Pressure Makes Diamonds: Inspiring Love & Growth
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Show Notes: Gina Drosos
Gina Drosos on Signet Jewelers’ market and mission
Our mission and purpose are something that Signet team members hold very dear. We have the wonderful opportunity and privilege to be part of so many of people’s meaningful life moments. Every time I go into one of our stores, I hear a story of one of our jewelry consultants being invited to a wedding because they’ve become so close to the couple that they were helping. What’s become even more important to us over time is the idea of helping all people celebrate life and express love. Most people know us by our banner names Kay Jewelers, the number one jeweler in America; Zales; Jared; Piercing Pagoda; and jamesallen.com in the U.S. We also have People’s Jewelers, which is number one in Canada, and H Samuel and Ernest Jones in the UK. And what all of these banners have in common is that we have both a physical retail footprint of about 2500 stores and an ever growing digital footprint and opportunity to interact with customers online. We’re really there to bring our mission to life and to help serve them wherever, whenever and however they want to shop.
The jewelry category in the markets in which we operate is about a $90 billion category. We operate in what we would define as the mid market tier of that category, which is a little bit more than half, but we have a wide variety of price points within those price tiers. It’s really our aim to prioritize accessibility so that we are helping all people to celebrate life and express love. And we do that through high quality jewelry. That is also a great value for our customers, as well as through offering a variety of financing programs. Sometimes for a young couple buying an engagement ring, it might be the most expensive purchase they’ve ever made. And so we want to make that as accessible and easy for them as we can.
Gina Drosos on how she transformed Signet Jewelers
We started our transformation of Signet a little more than three years ago. That’s how long I’ve been the CEO, I’ve made it a point to partner with our employees across Signet: in our stores, in our strategy team, in our finance team, and all other functions, to diagnose what it would take to be not just the leading jewelry retailer – because we’re already the biggest – but to actually lead growth and innovation in the category. And what we found was that our assortment was not as modern as it needed to be, certainly not as appealing and modern as it is today. We were too reliant on old marketing models, very heavy TV holiday-focused marketing, and we hadn’t yet embraced e-commerce as a way for customers to shop for jewelry. Previously, our assumption was that jewelry is too expensive or too personal to buy online; you have to touch and feel it. So we set off to put a strategy in place to help us grow and actually debunk some of those myths.
It started with “customer first” as a key strategy. That was all about understanding our customers better and differentiating our different banners at the time. Kay and Zales and Jared were selling a lot of the same merchandise and overlapping each other, and we’ve teased that apart. So we’re now appealing to different customer groups, and that was about creating more distinctive and helpful and interesting content, no matter what part of the journey a customer is on. We also changed our marketing models to be year-round instead of focusing on holidays. People don’t just think about getting engaged in November. They’re thinking about that in March and May and even today, so we wanted to make sure that we were there to answer their questions and make sure that we were at the top of their minds when they were ready to purchase. so that that was kind of the first strategy customer first.
The second move was switching to an omni-channel strategy. We got into e-commerce, we rebuilt our web platforms and went from technology that was quite literally as old as the Internet to very modern technology so that we could improve on that. We put a Chief Digital Officer in place, and we’ve built agile teams who live, eat and breathe the job of making searching, browsing, and checkout on our websites a wonderful experience. We’ve added new technology like Virtual Try-on, where you can upload a photo of your hand and try on rings virtually. So really just making that experience great.
Our third strategic plank was to evolve our culture into one that was much more innovative and agile and was willing to try new things. We funded those new customer experiences by driving out every cost that customers didn’t see or care about. Because we had already been working on putting that transformation in place, when COVID hit, we were already two years in. That allowed us to pivot very quickly into being a purely digital company for some period of time. Within 48 hours, we empowered our store managers to be able to serve our customers from their homes using their iPads. Within six months, we had more than 700 virtual Jewelry Consultants serving people online. We added a chat function and capability. We did curbside pickup, same-day concierge delivery. So a number of different flexible fulfillment options. Because we were already well on that path, we were able to pivot so quickly, which gave us momentum in the second half of 2020. And that carried through to a great first quarter in 2021. So I’m very proud of the team. It’s not easy to adopt new capabilities like that so quickly. But I believe that they’re so relentlessly focused on wanting to serve our customers in the best possible ways that they embraced all of those new skills and capabilities much faster than you could even imagine.
Gina Drosos on pandemic-driven trends in jewelry
One of the things that we saw during the pandemic is that when people were not able to be out with the masses, were not able to be at a party or see everyone within their friend network, they really focused on those who are most important to them. One of our customers had a quote that I’ll always remember. He said, “one of the great gifts of COVID is clarity.” It really allowed people to think about who the most meaningful people are in their lives, and how to celebrate them, because every day is important. So we’ve seen a trend toward people celebrating each other with jewelry – it’s a gift of love. It’s imbued with meaning, it’s a lasting gift. Every woman that you meet can point to the jewelry she’s wearing and tell you when she got it and what it means to her, because it always has a story with it.
