From the source: Mike Parsell, Secrets
BIO: Mike Parsell joined Secrets as managing director this year, after working as CEO at Michael Hill for 16 years, where he expanded the brand to more than 300 stores across Australia, New Zealand, Canada and the US.
COMPANY PROFILE: Since 2000, jewellery retailer Secrets has been offering customers access to luxury jewellery through its collections of beautiful simulated diamond pieces. Stores are located on the Sunshine Coast, Gold Coast and in Brisbane, Perth, Sydney and Melbourne.
IRW: You retired from Michael Hill and you’ve made a comeback at Secrets this year. Why did you make that decision?
MP: As you know, we got involved with the business in April, so we’re still in our first three months. I retired from Michael Hill in August last year and I didn’t expect to come back into the industry this quickly, but I had a closer look at Secrets and I think Jane has done a wonderful job in positioning the brand where it is.
In my view, the jewellery industry faces a lot of challenges going forward. I think particularly in the mid-market, the biggest challenge for retailers is the differentiation and relevance to new consumers. I wouldn’t call them millennials, but I think people in general are trying to align themselves to brands that they’re more interested in that reflect their personal lifestyle and taste and that’s just happening right across retail.
For retailers that have been more generic with non-differentiators or who rely on external brands to define them, the landscape is going to be very challenging in the next 20 years, unless they evolve. For me, Secrets is a beautiful little brand that sits in the luxury space, with fantastic product, beautiful design and it really appeals to a core section of the market who love design, what the brand can deliver and value for money. That’s what attracted me to the brand. The product’s wonderful and the brand positioning is very unique.
One of the co-founders of Secrets was Dietmar Gorlich, who’s still involved in the business. He’s a jewellery designer who spent a lot of time in the luxury space and he always felt you could combine exquisite design with simulated designs and coloured stones that would produce a unique product proposition, enabling people to access luxury jewellery at an affordable price. That’s the core idea that started the brand.
That has led to a strong following of the brand. Customers can have a beautiful and uniquely designed product that was previously inaccessible, but now it is available. If you came and looked at the product, you’d be totally amazed.
We have 10 and 14 carat gold pieces where the bulk of the business lies, with entry pieces in silver. Our bridal range is all in 14 carat and it’s just absolutely exquisite. The design is beautiful, the quality is amazing, yet it’s at a really affordable price point for the quality.
IRW: How have you been settling into the new role? What have the past few months been like?
MP: I’ve been immersing myself in the brand and learning to understand it, but I’m a bit impatient, so we’ve been doing a lot of work behind-the-scenes in terms of product development for the next 24 months. We’ve been looking at our systems and infrastructure and determining how we move forward.
We have negotiated to open two new stores, too. We just opened Carindale this week and we open Mackay in North Queensland and Canelands next month and we’ve also negotiated to relocate one of our roles onto a much better location – we’re relocating the Chermside store. It’s been fairly busy already. I think we’re getting a lot of interest from consumers about what we’re doing and a lot of interest from landlords as to where the brand is going and what we have planned for it. There’s a lot of support out there for us to grow the brand and to increase the footprint. It’s really promising. We’re absolutely ecstatic.
We’ve just signed a contract to redevelop our online and digital platforms, so we want to extend our reach internationally with our website and we certainly want to make the experience between physical and online much more seamless, so that’s a high priority for us. It’s underway now.
In terms of social media, our online platform is very successful at the moment. It represents 10 per cent of total sales, but it’s a huge traffic driver to our physical stores. We have a high percentage of people who are discovering us online and taking the information or screenshots into our stores to look for the product.
MP: My experience internationally has been that websites play a huge part in the path to purchase for customers engaging in the jewellery category. It’s where they research design, quality and information. The online platform is a huge focal point for our marketing efforts.
When it comes to jewellery sector, what we’re seeing play out is for brands like Blue Nile, you have to be very, very competitive on price, so much so that the margins are almost non-existent.
But if consumers aren’t trading off on price, they want to see the product in person. The sector has been impacted by the likes of Amazon and customers’ changing behaviours, but it’s not been as affected as other parts of the industry. That’s not to say it won’t happen in the future, as a new generation of customers trust more online retailers and it becomes easier to return products.
