This week, a look at the ongoing evolution of the fine jewelry market. Scroll down to use Glossy+ Comments, giving the Glossy+ community the opportunity to join discussions around industry topics.
First lab-grown diamonds, now vermeil.
The democratization of the fine luxury market continues, as 108-year-old Helzberg Diamonds introduces demi-fine, or gold-plated, jewelry to its product assortment. The move comes through a new partnership with digitally native jewelry company Aurate, as the latter inks its first wholesale deals in sync with a new funding round.
“Making sure everybody understands what vermeil is [will be important],” said Sophie Kahn, co-founder and CEO of Aurate, regarding the marketing of the brand’s Helzberg Diamonds collaboration. “It’s real gold on top of sterling silver, as opposed to just looking like gold, like you would get at a [vendor] on the street.”
She added, “Quality for price has always been our mantra. And that’s helped fuel our growth, especially in today’s economy.… [We sell] real diamonds and real pearls, but nothing costly. And vermeil lasts, especially our vermeil.” The prices of Aurate’s core assortment range from $40 for a pair of vermeil hoop earrings to $18,000 for a diamond bezel tennis necklace.
Consumer behavior around jewelry investments is changing, thanks to new technologies and more accessibility to pieces that can be worn in the shower without tarnishing. In the last 10 years, fashion jewelry brands including Kendra Scott and Gorjana have launched demi-fine and fine jewelry collections, subsequently earning first-time customers trading down from legacy brands. Meanwhile, since 2015, digitally native brands including Aurate, Mejuri and Dorsey have hit the market by storm, proving their theory that women want to buy quality jewelry for themselves. And jewelers are increasingly seeing the value of catering to more customers. For Ring Concierge, which sells $5,000 engagement rings, an $898 tennis bracelet is its best-selling style. Instagram drives 70% of the company’s total sales.
Kansas City, Missouri-based Helzberg Diamonds was reportedly the first nationwide jeweler to sell lab-grown diamonds, starting in 2017. And in March, with the launch of its Rêve lab-grown diamond collection, it became the first national jewelry retailer to offer SCS-007 Jewelry Sustainability Standard-certified diamonds. Helzberg Diamonds, which has been owned by Warren Buffett’s Berkshire Hathaway holding company since 1995, operates more than 200 stores with a large presence in the Midwest. Along with its e-commerce site, 30 store locations will carry the exclusive “Laure by Aurate” collection starting on August 9. Laure by Aurate is made up of 111 styles, ranging in price from $100-$1,300.
“The collaboration presented a unique opportunity to expand our reach with younger, fashion-forward and self-purchasing women,” said Julie Yoakum, president of Helzberg Diamonds. “Plus, it supports our vision of earth-friendly jewelry and helps to broaden our product assortment, as millennials and Gen Z become a more significant part of the jewelry market.”
Building relationships with shoppers ahead of the engagement ring-shopping phase is also a goal, she said. And Aurate’s loyal customer base helped seal the deal.
According to Kahn, in the last year, Aurate’s customer acquisition costs have decreased 30-35% year-over-year, owed to word-of-mouth becoming the top sales driver. The brand’s revenue has increased by more than 50%, and its average order value has seen a boost. The brand is profitable.
“A lot of brands [experienced] a Covid bump [in sales]. We had that — but for us, they didn’t go down afterward,” she said.
Now, armed with experience building a successful online business and a fresh Series B funding round, announced on Friday, Aurate is hitting the gas on growth. The round brings its total funding to $25 million. It includes buy-in from existing investors, as well as new contributors with wholesale expertise. The investment is going toward newly hired or promoted C-suite members, including CMO Audrey Fisher, COO Josh Jewett and CFO Alexandra Goldberg. Plus, it will fuel planned improvements to the brand’s e-commerce channel and facilitate its wholesale expansion play.
Since opening in 2015, Aurate has opened and closed a handful of branded stores. It started with two in NYC that closed early on in the pandemic. Then, between December 2021 and February 2022, it teamed with retail platform Leap to open locations in San Francisco and on New York’s Madison Avenue. All the while, 95% of its sales have been made through its e-commerce site.
“We’ve always believed in the power of retail,” said Kahn. “But we’d sell online in a day what we’d sell in a store in a month, and the stores required more work. Stores only make sense if you have, like, 50 of them.” Still, she said, she’s not ruling them out; Aurate may someday open a flagship “as a branding opportunity.” Competitor Mejuri, meanwhile, has 24 stores and does not sell through wholesale channels.
For more bang for its buck and required efforts, Aurate is teaming with retail partners for the first time. As with Helzberg, it’s entered a partnership with Macy’s that includes exclusive Aurate-crafted styles based on the chain’s customer preferences. More than 140 pieces with a median price of $500 will be offered on Macys.com by the end of this month and carried in close to 170 stores starting in September. Between the two partnerships, Aurate’s presence will span 200 store locations.
“Our customer tells us they’re looking for trending, compelling jewelry items, and Aurate is an authority in the space,” said Julie Walsh, svp and gm of center core and beauty at Macy’s. She said the jewelry collection, dubbed “Audrey by Aurate,” now includes earrings, stackable bracelets and stackable necklaces, but will be refreshed seasonally.
For its part, Macy’s is in the middle of an attempted glow-up, with a focus on elevating its private-label fashion and home brands. In July, it introduced On 34th, a more sustainable, modern-fit apparel brand targeting women ages 30-50.
“Our focus is helping the customer own their style,” Walsh said. “And that could be [through products] at an opening price point all the way up to luxury.”
In June, in step with reporting a year-over-year sales decline of 7% for the first quarter, Macy’s significantly lowered its full-year financial projections.
“Macy’s is America’s wholesaler; they know how to do retail, and they’re very much experts in the in-store experience. Plus, they’re everywhere,” Kahn said. “And Helzberg is an expert on fine jewelry. They’re the perfect two partners.” She also noted the retailers’ wealth of data that will be leveraged to ensure a spot-on assortment, in terms of meeting customer demand.
Meanwhile, the retailers are poised to gain from Aurate’s jewelry e-commerce expertise. It’s worth noting that the global online jewelry market was expected to grow by $19.9 billion in the five years ending in 2024. For marketing, Aurate leverages Meta, regularly updating creatives based on traction, as well as influencers and at-home mailers, Kahn said.
Aurate has found prior success with “meaningful” collaborators, including Kerry Washington and Michelle Choi. And Helzberg has experience teaming with brands to reach a fashion consumer. In 2021, it launched a long-term partnership with British designer Jenny Packham.
While setting up the Macy’s partnership was more “turnkey,” with Kahn working with the head buyer, she called the Helzberg process more in-depth, involving collaboration with Yoakum and CEO Brad Hampton. Along with designing the included pieces, Aurate ensured production met its own sustainability standards and developed marketing elements including featured copy and photography.
Aurate’s team also drove the look of in-store displays, with the Helzberg setup done in a contemporary dark blue and the Macy’s display focused on green, pointing to the collection’s sustainability. The marketing messaging for the collections will center on the styles’ quality and sustainability, as well as women’s empowerment.
Both partnerships follow a wholesale model, where the retailers buy the pieces they sell. And neither has an end date.
As for the planned changes to Aurate’s website supported by the new cash injection, Kahn said to expect new speed and features, including a loyalty program.
“We want to continue to stay at the forefront of [the jewelry industry],” she said. ”You hear that it gets harder to continually grow more than 50% [annually], but it’s what we want to do.”