The new rules of luxury

stephenwebster_mickeyrourke.jpg

LVMH results show appetite for luxury jewellery is back.

LVMH’s latest results show the appetite for luxury jewellery is back, but don’t be fooled into thinking your customers haven’t changed. A new breed of shopper is returning to luxury and there are a fresh set of rules for retailers, warns Juliet Rowe.

Since the economic downturn, those making a living from luxury have been awoken with a jolt and a colossal rethink has been called for. Luxury is undergoing a revolution and retailers must learn the new rules, and fast.

The knowledge and awareness of the 2010 consumer cannot be brushed aside. Shoppers understand the price of gold and the repercussions, are seeking out exclusive purchases, know their stones and the ethical issues surrounding them, and are continually being educated on practices at factories on the other side of the world where product is churned out and the price of labour is a pittance.

Story continues below
Advertisement

This overload of information has caused the demand for one-off pieces and limited editions to step up a few gears, and shoppers are taking time over buying decisions and where to invest their hard-earned cash.

Luxury jewellery designer Elizabeth de Chambrun has found that the majority of her clients are now “low key and are looking for something that has durability”, but says clients remain discerning and demanding.

De Chambrun, whose work can be characterised as understated old-school European luxury, finds it necessary to take the time to meet with most of her clients face to face to help them fully relate to the piece they are buying.

“They understand the stones, are aware of the price of gold, yet do not just throw money at it,” says De Chambrun. “It is the challenge for big companies in the luxury world. We have had the golden age and now we are all in the dark and it is a little bewildering, like little children in a huge forest.”

Once considered the safe haven of the recession, the luxury and fine jewellery markets inevitably took a hit in line with other sectors as the recession deepened. This has not been a punch of purely economic proportions; those at the helm of the luxury houses and fine jewellery labels have had to re-evaluate more than just pricing.

During this turbulent period, the jewellery industry has had to take a step back from its commercial journey and have a good think – both creatively and strategically – about what the customer wants. Complacency is not an option if jewellers are to survive this mutiny.

The learning curve in the luxury sector for the next few years just got a little steeper, but the marketplace is bouncing back. This was demonstrated as luxury group LVMH released its first quarter results in April, showing a sales spike of 13 percent to €4.5 billion (£4 billion). The group revealed that its watches and jewellery division – which includes brands TAG Heuer, Zenith, Chaumet, Hublot and De Beers – was its strongest-performing sector during the period as retailers put an end to the destocking that has blighted the luxury sector during the recession.

Although luxury shoppers have come out of hiding, jewellers need to recognise that they are now that much more discerning. Along with the fierce financial backlash putting a firmer focus on pricing, the post-recession shopper is demanding jewellery that is not blatantly mass-produced. Limited editions and one-offs are now key.

Avant-garde luxury jeweller Stephen Webster says he has noticed a rise in commissions and demand for one-of-a-kind pieces of jewellery as the economic conditions have worsened. He believes luxury shoppers are looking for individuality and has responded to this by introducing one-off pieces within his fine jewellery collections, as well as offering a bespoke service.

“We have experienced, especially with some of our international clients, that they love to push the boundaries and create something that is very special, quite often having a very intimate or emotional connection to them”, says Webster. “Therefore, offering a bespoke piece is still an invaluable part of the service that we provide.”

Jewellery designer Ana de Costa, who won the Coutts New Jeweller Award in 2009, also believes personalised product is vital for luxury brands. “As a fine jewellery brand, one needs to offer a more personalised or tailored product to meet customer needs and requirements,” she says. “In this day and age there is so much more competition within the jewellery industry with lots of new and up-and-coming designers.”

As well as designer-makers, De Costa is also feeling the pressure from the never-ending slew of celebrity designers lending their names to jewellery collections. “One has to stand out from the crowd,” she says. “Personally, I am avoiding the temptation to produce production-line jewellery for a quick buck and am building my business slowly and firmly in the fine jewellery field.”

