It’s been three years since the pandemic threw a monkey wrench into the more or less stable wedding market and disrupted the evergreen bridal jewelry business that fine jewelers depend upon.

From 2000 to 2019, some 2.2 million weddings took place each year on average. Then couples hit the pause button with lockdowns in place, and weddings dropped to 1.7 million in 2020 only to rise to 1.9 million couples marrying in 2021. Then the floodgates opened with some 2.6 million couples marrying in 2022, according to preliminary estimates from The Knot, the wedding planning site.

The jewelry market has followed a similar up-and-down trajectory, dropping to a low of $59 billion in 2020 that it hadn’t seen since 2014. Then it came roaring back with jewelry consumption up 55% to reach $91.5 billion in 2022.

But it’s been a brief reprieve for jewelers. The dating scene was disrupted by the pandemic too. Since engagements typically follow a good three years after couples start to date, that pre-engagement period got delayed. At the same time, inflation and economic uncertainty factored against them making a long-term commitment. Couples hit the pause button again.

Weddings are an expensive proposition – averaging $30,000 in 2022, per The Knot – and the engagement ring purchase starts the ball rolling, averaging about $5,800 last year.

That’s the proverbial prize ring every jewelry retailer is after because, if done right, a jeweler can establish a lasting relationship with couples, so they will return again and again for jewelry purchases throughout their lives together.

Set against this backdrop of more turmoil in the jewelry business, here’s a look at how three major jewelers are taking different approaches to grab that first all-important engagement ring purchase.

Signet will stay on course and ride it out; Brilliant Earth will push aggressively through and grow despite the headwinds; and Kendra Scott has found an opportunistic back door to enter the bridal jewelry market.

Signet Will Hold The Line

As the nation’s largest jewelry retailer and market share leader with its Kay, Zales, Jared, Blue Nile, James Allen, Diamonds Direct banners, among others, its fortunes are tied to the ups and downs in the bridal market – bridal jewelry is 50% of Signet’s business compared with 20% in the overall fine jewelry market.

And it’s been feeling the pain of what it calls an “engagement gap” that is a delayed reaction from the pandemic’s dating disruption. In Signet’s first quarter fiscal 2024, ending April 29, 2023, revenues were down 9.3% over previous year, with much of that attributed to fewer engagements.

Google Trends confirms the engagement gap with searches for “engagement rings” dropping steadily since early 2021, and it currently stands nearly half what it was in early 2019.   

Further, Signet foresees continuing weakness in the fine jewelry market through the end of the year with the company guiding year-end revenues to range from $7.1 billion to $7.3 billion after topping $7.8 billion in fiscal 2023, effectively a 6% to 9% decline. And the engagement gap gets much of the blame, which isn’t expected to start to turn until later this year, with an expected rebound by fiscal 2025.

But rather than change course for short-term gain, Signet will stay on course, counting on its current strategy to benefit the company long term. Kay president Bill Brace explained its bridal market strategy in the company’s recent investor day presentation.

“Quite simply, it is the emotional and financial gateway to the jewelry category. This makes it the fountainhead for the relationships we cultivate to maximize the lifetime value for our customers,” he said.

Noting that the bridal customer spends about seven times more on average for their purchases, he shared how this purchase is a super-charged emotional event and that super-charges repeat purchases down the line.  

“The bonds we create translate into purchases for other life events and multiply the value of the original purchase. When the anniversaries and birthdays roll around, or the birth of a child occurs, the bridal customer has a higher propensity to celebrate with jewelry,” he said. “They do this because they have embraced the emotional significance of jewelry to celebrate and enrich life’s most important moments and relationships.”

And that’s the ticket. “The immense trust and joy we create through the bridal process position our banners to be the lifetime destination for all of life’s celebrations that we commemorate with jewelry. This is why bridal is so important to Signet.”

Seeing a $600 million opportunity to grow bridal long-term, he concluded, “The headwinds we’re encountering today will lead to a strong boost in the bridal market in the coming years, one that we are prepared to capitalize on before it settles back into a steady low single-digit growth profile.

“Consistency is a rare thing in retail. And it allows for exceptional planning, forecasting and confidence that the capital we’re investing to drive market share gains, will reward our customers and our shareholders alike,” he concluded.

Brilliant Earth Is Battling Headwinds By Leaning Into Them

Digitally-native Brilliant Earth, founded by Beth Gerstein and fellow Sanford University classmate Eric Grossberg in 2015, became one of the few publicly-traded jewelry companies in 2021. It now faces the same headwinds as Signet in the bridal jewelry business.

Its net sales of $98 million in the first quarter ending March 31, 2023, were down 2.3%; however, total orders were up 10% though average order value declined by 11%.

And even though it is a fraction of the size of Signet – Brilliant Earth’s $439 million in revenues last year is just a shade above Signet’s $377 million net income – it is aggressively expanding its footprint to position the brand as the best place for next generation couples to make their bridal purchase.

As a fresh face in the jewelry retail market, it has the once-in-a-lifetime opportunity to make a good first impression with young couples who may see such long-established destinations like Kay, founded in 1916, or Zales, founded in 1924, as their parents’ jewelry store, despite Signet’s efforts to change that perception.

