How DTC Brands Are Redefining Luxury Marketing: A Case Study by Forbes – Entrepreneurs

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Olivia Landau founder of The Clear Cut

The Clear Cut

Casper. Warby Parker. Glossier. Bonobos. What do all these brands have in common?

They are all Direct to Consumer (DTC) brands which forego the usual middlemen of retailers and resellers and sell directly to the end customer. With the rise of millennial and Gen Z shoppers, these brands have found a particularly ready and accepting audience. But, can the success of DTC brands be replicated in the luxury market? After all, marketing luxury goods has historically required a white glove approach where selling the perception is just as important as the product itself.

One luxury brand, however, is doing exactly that – à la millennial style. Olivia Landau is a GIA Graduate Gemologist and fourth generation jeweler. In 2018, she launched The Clear Cut, a DTC diamond business that’s been disrupting the way millennials are shopping for diamonds. The brand has been averaging 108% Quarter-over-Quarter Growth in volume organically. This growth has been with minimal paid advertising – they have built the brand on social media by selling diamonds in the DM’s.

Obviously, I had to dig deeper. Here’s my interview with Olivia.

How have you managed to keep brand growth organic? What are the steps you’ve taken especially as organic growth on social media becomes more challenging?

Our growth has been organic from the start. Coming from a family of diamond experts, I have always been asked about diamonds so I initially created a blog for my friends to read about the do’s and don’ts of buying one and then they began to ask me to create their engagement rings because of my relationships in the diamond industry. Eventually, I started posting some of my ring designs on Instagram and it took off. All of a sudden, I was getting DMs from total strangers to create their engagement rings and getting wire transfers from across the country! It was a crazy, exciting time.

We recently had our first million dollar plus sales quarter – a benchmark for our young brand.

Despite this rapid growth, our biggest priority is serving our customers and ensuring that they have the best experience possible. Our clients are trusting us with one of the biggest personal moments in their lives – and often, one of the most expensive – so we want to feel part of this journey with them. My favorite part is celebrating each and every engagement with our clients – I don’t think that part of the job will ever get old.

One of our primary goals is to de-mystify and disrupt the diamond industry by providing a platform of honest education for our community. We want our customers to feel empowered before they even book an appointment so we produce as much educational content as possible.

When you say “minimal paid advertising” –  What does that look like compared to the industry? Has it been spent on amplifying posts or in other ways?

Because we’re a DTC company, we have learned so much from working with our consumers on what makes the perfect ring, and how to simplify the buying process. Our marketing strategy has always been informed by what we learn from working with our community – it’s a constant feedback loop that enables us to be a step ahead of the traditional brands in the market.

We have not followed the typical DTC playbook of VC-backed massive paid advertising spend. It doesn’t work in our industry, at least not right away. Diamond engagement rings are a very complicated, difficult and emotional sale. Ultimately, you cannot buy your brand or pay for unlimited growth. To grow efficiently and sustainably, you need to build an engaged community who will spread the word for your brand.

Our focus is to be a brand that stands for transparency, a better way of buying, personalization, and great individualized experience. We have built a community where we directly speak to our customers. Two examples of organic growth drivers have been in the form of educational series’ we created based on community feedback: the Wednesday Q&A and The Clear Cut Classroom.

What started as fun/occasional features on our Instagram channel have actually become a central component to The Clear Cut community. If I’m busy and don’t start Wednesday Q&A right away, I will get DMs from people around the world asking why it hasn’t started or telling me that they are in Europe or Asia and are staying awake to ask me a question! It’s amazing to see how engaged everyone is.

Do you work with influencers? How have they been compensated to share?

In a way, our clients are our brand ambassadors and have provided strong third-party endorsements, allowing us to do minimal pay for play. Because of their word of mouth referrals, our followers and clients have enabled us to create an entire global community on Instagram and beyond that continues to grow!

The growth has now caught the attention of an amazing community of “influencers” who have found us organically.  This attention has been really flattering and we are now diving into more strategic and customized partnership opportunities.

What made you go completely DTC? What are the pros and cons to pursuing this approach?

Contrary to what most people think, the margins on diamonds are razor-thin. To provide our customers with the most competitive prices, we go directly from the source to the consumer.

The Clear Cut process is also more personal and allows us to work closely with our customers, every step of the way. Fostering this intimate relationship is a great opportunity to constantly engage with and learn from our community on social and throughout the purchasing process.

The DTC model is a natural model for building a life long relationship with this generation of jewelry consumers. We recently relaunched our website with our first-ever Clear Cut fine jewelry line which was created through crowd-sourced marketing, showcasing trends we garnered from Instagram as a total reflection of our community.

How does selling diamonds in Instagram DMs work? Is the entire transaction done via Instagram?