De Costa’s courage should see her well. The desire for unique jewels is strong and, because of this, concept stores selling one-off pieces and jewellery by lesser-known designers are thriving, fuelled by an army of bloggers spreading the word about these in-the-know retail hotspots.

Trendsetting London retailer Kabiri, which has two stores in the city and a concession in Selfridges, sets itself apart from the market with an exclusive selection of jewellery. Brands are signed up to an exclusivity contract with Kabiri to ensure it has a jewellery offer like no other, but once that contract is up, the designers are often snapped up by major stores such as Harrods, Liberty or Fenwick.

“The story is all important and the customer wants to know that it is a one-off piece or limited edition and who the designer is,” says Kabiri owner and buyer Nathalie Kabiri. “This is the direction our clients are going in and they want the next thing.”

Luxury jeweller Boodles, which has stores in London, Chester, Liverpool, Manchester and Dublin, has a more traditional client base than Kabiri’s trendy target market but is also noticing a shift towards individual jewellery.

“Clients are moving away from single diamonds and want something with a Boodles twist,” says Boodles managing director Michael Wainrwight.

Boodles has risen to the challenge and created more quirky lines than the traditional pieces that the chain founded its business on in 1798. A perfect example of this adaptive creativity is its contemporary Raindance ring.

The platinum ring is decorated with more than 4ct of brilliant-cut diamonds, has the appearance of a stacking ring and retails from £7,500 to £32,000 depending on the diamonds used. The ring has now been recognised by prestigious art and design gallery The V&A and will be displayed within its permanent jewellery collection.
Boodles’ Raindance ring has been selling to individualist luxury shoppers for a decade now and while demand is still strong,

Wainwright says buying patterns have shifted considerably and luxury impulse purchasing is a distant memory. He says: “The difference today is that many of our customers who have bought the Raindance ring may have seen it in an advert a year or so ago and have saved up for a birthday.”

Wainwright also recognises that Boodles customers are driving a harder bargain. “They will shop around and buy at the best price they can,” he says.

Another way to offer shoppers a unique experience is to offer a bespoke service. Luxury London boutique Guy&Max strongly advises its customers to customise the jewellery designs it has on display in store to achieve a unique purchase.

“Rather than buying off the peg they are encouraged to choose the stone and size,” says co-owner Guy Shepherd.

De Costa believes that retailers can go one step further with bespoke services and act as a middle man between shoppers and jewellery designers. “Certain retailers are definitely wising up to the fact they can offer their clients a commission service through their designers,” she says.

As well as catering for domestic luxury shoppers, jewellers – particularly those in tourist hotspots such as London – must keep an eye on the tastes of the international luxury shopper. While the Western shopper is looking for subtle investment pieces, shoppers from the East are hungry for big-ticket bling, logos and brand experience.

But pulling the markets together is a common desire. Despite more conspicuous tastes, Eastern shoppers are still looking for trendsetting one-offs.

Boodles’ high-end jewels cater for flashy Eastern shoppers who view the British brand as exclusive because it is not overexposed on the international market. “The fact that Boodles is slightly lesser known is no bad thing,” says Wainwright.

According to Nathalie Kabiri, Middle Eastern shoppers, who account for a third of all retail purchases in London, are driving luxury shopping trends in the UK.

“Because the Arabs have so much money, they are trend setting and are leading the field in how the wealthy are spending,” she says.

“They have a lot of choice being thrown at them and now they are discerning and this refined selection is being mimicked by what London consumers are doing with their money. They are still buying from the same luxury brands but do not want anything that is run of the mill.”

The goal posts for genuine luxury have been moved back to where they were originally and the market is once again led by old-school glamour, bespoke products and personal service.

Just as the charm phenomenon has exposed a desire for individuality in the lower and middle markets, high-end bespoke and one-off luxury designs are demonstrating that from the high street to Bond Street, jewellery shoppers want to stand out and feel special.

And as the good times – if not the boom times – creep back, retailers need to wake up to the concept of unique retail experiences that is moving the industry into the new dawn of luxury consumerism.

Authors

*

Related posts

Top