And another advantage: Brilliant Earth’s asset-light showroom model looks nothing like a traditional jewelry store filled with glass cases and inventory that can overwhelm customers with too much to choose from.

Its showrooms are designed to communicate from every brick-and-mortar touchpoint that Brilliant Earth is where couples can create unique, personalized engagement and wedding rings.

This custom design service is something Signet’s banners offer too, but its stores may not be so conspicuous about the customization option. On the other hand, Brilliant Earth’s are quite upfront about it.

Since going public, Brilliant Earth has more than doubled its number of showrooms, from 14 at the end of 2021 to 31 today and has three more slated to open this summer in Miami, Chicago and Walnut Creek, CA.

These are all ground-floor locations in prime open-air shopping environments where next-generation shoppers gather, like its most recent opening in the Fairfax, VA. Mosaic district, just a few miles from the mammoth Tyson’s Corner Mall and a spot Bloomingdale’s picked for its first small-format Bloomie’s store.

“We have a lot of initiatives underway that are creating momentum for the brand. We’re continuing to release new products that resonate with the younger generation. We will continue to gain share regardless of the volatile environment that we are in,” CEO Gerstein confidently shared with me.

The company is holding fast to its earlier guidance that net sales would reach $460 million to $490 million, in the 5% to 12% range, after it exceeded first quarter’s conservative net sales guidance between $94 million and $96 million.   

Kendra Scott Finds A Back Door

Alongside Brilliant Earth’s new Mosaic showroom in Fairfax, VA is a Kendra Scott boutique, one of its 130+ stores and pop-up locations. In addition to its own stores, Kendra Scott jewelry is sold at Neiman Marcus, Bloomingdale’s, Nordstrom, Dillards and some 850 specialty boutiques.

But it’s in the Kendra Scott boutiques where the full-on branded experience is offered, featuring its Color Bar where customers can pick their own setting and gemstone that is instantly crafted into a finished piece before their eyes.

This approach works perfectly for the brand because it allows the customer to be in the driver’s seat of the final design, making the most of semi-precious stones paired with metalwork.

While it started in the women’s fashion jewelry sector, it has branched beyond into what it calls demi-fine sterling silver and 18K gold vermeil. It also offers 14k gold, watches and a men’s collection, all at accessible price points.

Part of the natural evolution of the brand has been the introduction of engagement rings and bridal jewelry featuring lab-grown diamonds, but that opportunity arose organically after establishing a foothold serving bridal parties with matching pieces for the big day.

It was an “Always the bridesmaid, never the bride” story until Kendra Scott introduced engagement rings.

“Our brand has always been a great destination for bridal parties. The bride would bring her entire bridal party to our Color Bar to get their matching earrings and necklaces, plus we had earrings, bracelets and necklaces for the bride. Still, the couple couldn’t get their engagement and wedding rings with us, so we changed that,” shared CEO Tom Nolan.

“Now we can take care of brides, grooms and the full bridal party with all their jewelry, soup to nuts,” he continued. “We dipped our toes in the water very carefully to make sure we could prove ourselves in bridal before really turning on the faucet in a bigger way.”

Today it’s built a bridge over the current engagement gap. “We continue to be cautiously optimistic about 2023,” he shared. “We had our best holiday season ever from a topline point of view,” which the company confirmed was an uptick in the high-single digits.

“We’re being smart about how we think about our balance sheet and operating expenses in case the headwinds continue,” Nolan said. “But we have such a high-value proposition that we don’t see downturns like other brands might. Customers feel comfortable buying from us because they can get more bang for their buck.”

Lab-Grown Diamonds Further Complicate The Bridal Jewelry Business

The introduction of lab-grown diamonds adds another layer of complexity to an already complex bridal jewelry market. Originally, the jewelry establishment thought lab-grown diamonds wouldn’t get traction in the engagement ring market, which would be forever reserved for natural mined stones.

But all that’s changed as demand for lab-grown diamond center stones continues to take share from mined. The Knot survey found 36% of couples chose a lab-grown diamond for their center stone, up from 18% in 2020.

And demand is getting stronger as couples face the challenge of wedding planning after an extended period of rapid inflation, since a larger two-carat LGD stone can be had for about 30% less than a one-carat mined stone, according to jewelry industry analyst Edahn Golan.

And that price advantage is pulling demand for more lab-grown stones into the supply chain. Golan’s research found the unit sales of loose lab-grown diamonds has grown from 14% share in 2020 to 47%, as of February 2023.

However, the engagement gap persists, as Golan’s research also reveals. Diamond-engagement ring unit sales declined by 12% in May compared to last year, with much of that decline in rings set with mined diamonds.

But when the engagement gap starts to close, more newly engaged couples will be searching for lab-grown diamonds than ever before, and all three jewelry retailers will be ready for them, both Signet and Brilliant Earth offering lab-growns side-by-side with mined diamonds and Kendra Scott having hooked its wagon early to lab-growns.