Usually Valentine’s Day is a lower-priced purchase occasion, often new relationships wanting to declare that “yes, we’re dating therefore, we’re celebrating Valentine’s Day together.” This year was different. Our average transaction value was roughly double what it was last year or the year before the pandemic, because we saw many more husbands buying meaningful gifts for their wonderful partners to celebrate all that they’d been through together. That’s one trend that I hope endures.
Another interesting trend we’re seeing is the power of jewelry as a statement piece and act of self expression. We call it Zoom-worthy jewelry. You can’t see what great shoes people are wearing, or if they have a nice bag when they’re on the Zoom screen. But you can certainly see their earrings and pendants. I think as companies come back into what in many cases will be a hybrid work environment, we’ll continue to see jewelry as a powerful accessory in that context.
A third one I’ve talked a little bit about is connected commerce. In the jewelry category, people are searching and browsing more online, and they’re coming into stores with a better idea of what they’re looking for. It’s not like they’re walking into stores with a blank slate like they were before; they’ve already thought it through, and that’s giving us a much higher closure rate.
Gina Drosos on jewelry services and embracing the circular economy
If you think about your life and your relationship with jewelry, it’s episodes of purchase occasions. It could be self-purchase, e.g. you got promoted, or it could be a romantic gift, or it could be a Mother’s Day or Valentine’s Day gift. We’re seeing women and men purchase more spontaneously these days than we ever have before, which I think is also a great trend. One of the things that can link together those purchasing episodes is jewelry services. How do you take care of your pieces? What if one goes out of style or just doesn’t meet your style anymore? How can you recraft it? We have had, for a while now, the largest care and repair business of all jewelers in the US. We have 1400 master craftsmen and artisans who are part of Signet, and every day they size people’s jewelry and polish it, fix the prongs, and so on. But it’s only recently that we’ve started talking to people about the custom creation kind of opportunity. We now have 50 Jared stores that have a foundry, CAD CAM software, and a 3d printer. You can go in and take your mom’s jewelry box that you’ve inherited, and say, “wow, this, this is all sentimental to me. I’d love to do something with it, but it’s not my style.” And we can help you create a brand new piece using those metals and stones and it’s a wonderful thing, especially for Gen Z. They’re a very sustainability-minded generation. It’s one of the reasons why we bought Rocksbox to become part of the circular economy with rental as an option. It’s also a way to meet younger women pre engagement, as they’re just beginning to get a professional experience with jewelry – they’re out in the career world and looking for more jewelry. So we think this whole circular economy is a great trend, whether it’s previously owned treasures, being able to recycle jewelry, being able to recreate jewelry, or being able to buy diamonds that were previously owned for an engagement ring. It’s an area where we already have a presence, but we believe we can grow that substantially.
Gina Drosos on her career path
I was an intern at P&G between my two years of getting my MBA at the Wharton School. And I had a wonderful experience,
I was really influenced to go to business school by an experience I had in college. My plan had always been to go to law school. My father was an attorney and had great affection for his career. I could see him making a real difference in the world. But in my junior year, I couldn’t afford to go on a very exciting Spring Break vacation, so I did an entrepreneurial venture. My roommate and I chartered sailboats in the Bahamas and recruited eight boats full of people to go so that we could go for free. And on the front of a sailboat in the Bahamas, I thought, “I like this business thing. I think this could be for me.” So when I came back my senior year, I didn’t apply to law schools, I applied to business schools. And that’s how I ended up at Wharton, which was a fantastic experience.
So I liked that idea of running a business, and when I got to P&G, they gave me the opportunity to do that at a really young tenure. I started managing a P&L three years into my career there. And as I grew into increasing responsibility, I was getting a more and more holistic view of how to run a company and grow from a smaller size to a bigger one.
It helped that I was part of what I would call an entrepreneurial part of P&G. I started working in the beauty care area. P&G at the time was largely a soap and diaper company. But I was part of a team that over a number of years grew P&G’s beauty business to be number one in the world, in the middle of this soap and diaper company. We used a lot of the company’s core capabilities in branding, distribution, and r&d, but applied those to the beauty industry in a way that was a breakthrough.