Some might be surprised – but we have worked with customers completely through Instagram DMs and have even sold a $70,000 diamond through text message.

We get customers from everywhere! Instagram, Google, word of mouth, direct email, you name it. For custom diamond engagement rings, we usually prefer an initial phone call consultation. It is a ton of work taking dozens of calls a day but it furthers our relationship with our customers, and we are able to learn actionable insights from these conversations. No matter how big a customer’s budget, the time taken to understand their background and their preference is invaluable.

From there, the customer works directly with myself and the team to create the perfect ring for them either via text, DM, email or if they are local to NYC an appointment at our showroom. Often if the partner is not involved we have to be discrete (to keep the surprise) and will communicate on the channel that best serves that particular customer.

Instagram Stories have also been huge for us. Sometimes if we find a really special diamond at an incredible price we will share a video along with pricing on stories. These deals can be snatched up in a matter of minutes with prices of anywhere from $5,000 to $40,000+

How do Millennials and Gen Z shop differently for jewelry than previous generations?

Consumers today are super savvy and unwilling to pay crazy markups from a traditional retailer. Today’s consumers want transparency — for a good reason. Increasingly gone are the days of having to “know a guy.”

Buying a diamond can be confusing and that’s why there’s a demand for transparent brands who sell authentic products. Because of e-commerce, there is almost too much information out there on diamonds that gets hard to navigate. This is where we come in. We try to recreate a feeling like you are just reaching out to a friend, who happens to be a diamond expert and wants to ensure you get the best possible deal.

One unique aspect of our business is that we do NOT have an inventory; everything is bespoke so we would never push a diamond on a couple that isn’t their dream ring. We genuinely take the time to pick the perfect diamond for each and every couple based on their preferences and price range.

Millennials and Gen Z shoppers also want brands with values that align with what they believe in. Most of our customers are just starting out in life together and it’s comforting to work with an expert who is also a peer who understands them. Our depth of industry knowledge, Kyle (my fiance) starting a fair-trade diamond mining company in Sierra Leone, and me being a fourth generation diamond expert proves our credibility and builds relatable trust in our community.

Another interesting trend is how involved both partners are in the process. It’s a common misconception of the industry that men pick out the ring individually only to then surprise their partner with a dramatic proposal. In fact, most of our clients come to us together to collaborate on the ring.

Do networks like Pinterest and YouTube play a role in how you market?

One of the hardest things when organically scaling a rapidly-growing business is every night, you have to go to bed recognizing there is more work to be done than there are hours in a day. Pinterest and YouTube are my neglected children. To date, most of our energy has been focused on Instagram and has worked for us. However, we have an incredibly visual product and recognize that Pinterest & YouTube play a role in engaging other demographics with the product.

Lots of fiancés-to-be find inspiration on Pinterest and tag their favorite styles, often being The Clear Cut rings. We are definitely looking to explore and invest more time/resources into Pinterest as it is integral to the aspirational bridal clientele.

YouTube has been a natural integration because so much of our existing content is video. We have already begun to share our Clear Cut Classroom on YouTube, so go check it out!

What are your top three tips for other DTC brands in the luxury sector?

Traditional luxury brands were built on the premise of exclusivity – they targeted the elite and the wealthy. DTC brands are changing the game by bringing accessibility and transparency into the world of luxury products (like diamonds). I would encourage likeminded brands to do the following: find ways to authentically connect with your end buyers whether that’s through social media or direct mail, utilize consumer feedback throughout product development, and sell your expertise as part of the offering so that customers know the value of what they’re paying for.

1-  Authentically connect directly with your end buyer

We do this through our Wednesday Q&A sessions on Instagram Stories. Each week, our followers tune in to ask any and all diamond and jewelry related questions. This creates a bridge between us and our consumer – it’s a direct relationship and gives them a platform to feel a part of our brand and family.

2- Utilize consumer feedback

What better way to grow your brand than to take direct feedback from the end buyer. We crowdsourced questions and feedback from our community to continue to expand our brand – from exploring new designs for our fine jewelry line to the topics/ curriculum we incorporate for our weekly Clear Cut Classroom videos.

3-  Transparency & Expertise

Consumers across the board want to know the value of what they are paying for and not be kept in the dark. They want to be educated and well informed. Plus, consumers today are savvy and luxury no longer equals overpriced! We are completely transparent in our pricing and do not have an inventory, so we genuinely pick each and every diamond we use to best benefit our customers.

April 30, 2019 at 11:27AM
https://www.forbes.com/sites/shamahyder/2019/04/30/how-dtc-brands-are-redefining-luxury-marketing-a-case-study/
Forbes – Entrepreneurs
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