Research suggests that the wealthy will soon be willing to spend again
Research by the independent retail analyst Verdict has suggested that the European jewellery and watch market is set to grow for the first time in three years in 2011.
The study has forecast that the upturn will not be down to spending by the masses but that growth will be driven by a return to spending on luxury items by the rich. “During the recession wealthy consumers deserted luxury brands in favour of the mass market” the investigation states “However, there has now been a reversal in fortunes as these consumers are now more optimistic about their finances so are slowly turning their backs on the main stream retailers and returning to luxury brands.”
Ruta Perveneckaite, analyst at Verdict said: “We expect to see a return to growth for the UK jewellery market this year with the luxury market stealing market share from the mass market. This reflects the global trend where during 2009 the luxury segment shrunk by -9% but this year it is set to show growth of more than 8%. In comparison the mass market grew by 2.5% in 2009 and will only see a marginal improvement of 3.1% this year.”
In fact, as the world continues to recover from recession the global luxury market will increase its share and by 2015 Verdict predicts it will have grown by more than 50% – more than two and a half times the pace of the mass market.
Verdict also believes that luxury jewellery and watch retailers have the potential for growth through development in transactional websites – a topic which was discussed at the Professional Jeweller Round Table conference
Ms Perveneckaite continued: “So far many brands are missing an opportunity by not launching into the online space. Consumers are now increasingly willing to buy big ticket items online so brands should change their approach to capitalise on this. For example the US online diamond specialist, Blue Nile maintained sales throughout the recession and now operates in 24 currencies.”