• While "jewelry giants" like Jared and Zales have reported weak sales, millennial-run businesses with vibrant Instagram presences are shaking up the engagement-ring market and reshaping the multibillion-dollar industry.
  • The platform has both created and responded to a demand for an immersive, personalized, and instantaneous shopping experience.
  • Celebrities' and influencers' Instagram posts about their rings have affected shoppers' preferences and determined designers' marketing strategies.
  • Mom-and-pop retailers have struggled to keep up as e-commerce surges.
  • Visit Insider's homepage for more stories.

The photo on Stephanie Gottlieb's Instagram features the 32-year-old jewelry designer's perfectly manicured fingers in front of a blurry cerulean Pacific Ocean. In focus are her rings — most notably, a large cushion-cut diamond piece.

"Picture perfect," she captioned the photo, adding the ring and seashell emojis. The snapshot from her anniversary vacation is one of many out-of-office moments that Gottlieb shares on her high-end jewelry brand's account.

Stephanie Gottlieb Fine Jewelry, which began as a one-woman operation in 2013, has grown to employ 11 people who operate out of a New York City showroom. Gottlieb said the company's success and proliferating sales were largely due to leveraging Instagram.

"Year after year, our sales have grown in correlation with our social-media following," she told Insider, noting that Instagram is the business's only marketing to date.

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A 328,000-user following and occasional shout-outs from influencers like Girl with No Job (aka Claudia Oshry) and the "Real Housewives of New York City" alum Bethenny Frankel suggest continued momentum for the business.

Gottlieb is not the only jewelry entrepreneur adapting to an increasingly Instagram-dependent world.

Nicole Wegman founded her luxury-jewelry business, Ring Concierge, six years ago, with a millennial audience in mind — and a marketing strategy to match.

"Social media has been instrumental in the growth of the company," she told Insider.

Wegman said her goal to create an engagement ring for millennials extends beyond the product itself — she aims to provide the shopping experience she believes her generation would want.

Wegman knows her online audience's aesthetic. The designer's Instagram posts, which receive thousands of likes and comments, typically feature engagement rings and Wegman's signature deep-red nail polish against a background of travel hot spots and a 'gram-worthy showroom. The Ring Concierge account has accrued 285,000 followers and even celebrity clientele, including the "Bachelorette" stars Joelle "Jojo" Fletcher and Jordan Rodgers.

The strategy and growth of both businesses, in contrast to jewelry giants like Kay, Zales, and Jared that last year reported weak 2018 holiday sales, point to how Instagram is reshaping the multibillion-dollar engagement-ring industry — an industry where, as Wegman says on her website, the line between retailer and influencer is blurring.

Prospective engagement-ring buyers are learning through Instagram.

Retailers say Instagram now serves as a primary search tool for people in the market for an engagement ring. Beyond that, the platform has become a bottomless source of information and inspiration for prospective buyers.

"What we see now is people are starting their journey by searching inside of Instagram," Johanna Tzur, the chief marketing officer of the diamond bridal retailer James Allen, told Insider. "So we create differently today knowing that someone might start there and it's a first impression.

"Our posts and stories need to vibe with the other posts appearing in their personal feed, be it a friend's breakfast plate or an influencer's showcase of his or her favorite goods," she said, "so we feature our own customers' content as much as possible."

Shane O'Neill, vice president of the jewelry-marketing firm Fruchtman Marketing, said he advises his clients to take advantage of the platform's power to educate followers.

"The big draw to social in the first place is access to information," he told Insider. "Instagram allows people to search for inspiration and see things they like and engage with, things they may not have been previously aware of."

As a result, O'Neill said, the more educated consumer is turning to custom design and high-end brands.

Lab-grown diamonds are on the rise.

One trend that shoppers on Instagram are learning about is the lab-grown diamond, an alternative to a mined diamond that can come along with ethical baggage at a steep price.

Companies like Brilliant Earth are cultivating massive Instagram followings — the company's account has 634,000 followers — and are educating prospective customers about the financial and moral benefits of pursuing a lab-created option.

"Lab-created diamonds have become a large and growing part of our base," Tzur said, "because people understand that the technology has gotten so good that visually and optically these diamonds that are made in a lab are the same in chemical composition."

Kate Austin, an influencer who developed an extensive YouTube and Instagram following for her LGBTQ activism and content — and who appeared on "The Ellen Degeneres Show" after a tweet about her engagement went viral — has used her platform to tell followers about lab-grown diamonds. Austin posts frequently about her partnership with Reeds Jewelers and its diamond-concierge service, which she said sourced diamonds for her and her fiancée that fit with their values of sustainability and social consciousness.

"I'm still able to get my diamond and not feel bad about it," Austin told Insider. "That was a huge thing for me."

Celebrities and influencers are dictating trends.

While designers try to prioritize their individuality in the jewelry space, there's no denying the impact of social media on their engagement rings.

"If a celebrity or a major blogger gets engaged with a really specific style, we will see demand for that immediately," Wegman said, citing the model and actress Emily Ratajkowski's Instagram post of her distinctive two-diamond engagement ring as an example.

