Online jeweler Brilliant Earth is taking its business to the next level by opening three new showrooms inside luxury malls in New York, Pennsylvania, and California. With these additions, Brilliant Earth's total store count will reach 37. While the company has previously focused on stand-alone stores catering to clients with appointments, these new mall locations aim to attract more walk-in customers.
Kathryn Money, Senior Vice President of Merchandising and Retail Expansion at Brilliant Earth, highlighted that the mall showrooms will also feature the brand's fine jewelry collection, which has been performing exceptionally well in recent quarters. Additionally, she noted that these indoor mall locations provide an opportunity to engage with customers and introduce the brand to new audiences who may not be familiar with Brilliant Earth.
Brilliant Earth is part of a growing trend among digitally native companies who are incorporating an offline component into their business models. According to a report by Coresight Research, approximately 45% of digitally native vertical brands have opened physical stores in recent years, including popular companies like Allbirds and Warby Parker.
The combination of physical retail and e-commerce has the potential to create a halo effect for brands. It can drive sales, reduce customer acquisition costs, improve margins, and meet the ever-evolving demands of consumers, as found by Coresight. Brilliant Earth has already experienced positive results in markets where it has opened showrooms, witnessing higher customer repeat rates and increased average order values.
As Brilliant Earth expands its presence into luxury malls, it aims to leverage the increased foot traffic to drive unplanned shopping trips and attract new customers. By providing a space for customers to peruse their collections in person, Brilliant Earth is confident in further enhancing its brand and building lasting relationships with a wider range of clientele.
Wall Street's Support for Brilliant Earth's Move into Brick and Mortar Stores
Wall Street analysts are optimistic about Brilliant Earth's expansion into physical retail locations. KeyBanc Capital Markets analyst Noah Zatzkin, who gave the stock an Overweight rating, anticipates that the company's plan to open at least 10 showrooms in 2023 will drive brand awareness and contribute to its top-line growth.
Although some may view Brilliant Earth's decision to open mall stores as counterintuitive in the era of the dying mall, it is important to note that malls are not entirely obsolete. In fact, certain mall concepts, such as open-air or luxury malls, continue to thrive. According to Coresight, top-tier malls experienced a 12% increase in foot traffic in 2022 compared to 2019, and occupancy rates remain similar to levels seen before the pandemic.
Brilliant Earth carefully selected three upscale malls for their new retail locations: Roosevelt Field in New York, King of Prussia in Pennsylvania, and Roseville Galleria in California. These malls house a range of luxury tenants, making them ideal for Brilliant Earth's retail strategy. The company's Chief Merchandising Officer acknowledged the importance of considering customer shopping preferences and leveraging mall traffic data in determining store locations.
As Brilliant Earth expands its physical presence, it recognizes that malls remain a compelling destination for customers. By strategically aligning with popular shopping destinations, the company aims to cater to customer preferences and enhance their overall shopping experience.