Monica Rich Kosann: Transformation and Growth in Tough Times

“Our technology spend is well into the mid-to-high six figures,” said Rod. “That’s a lot to spend even for a mid-size company. We are not a David Yurman, but we are approaching that mid-level within the fine jewelry space…We’ve put a tremendous amount of resources to reinventing our whole online experience. We re-platformed our site with Shopify. That gave us the ability to scale and make the consumer experience online really strong. We totally redesigned and rebuilt the site, and we started a whole range of initiatives for digital growth.”

The new enamel locket collection in gold vermeil. 

Sitting on the outdoor deck of their new, 4,500-square-foot headquarters in a converted factory building in Fairfield County, Conn., the Kosanns said their company has been undergoing a two-year-plus “transformation,” becoming technology-, data- and e-commerce-driven while broadening its product offering to be more accessible. There’s been a 35 percent increase in sku counts since 2018.

Fifteen years ago, the business started modestly, with a tiny gift shop selling image cases and frames on the decorative home floor at Bergdorf Goodman, and not long after launched jewelry, a web site and wholesale distribution. More recently, several freestanding shops were added.

Monica Rich Kosann is currently primarily a direct-to-consumer fine jewelry company while maintaining the wholesale distribution to Bergdorf’s, where the shop has grown to 400 square feet; Neiman Marcus, and independent jewelers. There’s still the 200-square-foot, glass-enclosed shop on the main floor of The Shops at Columbus Circle in Manhattan. Due to the challenges its compact size poses amid the pandemic, the shop has been closed but the Kosanns expect it will reopen in a matter of weeks. “We want to make it work. The world is talking more and more about the productivity of smaller footprints,” said Rod.

In April 2019, the Kosanns closed their only other freestanding shop, which was in the Century City mall in Los Angeles. It wasn’t getting the traffic hoped for. During the pandemic, the Kosanns have been able to maintain 80 percent of the 20-member staff full-time; the rest, part-time.

“Our brand has pivoted to become so technological, but we are still keeping that warmth and that connection with our customers,” said Monica, who wears her diamond owl charm necklace amid her “neck mess” with a slim locket and a design-your-own necklace. “My daughters and I all wear the owl critter, for wisdom. I call us the three owls. We are very close and we never take them off. I totally sleep and shower in it. It’s our connection.”

Kosann, who is also a photographer, designs her lockets, necklaces, rings, bracelets and charms with sentimental inscriptions. “They’re storytelling keepsakes to empower women, to inspire women. That’s very important to me.”

“We actually trademarked the phrase ‘because jewelry should not just be beautiful, it should empower and inspire you.’ A locket creates an emotional connection with the customer because of what they put in it. With all of our collections, they have meaning, and because of that we also wanted to start creating experiences to strengthen that emotional connection we have with our customers,” Rod said, referring to the recent technology and web site investments.

Last month a new collection of stackable poesy rings, starting at $48, was introduced, increasing the opening price point options for customers. Also new for fall is a “locket X color” collection, which are in enamel and gold vermeil, on short black steel chains, starting at $395.

“We were always working in sterling silver and 18k gold, but going back three years, $2,000-plus was the opening price in gold. And we didn’t have a lot of sterling silver that was under $300 or $400. So part of the transformation has been really leaning into the opening price points of both those categories. We became more accessible as a brand to more people, we knew more customers and younger customers wanted to participate in the brand. Now we have as many customers between 25 and 45 as we have 45 and up, and all that happened in a very organic way,” Rod said.

On the more expensive side of the assortment, the company offers, for example, a sapphire locket with a diamond halo on an 18k gold chain for $10,000. There’s also a one-of-a kind crystal opal locket, priced $100,000. But as Monica stressed, “We are not selling flashy diamonds or big watches.”

Rod Kosann and Monica Rich Kosann 

To get a better handle of what to sell, being more data-driven “informs our decision-making on an operational level,” said Rod. “We learn about what kind of inventory allocations to make. Being a direct-to-consumer company, we’re getting a lot of our own data in real time. Previously, we would have to look at things more on a past-year basis. Now, because we can see things in real time, we can make decisions based on what happened the week before.” Better design and merchandising decisions are being made, he said. “We also look at what ads are performing best. We look at the data behind a lot of digital marketing. It is amazing because we can pivot on a weekly basis; we give our wholesale partners a lot of digital marketing tools to use every month — the ones we know are performing the best.”

The company has been aggressively e-mailing and using social media. “It’s not only a selling thing — we have great blog articles,” Rod said. “We talk about our values, our quality, but we really stepped it up over the last 18 months. We call out what goes into every aspect of the jewelry, even down to the clasps on our chains. There’s been a lot of communication.”

The company has also been calling out its year-long evolution into a certified B Corporation, one of just 3,600 on the planet. “We ended 2019 with 20 to 30 percent of our gold being recycled. And last month, we crossed the threshold of 50 percent-plus on the recycled gold.” Other factors enter into being B Corp certified, including how employees are treated. “We started a silver recyclable program as well in September. By the end of 2020 our goal is to be around 20 percent recycled silver…This is all one more way to make an emotional connection.”

While wholesaling this year has been “very disrupted” at Bergdorf’s, traffic at the shop has been “slowly coming back,” said Rod.

On the brighter side of business, he said his company “went into this health crisis experiencing 100 to 200 percent growth in our web business, and we have been really fortunate that has kept going strongly.” He also said the company is profitable and has been seeing a 30 to 40 percent customer return rate, but he declined to disclose the company’s volume. The Kosanns have started to seek outside strategic capital to accelerate growth.

Special-edition lockets with vintage diamonds. 

For the future, the Kosanns are considering men’s jewelry, customization of messages on the rings, international distribution, engagement and bridal jewelry, and possibly additional brick-and-mortar shops.

“We just don’t want to rush to another category or dabble in it until we are ready to make a real business out of it,” said Rod. “We want to be careful. We have a brand in a place where we’ve been able to transform and pivot. But what we are about as a brand is clearer than ever — emotional connection, empowerment, inspiration and accessibility.

“Transforming to a digital-first, direct-to-consumer business that balances with the traditional distribution, that’s been the mission,” said Rod. “It’s really hard to do. It’s a whole different way of thinking. If you are a wholesale business, you are separated from the consumer so you are not necessarily privy to the same decision-making process. And then in terms of the e-commerce, it requires a tremendous range of digital strategies to build the business.”

Source: Read Full Article