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The Woman Working to Change Signet’s Stores
Chief Transformation Officer Lynn Dennison talks real estate strategy, competing with independent jewelers, and cars vs. jewelry.
Just before the Las Vegas jewelry trade shows, I had the chance to interview Signet Jewelers executive Lynn Dennison, who became the company’s chief legal and transformation officer earlier this year.
Dennison has been with Signet for almost eight years, joining the company in January 2011 as senior vice president and general counsel after working at Honda of America and Tecumseh Products Co., which makes compressors for air conditioners and refrigerators.
She started as vice president and general counsel before being promoted to her current post in February. As chief legal and transformation officer, Dennison is in charge of store design, innovation and analytics, among other areas.
Below, she talks about Signet’s store strategy going forward, competing with independent jewelers, and cars vs. jewelry.
On closing stores
Signet announced in March that it would be closing more than 200 locations this year, mainly in malls where it has multiple stores, e.g., a Kay Jewelers catty-corner from a Zales.
Dennison said the majority of closures won’t take place until after the holiday season so the company has a chance to examine each location’s performance for the full fiscal year; stores that are not profitable will be gone.
She also pointed out that Signet closed a similar number of stores in FY 2018--235 to be precise.
The company’s annual report shows the highest concentration of closings was for Zales (58) followed by regional brands (56), which was not suprising.
The regional brands owned by Signet have been under-performing for years. For those who might have missed it in the original story on the store closings, Signet is actually in the process of shuttering all regional brand stores, a process that will take place over the next three years.
On the concept behind the concept stores
On the same call where it announced the store closures, the retailer said it would open between 35 and 40 locations in FY 2019, some of which will be concept stores.
Dennison said Signet, which is a publicly traded company, is in a quiet period regarding these new stores so the amount of information she can divulge publicly is limited.
She did say, however, the stores are being designed to deliver “exceptional customer service” and will integrate technology from R2Net, which Signet paid $328 million to acquire last year.
R2Net is the parent company of both e-tailer JamesAllen.com and Segoma Imaging Technologies, and Signet wanted the latter as
Segoma has a diamond imaging camera, which can create 360-degree HD images with a 40x super-zoom; 3-D imaging technology that allows shoppers to pair loose diamonds with rings; a ring try-on app; and 24/7 customer service and chat capabilities.
Signet has begun using some of R2Net’s technology in its stores, including the ring try-on app.
None of the new concept stores have opened yet. Dennison said: “We are in the design process for test stores that would integrate various technologies and concepts that are different; different locations, store formats—all of those things are in play.”
On the future of the physical store
What, I asked Dennison, is Signet’s target number for the size of its physical fleet, given the way people shop today? (The retailer currently has about 3,556 stores in the United States and United Kingdom.)
She did not provide a specific figure, noting they will continue to evaluate stores’ performances, but said the company believes physical stores will remain central to the jewelry-buying process.
On competing with independent jewelers
Company executives acknowledged during the last earnings call that Signet is not just losing sales to online retailers but to independent jewelers as well, who have a “very personalized relationship” with customers that Signet lacks.
So, what can the company do to change that?
Dennison said Signet plans to focus on its strengths—its size, capability and reach, adding that his is where data (meaning the information the retailer is available to gather about customers or potential customers online) and analytics (who comes on its websites, where they go/what they look at, how long they stay, etc.) really come into play for the retailer.
Signet is focused on learning more about the journey people take in, for example, deciding to buy an engagement ring, which is a process that might take months or even a year, she acknowledged.
Early on, consumers might be educating themselves more broadly about engagement rings, but might look for more specific types of information as they narrow down their options and get closer to making a decision.
She said Signet’s goal is to tailor the type of information delivered online to each consumer based on where they are in their purchasing journey, so that they, presumably, will be thinking about Signet stores and the brands they carry—Vera Wang Love, Neil Lane, etc.—when they are ready to buy.
On cars vs. jewelry
Dennison spent 12 years at Honda of America Manufacturing Inc. in Marysville, Ohio, as assistant vice president and general counsel.
She said the jewelry industry is more similar to the car industry today than it was 15 or even five years ago, as retailers have begun to focus on what has been a cornerstone of the automobile industry for years—technology, data analytics and innovation.
“It’s front-and-center for jewelry retailers now,” she said, citing product and service innovation in particular for Signet. “It’s all, again, focused on the customers—what they need, what will draw them back.”
On what’s surprising about Signet’s customers
Forty percent of couples looking for an engagement ring today already have children, Dennison said, a statistic that CEO Gina Drosos has shared publicly a few times. That affects both when and how they shop.
I asked if that means Signet is looking at ways to keep small kids entertained in stores; I know that some retailers, like New England chain Day’s Jewelers, have children’s play areas in their stores.
But the answer seems to be no.
Dennison said when considering these customers, Signet feels like online shopping is a better option for them.
They could, for example, build a ring from scratch, order online and never have to come into a store, or select a ring online and just pop into a store to pick up the finished product without having to worry about, how am I going to keep my kids occupied for two hours in this jewelry store?
On what makes a good partner
Toward the end of the interview, I asked Dennison a question we recently asked independent jewelers for a feature that ran in our 2018 Retailer Hall of Fame issue: What makes a good supplier partner?
Dennison said great communication, shared and aligned objectives, and greater ability to be agile and innovate with respect to the experience Signet can deliver via that product.
The company also wants the same from mall operators, many of which are struggling today.
Reis Inc. said back in April that the vacancy rates in large U.S. malls are the highest they have been in six years, and those that own or develop the shopping centers know they have to start doing something different to draw in consumers.
Last month, National Jeweler wrote about a Canadian real estate firm that’s bringing a Cirque du Soleil experience to a mall in the Toronto area and perhaps to the U.S. as well. And in Florida, a shopping center that will be the largest mall in the U.S. likely will include a lot more than just stores.
Signet wants to partner with mall operators like this—ones that are innovating and thinking about how to be current and relevant into the future.
“We’re having those conversations now,” Dennison concluded. “It’s exciting.”
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