"It's a super-specific ring that isn't the type of ring we would normally design here, but we definitely got requests for it right away — like, right away," Wegman said.

The obvious power of influencers is evident in retailers' prioritization of developing organic partnerships with Instagram personalities.

"We have a team that is basically, like, all day long watching what's going off on [social media] within a certain demographic set which reflects ours," Tzur said.

James Allen, she added, has developed a formula assigning a value to an influencer's following and engagement rate to determine what, exactly, the influencer can be gifted.

An important part of the influencer relationship, Tzur said, is providing an authentic experience.

"We try to give them the exact same experience that someone would have coming on our site," she said — adding that, of course, influencer status comes with extra perks like VIP access to one of James Allen's founders.

The ring-selection process, however, is virtually the same. "We're starting with the consumer and asking, 'What would you want?' 'What's your dream ring?' or, if it's working with an influencer's partner, 'What is she like?'" Tzur said. "And these are exactly the questions that our customer-service team would ask."

Austin, who has 148,000 Instagram followers, recalled a similar process when partnering with Reeds for her fiancée's ring. "We never discussed a discount to begin with; I never knew what it was going to be until they told me the final price," she said. "I think that we just created such a good relationship between the two of us, and we enjoyed working together."

Wegman said Ring Concierge chooses partnerships carefully, working only with influencers who are likely to engage with the brand outside of a partnership and have followings that mirror the business' target audience.

"You can blow through huge budgets on an influencer campaigns and not see a return," she said. "We're finding more benefit in influencers that may have smaller followings but their followers are more in line with our customer base in terms of life stage and taste level."

Instagram is helping partners stay informed about their preferences.

Buying an engagement ring has become a collaborative process for many couples, aided largely by Instagram.

"The vast majority of appointments are couples coming in together," Tzur said.

Brent Neale, another jewelry designer, said she increasingly sees men who know what their partners are interested in — often because of Instagram content their partners alerted them to.

"I always wonder how they found out about us," she told Insider. "They tell me, 'She sent me DMs of these things of yours that she likes.'"

Gottlieb recommended showing photos of desired ring styles to a significant other before starting the purchasing process. In a recent Instagram Story Q&A, she recalled saving images to a folder on her computer to help nudge her now-husband in the right direction.

Shoppers want a personalized, immersive experience — and they want it fast.

Retailers are facing a challenge to appeal to many millennials' preference for experiences over things while catering to their expectation of immediate "shopability" of products. Thus, they have to marry experiential shopping with seamless customer service via social media.

"When we create, we're creating things that can be immediately shopped and learned about and done in a way that's distinctive," Tzur said. "On the one hand, people want experience, but on the other hand, they just want 'click, buy, cart, comes to me now.' And I think that's only going to continue getting more pronounced."

Offering an authentic experience largely determines James Allen's Instagram account's aesthetic. "We favor posts that we think will make our followers want to be there, in that precise moment, wearing our jewelry and experiencing our products," Tzur said. "This calls for genuine moments in natural settings, perfectly imperfect snapshots in time, where our product is part of the action."

Wegman described Ring Concierge's social-media strategy as inviting her followers to experience her lifestyle through the brand. Her styled Instagram posts, shot on an iPhone, chronicle her daily appointments and travels.

"We show what I'm doing day to day, where I am. If I'm in Italy, all the pictures that week are real-time taken from Italy," she said. "And so our followers feel very connected to me, and it also helps them connect with the brand. It's also a way for them to almost see themselves in the brand."

The second branch of her strategy caters to buyers' need for expediency — which largely means answering Instagram DMs to create an in-store experience via a virtual setting where the shopper is most comfortable.

"If that's the way they're wanting to connect with us, we certainly want to be able to get back to them in real time," she said. "And we want to get back to them on the channel they're comfortable chatting on."

Mom-and-pop retailers are disappearing.

The explosion of e-commerce — and the social-media literacy required to run a business — has damaged many of the smaller, independent retailers in New York's historic diamond district, the stretch of 47th Street between 5th Avenue and 6th Avenue.

Todd Ingwer, a designer who works for his family business, Leo Ingwer, on 47th Street, credits social media with the industry's largest changes.

"If you haven't stayed up on it and you haven't taken it seriously, well, you walk down 47th Street and you see a lot of empty booths," he told Insider.

The fine-jewelry industry appears to be suffering beyond the diamond district. The Jewelers Board of Trade reported last year that 852 US jewelry retailers closed in 2018. By the jewelry-industry analyst Edahn Golan's calculations, fine-jewelry retail sales amounted to $63.8 billion in 2017, with a 60% drop in annual growth since 2000.

By contrast, Ingwer said, some entrepreneurs are taking advantage of changes in the market.

"You're seeing a lot of new companies create what I think is almost an entirely new genre of retail in this industry," he said. "And those who do it well are definitely reaping the benefits, especially those who did it well and got on board early."

Leo Ingwer has effectively adapted to the social-media era by leveraging platforms' space for storytelling, he said.

"Through social media, I can communicate our company story directly to the end consumer," Ingwer said. "So that they understand who we are and what we're about and what makes us remarkable."

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