But at the moment, customers often still think, “If I spend $10,000 on a ring and it’s not what I like, can I give it back?” There are a lot of unknowns in the industry that still cause people to want to see and touch the product before making a purchase.
With brand loyalty comes less resistance from customers to engage with brands online and we see it already. Customers may research us online, then come in and see the product. They might buy it at that moment or come in later or they may go online to make the purchase. But once they trust the brand, understand it and know it’s going to support them, that resistance decreases and the ways they engage with the brand will become more diverse. They will shop online and will shop in-store.
When you’re discovering a new brand or an online-only retailer in our space, the more expensive the item gets, there’s more concern about whether to engage or not without seeing the product physically first.
IRW: What are some trends in the jewellery sector right now?
MP: White gold is still very popular, it accounts for 70 per cent of the business. Bridal is holding up, we have a lot of interest in our bridal assortments, which represent 50 per cent of our sales. Staple items like stud earrings are always desirable, simple and timeless, but there’s a lot of interest in tennis bracelets, drop earrings and more fancy earrings. We’re finding coloured stones are becoming much more in demand and the coloured diamonds sector is growing too for us. Our simulated yellow and pink diamonds are becoming more and more popular.
IRW: What lessons have you learned from Michael Hill that you’d like to implement at Secrets?
MP: I think there are just a couple of things that are critical to nurturing and protecting our brand and making sure it’s authentic, understood and relevant. As the business builds and gets stronger, those things are fundamental to the sustainability of the business.
I think product differentiation is hugely important going forward, as is the ability to create collections that people relate to and understand. Your ability to differentiate your design or product positioning is absolutely paramount in the future of our industry.
But probably the most important thing is the quality of your people, your teams and the human capital that you build inside your business. That can never be underestimated. For a business to grow from strength to strength, even if your brand is getting stronger and the product is relevant and different, the most important factor is getting your teams right and making sure they understand who you are, the customers and how to service them. That’s something at Secrets we’re definitely aware of and there’s a big drive here to find the right people who share our vision, enthusiasm and passion for the industry.
IRW: There’s been a lot of talk lately about retailers offering affordable luxury. What do you think is driving that?
MP: I think consumers are looking for value, but not necessarily discounts. They want to know that they are getting value for money. Value is a combination of a lot of things, it’s not just the percentages off. I think in our industry, because our stock turns are low and capital investments are high, that’s something that we could all do better. I think it’s how we tell the story of the uniqueness of our product and explain why it’s relevant.
IRW: A lot of luxury brands are now aiming themselves at millennial customers. Is that something Secrets is doing too?
MP: We’re looking at ways to excite younger consumers around our designs and jewellery. I think the reality is that bridal markets are reasonably static, but I also think more and more people are feeling that financial pressure when they get engaged. They have to pay for weddings and honeymoons and house deposits – there are so many things that are now in play and younger consumers are considering alternative things for jewellery now.
Retail is always changing and I think good brands are always looking for ways to engage with new customers, without confusing the wider audience as to what their brand stands for. It’s tricky, but in the jewellery space, we have to be focused on midmarket consumers and be versatile. If you do your job well, you’ll keep them through the entire purchase cycle.
IRW: You’ve been in the jewellery industry now for around 40 years now, starting your career as a horologist. What would you say are some of the biggest changes that you’ve seen in that time in your sector?
MP: There has definitely been a shift from generic brands to specific brands for customers. That’s obvious when you walk into middle market jewellery stores these days. A lot of stores are dominated by external brands but I wonder, is the industry remaining relevant to the consumer base that we once had or are we losing the relevance?
In the early 1990s, if you walked along Oxford Street in London, you’d see a mid-market jeweller on every corner. But I walked around there two years ago and it’s no longer the case – there are watch brands and fashion jewellery brands, there’s everything but the established mid-market jewellers that were there before. If you look at that, the biggest transition for us will be how we as an industry remain connected with our existing and future customers and are we keeping an eye on how relevant we are?
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