Ring Concierge founder on engagement ring trends during COVID-19

Nicole Wegman, Ring Concierge Founder, joined Yahoo Finance Live to discuss how the company helped consumers shop for engagement rings while stuck at home and the trends shes seeing from clients.

Video Transcript

EMILY MCCORMICK: Well, spring wedding season is upon us. And first comes love, then come engagement rings. And e-commerce jewelry company Ring Concierge is one place to buy them. We have Nicole Wegman, Ring Concierge founder, and Yahoo Finance reporter Alexandra Canal with us now.

And Nicole, with so many weddings put on hold or scaled back during the pandemic, how has business been last year? And how are sales shaping up in the first few months of this year now that restrictions are starting to get lifted?

NICOLE WEGMAN: You know, it's interesting. At the beginning of the pandemic, March and April, we saw a huge drop off in engagement ring purchases. People were hesitant. No one knew what this would look like. But then interestingly enough, come summer, the sales started to skyrocket. And it's because our business model has always operated online, through social media.

We really understand how to work with clients remotely. And with so many cities shut down and most of our competition being brick and mortar stores, they weren't able to operate and we were. So we essentially went through the summer with zero competition. And we saw customers increasingly become comfortable with purchasing online, and remotely, and sight unseen, because that was really their only option if they wanted to get engaged in 2020.

ALEXANDRA CANAL: Hi, Nicole. I know you mentioned social media. I know you through Instagram. So how much do you guys rely on the power of social media? And I'm curious if there are any cons to that due to the accessibility and the fact that you are selling these ultra-exclusive products?

NICOLE WEGMAN: Instagram is by far our greatest tool. The majority of our growth has been organic through social media. It's great because it's a very inexpensive marketing tool for us. With that being said, we are heavily dependent on it. And with new channels like TikTok, we do need to figure out how to also become strong on those channels.

But we find most of our clients want to communicate with us via social media, so we try to cater towards that. We have tons of direct messages coming through on Instagram that turn out to be very real clients. We've sold rings start to finish through DMs or through text. And we've had clients come through with well into the six-figure budgets that find us on Instagram and decide to work with us purchasing their engagement ring.

SEANA SMITH: Nicole, people spending well into the six figures, it might answer this question I have. But when we talk about the shift in consumer behavior, and you mentioned how people were a little bit hesitant to buy rings at the start of the pandemic and then you've seen that pace pick up over the last several months, are people now spending more than they were a year ago before the pandemic?

NICOLE WEGMAN: We haven't seen much change in average spend. We were very worried about this. We thought with all of this economic uncertainty that we would see our average price point start to decrease, and we haven't.

It's remained around $30,000, which, you know, certainly a high price point. We are a luxury brand, so I recognize that's much higher than the average engagement ring. But no, we haven't seen this decrease throughout the pandemic. It's stayed very steady.

ALEXANDRA CANAL: Nicole, what are you hearing when it comes to moissanite vs diamonds? I know you're a luxury brand. I don't even think you guys offer moissanite on the platforms. But I'll talk to my guy friends, and they have no idea how much an engagement ring costs. Even-- even a two-carat ring, they're shocked by it. So what have you been seeing industrywide when it comes to diamond ring alternatives, because I do think the price point can really surprise people?

NICOLE WEGMAN: Sure. Definitely diamonds have a high price point, no question there. Moissanites, we don't get a ton of requests for simply because it's not necessarily a long-term solution or alternative. It's not as hard as a diamond. It certainly doesn't look exactly like a diamond.

So maybe if your discretionary income doesn't allow for you to purchase a diamond right away and you want to purchase a moissanite for a few years and then upgrade, we've seen that. But we haven't seen that many people want a moissanite for their permanent ring.

What we did do to try to further protect ourselves from any kind of shifts in the economy since there is so much uncertainty is we launched a diffusion line called VOW by Ring Concierge. The average ring in America is $5,000. And our luxury Bespoke line starts at $10,000. So we launched this online-only diffusion line that has rings ranging from $3,000 to $10,000, completely purchasable online with a diamond feed. So that was our way of really catering towards a broader demographic rather than offering synthetic alternatives to diamonds.

ALEXANDRA CANAL: And how has that business been doing, especially when you compare it to your more luxury side?

NICOLE WEGMAN: Our luxury side is still much bigger and much stronger. I mean, that's what we're known for. And what's interesting even in the diffusion line, our average price point has been coming through at $8,000, so still higher than that $5,000 average for America.

EMILY MCCORMICK: And Nicole, I want to ask perhaps less of a rosy topic, but what happens if a customer actually needs to return a ring? What if they wanted to actually be swapped out? I'm wondering if that happens very often through your service, because it is e-commerce base for many of these ring deliveries. And does that cause a problem if these materials and these gemstones need to actually be reused?

NICOLE WEGMAN: Luckily, this happens really infrequently, because although we work with clients often remotely, we are very hands-on with the process. So with our Bespoke rings, you have a one-on-one consultant that you work with, usually for a few weeks, custom selecting your diamond, custom designing your setting so you know exactly what you're getting. So very, very rarely does someone say this didn't meet my expectations.

We're very lucky in that, and we work really hard to make sure they know exactly what they're getting. Of course, there is that rare breakup that might happen before a wedding-- before the wedding. So we'll work with them to either buy it back or trade it in for something else. But this happens so infrequently that it's not a huge impact on our business model.

EMILY MCCORMICK: All right, thank you, Nicole Wegman, founder of Ring Concierge.