can be prohibitive. And while there are plenty of opportunities for consigned diamond inventory from suppliers, it's usually the wrong fit and price for a store’s specific requirements and its target consumer demographic.
Today, one of Berkshire Hathaway’s premier luxury brands, retail jeweler Ben Bridge, is using a unique subscription model to solve this inventory paradox and guarantee it has the optimum diamonds in its showcases, in each store, every day of the year.
This new diamond subscription inventory technology was developed by a Canadian company called Dialog.
Ben Bridge subscribes to its ideal inventory amount, anywhere from $50,000 to $5 million per store. Dialog’s experts and proprietary algorithms analyze sales and inventory levels to curate the exact merchandising mix for each specific Ben Bridge location and its target consumer demographic. Dialog takes on all the inventory and capital risk, allowing Ben Bridge to use those funds elsewhere.
The retail jewelry sector is an uber-competitive space where profit margins have been compressed with the rapidly increasing expansion of jewelry e-commerce websites. The marketing cost of acquisition is very high, in a space where the search term “diamond engagement ring” is one of Google’s most expensive and most profitable in its pay-per-click business. Every extra dollar a retailer can add to its marketing spend helps differentiate it from the competition.
In 2022, Dialog added a data scientist to its team to provide comprehensive analysis to assist retailers in optimizing the diamond inventory in their subscription. The results were significant, with 88 percent of retailers experiencing a year-over-year increase in turnover with their Dialog product and an average turnover increase of 27 percent.
With the Dialog platform, retailers like Ben Bridge have access to a unique, online portal to select or change any inventory in real time. If any diamond in its inventory isn’t turning, the retailer can swap it out quickly. With Dialog in place, some retailer’s diamond inventory turn went from less than 1x per year up to 1.5 to 2x per year.
“We really try to have the inventory on hand that our customers want to see,” notes Angela Hope, vice president of merchandise at Ben Bridge Jewelers. “Dialog helps us always have the ideal inventory in the stores all the time, which is a wonderful service we can offer our customers.”
So, when that next young couple walks into a Ben Bridge store, there’s a high probability they’re going to be walking out with a bit more than just love in their hearts.
Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.