Direct-to-consumer jewelry brands are dusting the cobwebs off a $325 billion industry
Ecommerce brands have hacked the jewelry industry to lower prices and improve quality. How do they do it?
This month has been a big one for direct-to-consumer jewelry brand Mejuri. In total, it has now served 1 million customers, and sold 2 million pieces of jewelry to them. The company also opened its first store in the U.K.
Founded in 2013, Mejuri riffs on the usual concept of lowering prices by letting consumers shop straight from the source. It was one of the first to do so in the notoriously stuffy jewelry space, and has influenced a wave of founders to follow in its footsteps.
In the U.S., Rara, Aurate and Kinn are examples of businesses selling fine, everyday jewelry to customers online, while across the pond, London company Kimai and Stockholm-based brand Mannström are bringing the model to European customers. In the process, they are giving the $324.6 billion global jewelry market a much-needed update.
“The diamond and fine jewelry industry is a very traditional industry that has been doing things in the exact same way for centuries,” says Jessica Warch, the cofounder of Kimai. “It wasn’t talking to us in terms of approachability and transparency.”
As well as price, that issue of transparency is a big focus for the online jewelry brands, who want to offer quality pieces while avoiding participating in a supply chain that is rife with human rights abuses. Kimai, for example, uses lab-grown diamonds and recycled gold to create its pieces; similarly, Scottish jewelry brand Behind Bracken uses reclaimed and recycled gold and silver.
It’s a change consumers are clearly happy to see. During the pandemic, while the jewelry industry as a whole has struggled, Kinn (which boasts a transparent and traceable supply chain) says its sales rose 30% month-on-month. By 2025, McKinsey reckons online-first jewelry brands will account for 20% of the branded jewelry market.
While none of the jewelry brands mentioned here are selling pieces that could be considered cheap — a single hoop earring from Mejuri costs $55 — they are certainly more affordable than legacy brands like Cartier or Tiffany's.
The jewelry industry has done a good job of convincing customers that more expensive equals better, Warch says. In reality, the jewelry retailers maintains sky-high profit margins of up to 50%.
“The industry has crazy margins. By being direct-to-consumer — it might sound a bit cliche — that’s how we’re keeping our prices fair,” she explains, adding that for a brand like hers with lower margins, selling wholesale should be thought of as a marketing activity rather than a revenue-generating one.