Cover Story: Retail With a Greater Purpose

Jewelry and design have always been a part of Carolyn Rafaelian's life. Her father, Ralph, opened a jewelry manufacturing business in 1966. It was there that Carolyn developed her love of design. In addition to designing pieces for her father's business, Rafaelian began to create her own jewelry line. An overpowering sense of belief in those products led Carolyn to start Alex and Ani, the jewelry company named for her two eldest daughters.

Alex and Ani started small, with Rafaelian selling her designs wholesale to retailers around the country. In 2009, five years after Alex and Ani was founded, it opened a single store in Newport, R.I., Rafaelian's home state and where the company is still headquartered today. From its humble beginning has emerged one of the fastest-growing brands in the retail industry. Consider the following:

• sales at the end of 2013 stood at $230 million, representing a nearly 3,600 percent increase in three years;
• profits have increased by 50 times since 2010;
• Alex and Ani now operates 40-plus stores across the U.S. and its merchandise can be found in another 1,500 retail outlets across the globe; and
• the company employs nearly 1,000 people today compared to less than 30 four years ago.

What's driving this growth, according to Rafaelian, is the positive energy behind Alex and Ani's products. In addition to its trademark bangles (a bracelet with a pendant affixed to it), Alex and Ani sells necklaces, earrings, rings and, soon, fashion items such as handbags. Every one of its products is infused with positive energy in three ways. First, the products are manufactured with positive intention in American factories. Second, the symbols featured in Alex and Ani's designs carry their own energy and are accompanied by thoughtfully crafted and meticulously researched meaning. Lastly, each design is positively intended to empower the wearer and reflect the unique qualities of the individual — e.g., it may hold some sort of sentimental value for the wearer.

4 Cornerstones
The value proposition that Alex and Ani conveys to its customers is built on four principles: a commitment to making its products domestically — which goes hand-in-hand with creating jobs; operating as a sustainable business, including the use of recycled materials in its products and electronic receipts at its retail stores; personalization at the product level and across all touchpoints; and empowerment through charity.

Domestic manufacturing: All of Alex and Ani's products are handcrafted at the company's headquarters in Cranston, R.I. "Our dedication to U.S. manufacturing is at the core of everything we do," says Rafaelian, who currently serves as the company's CEO and creative director. "I've made a commitment to my country and my customers to create pieces that I'm proud to put my name on. Re-invigorating an industry in Rhode Island that was almost obsolete is an incredible sense of accomplishment and pride for me."

Sustainability: In addition to using recycled materials for its jewelry, Alex and Ani has implemented an eco-conscious manufacturing process. "We keep a corporate consciousness in mind with all of our decision making," Rafaelian says. "We're always considering and investing in the option that's not only the best product for our customer, but a better option for our world as well. The materials that we use are selected with consideration for the Earth and future generations."

Personalization: One-to-one personalization that informs customers throughout the entire purchase journey is Alex and Ani's goal. "Every wrist is unique and different, and that's illustrated by the array of SKUs across our customers," notes Ryan Bonifacino, vice president of digital strategy at Alex and Ani.

Charity: Rafaelian has created Charity by Design, a division of Alex and Ani that partners with charitable organizations. She designs symbolic bangles unique to each charity and then donates a portion of the item's proceeds directly to the nonprofit organization.

"Some of my proudest accomplishments have come from Charity by Design (CBD)," says Rafaelian. "The law of the universe says the more you have, the more you have to give. When you give freely and from your heart, that gift is amplified in the most magnificent way. CBD is probably the most special part of this company to me because it's our give back, our reason to be thankful; it's our way to be grateful of everything we've accomplished and everything we have. When I see videos of children who are drinking handfuls of clean water with smiles of amazement because of a commitment we've made as a company, there's nothing more rewarding than that."

The Science of Customer Acquisition
As an omnichannel retailer, Alex and Ani is heavily dependent upon customer data to help it make smarter marketing decisions. Managing this customer data from its 40-plus brick-and-mortar stores, e-commerce site, and wholesale and international businesses is a challenge, especially for a company in a period of hypergrowth such as Alex and Ani, where demand frequently outpaces supply.

"It's a unique problem to have, and one that won't last forever," says Bonifacino, "but that's one piece of a formula that tells us what we're willing to spend to not only acquire a customer, but to retain a customer. We're able to connect awareness all the way down the funnel to direct response. As you're spending money, there's a certain action that you want to take place, whether it's a site visit, email signup, like on Facebook, follow on Twitter, etc. We have the multitouch attribution in place to define what it truly takes to acquire a customer."

Alex and Ani also analyzes the incrementality associated with customer acquisition by asking the question, "Would this customer have discovered us otherwise?" To help it perfect measurement and attribution, Alex and Ani has hired data scientists to build its attribution model. And the company is constantly evolving the model based on the data it's collecting.

In fact, the retailer has established the Alex and Ani Institute, a professional development center that offers learning programs for members by uniquely cohering the human sciences, spirituality, psychology and systems thinking to inspire transformational results via self-discovery, awareness of others, teamwork, creativity and engagement in a productive workplace.

Product Extensions, Unique Partnerships, International Offer Potential for Future Growth
With Alex and Ani having firmly established itself as the leader in the jewelry accessories category, particularly for bangles, the company is beginning to look outside that niche for future growth opportunities. One such area is fashion and lifestyle products such as candles, handbags and beauty products.

"People are coming to Alex and Ani for a lot more reasons than they just want to put a bracelet on their wrist," Bonifacino says. "They're coming for the meaning behind the product." Alex and Ani is betting that dynamic will extend beyond jewelry. The company is leveraging existing partnerships and seeking out new ones as it looks to expand its product catalog.

"As a brand, we're looking to be unique and authentic to ourselves, while creating products that allow the wearer to represent what's unique and authentic about themselves," Rafaelian says. "Creating that experience for customers in different lifestyle categories will continue to set us apart."

In addition to growing its brand through new products, Alex and Ani is focusing on creating partnerships that will help expose its brand to new audiences. The company counts the NFL, Major League Baseball, NBA, all five branches of the U.S. military, among others as partners. Alex and Ani creates co-branded pieces for these partners — e.g., charms featuring team logos.

Lastly, Alex and Ani is expanding its brand internationally. The company, for example, currently sells its merchandise via wholesale partners in 10 countries and 11 Caribbean islands, with plans to open its first international concept store this year.