One early example was when I launched the first body washes into the US market. My kids don’t even remember this, but the US used to be an exclusively bar soap market. We didn’t use liquid soaps in the shower. But that was a huge trend globally, and P&G had a great hair care business. So I worked with my market research and product development colleagues, and we came up with a concept to launch an Olay two-in-one moisturizing body wash. And it was a huge success. It almost doubled the size of our business in the US at the time. So then they put me in charge of the total Olay business. And I put together a billion dollar vision for Olay and ultimately rose to higher and higher levels of leadership, but ultimately, I was able to grow the Olay brand from about $200 million in sales to over two and a half billion dollars. We did that through innovation, through understanding customers, r&d, etc. But it was a really great formative experience for me, both in the world of general management and in the world of teamwork and collaboration. I had a lot of opportunity to work with and for powerful women, so I saw the power of a diverse team. I had a very international job. And I worked hard to build a very diverse team. And that was a real cornerstone of our success.Those are all lessons that I took next into my entrepreneurial venture, when I ran a startup company in the genetic space, and that I brought to Signet after that.
Gina Drosos on the power of diverse leadership
Janice Ellig:
You have gender parity on your leadership team, on your board of directors, and I understand 75% of your store assistant managers, and above are women. How did this all happen?
It’s something that we’re very proud of, and I think it’s a key contributor to the results that we’re seeing – not just gender parity, but our entire approach to diversity as a business strategy. I think in some companies diversity, equity, and inclusion, at least historically, was treated more as an HR mandate. It wasn’t necessarily tracked, like business goals are tracked. And it wasn’t something that leaders were held accountable for, in the same way they were held accountable for market share growth or profit growth. But at Signet, we think about it very much as a business strategy, and it’s something that we track as a business result. When I came on to Signet’s board, I was only the second woman ever to serve on the board of directors. That was in 2013. And under our chairman, Todd Stitcher’s leadership, he’s built a highly diverse board. 58% of our board directors are either women or people of color. And that just produces such an innovative spirit in the boardroom, the kinds of dialogue that we have, how the board helps me see around the corner – it’s really unlike anything I’ve been part of before. So a lot of credit goes to Todd and the other directors for creating, from the very top of our company, that kind of inclusivity. And then of course, for me on my leadership team, I have achieved gender parity. At the levels of Vice President and above, we have leading racial and gender diversity, which I feel very proud of. And then, 75% of our store managers are women. We really believe all of those things help us be more agile and innovative, and they help us serve our customers in the jewelry category more effectively. I see it as a competitive advantage for us. So it’s something that we continue to think about. We just recently launched a new employee experience. It’s all about training and development for our very talented team. We have a path to $15 base wage in our workforce, and in our sales organization, our jewelry consultants have a commission on top of that.
We just have granted our field teams two hours a month to be fully dedicated to training and new skill areas. And we have record numbers of our team becoming certified diamond technologists, who are more and more capable to serve our customers in the store or by connecting online to our vast array of inventory that we have across the country.
Gina Drosos’s advice for aspiring leaders
I think that the key role of a leader is to set a clear and inspiring vision for the team about what the priorities and key strategies are. And then to create an environment where everyone feels like they can bring their full selves to work and thrive. Breaking down barriers when they get in the way. It’s really about being humble enough to know that you can’t do it yourself, and that the efforts and achievements of a team are always better than those of an individual when you’re all rowing in the same direction. So the advice that I give is, when you’re early in your career, don’t be focused on promotion timing, be focused on acquiring diverse experiences, work in a different function, if you’re in the finance organization, ask to work for a few months in the marketing organization. If you work in retail, ask to work in the field. When I was growing up in the marketing organization at P&G, I had the great opportunity to spend three months working as a sales rep, stocking shelves, calling on grocery store managers, understanding how to build a display. These were things that really helped me later on. Also, when I was running the global cosmetics business, I took the opportunity to go to a Boots cosmetics counter. In the UK, just outside of London, I spent a week as a makeup artist at a Max Factor counter that we had at Boots. Now, I’m not saying I didn’t get help, Janice, I’m not sure you want me to be your makeup artist. But I learned so much throwing myself into that different experience. So that’s what I always say to young leaders: don’t be focused on how quickly you can move up, be focused on how well rounded your learning is. Because that’s ultimately what will give you the perspective to make better decisions, and to be a better leader of people across functions that you don’t understand very well.
The second piece of advice is to ask a lot of questions. Don’t ever feel uncomfortable asking questions. I remember early in my career as a brand manager, making a deal with my finance partner that we would go to lunch every quarter. And we would talk about what was important in our functions. I taught him how to evaluate good advertising and how to think about a digital marketing budget. How to think about customer needs and how to translate that into a product development strategy. And he taught me more than I ever learned in business school or before that as a finance major about corporate finance and what was important to look at on a P&L, and how to think about cash management. All of those learnings have served me incredibly well. And all because we were willing to ask each other questions.
