EXCLUSIVE INSIGHT: What jewellers need to do to win market share in 2019

Chana Baram, a retail analyst at award-winning market research provider, Mintel, details the main opportunities and challenges facing firms in the jewellery industry this year…

According to Mintel estimates for 2018 and 2019, the UK jewellery and watch market is predicted to remain in growth, propped up by the luxury and high-end sector.

The weaker sterling as a result of the EU referendum vote has continued to bring in sales from tourism spending, and consumers continue to be drawn in by luxury watch brands and fine jewellery, which has helped the luxury market to flourish. However, many of the high street and value retailers have underperformed, and the market continues to suffer low levels of footfall.

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So, just what is driving the market and what are the main opportunities out there?

Online Retailing
Online retailing has become more prevalent, accounting for around 18% of all retail sales, according to the ONS. Indeed, Mintel’s latest Jewellery and Watches Retailing report highlights that 53% of jewellery or watch shoppers went online to purchase an item, compared to 65% who shopped in-store.

Jewellery and watch retailers must respond to this demand by developing a strong online or multichannel offering. An omnichannel approach is a must, something many brands have already discovered, providing customers with a seamless journey whether purchasing online or in-store.

Additionally, high-end retailers have become more accustomed to selling their wares online, and research for Mintel’s latest Luxury Goods Retail report shows that consumers purchasing high-end items are open to buying online. Luxury multi-brand pureplay etailers have already identified jewellery and watches as a growth area for their businesses, signalling even more competition for bricks-and-mortar stores.

Social Media
In this environment, social media and influencers are playing an increasingly important role. Consumer research undertaken for our Jewellery and Watches Retailing report shows that over one in three (35%) consumers say they use social media for inspiration when shopping for jewellery, rising to over half (54%) of those aged 16-34-years. Additionally, according to Mintel’s Digital Trends Quarterly: Online Reviews report, half (48%) of people and three quarters (75%) of those aged 16-34 have liked or followed a brand on social media over a three-month period.

Platforms such as Instagram give consumers access to a brand or retailer, regardless of its size. This has helped new brands without huge marketing budgets to get their name out there, which is particularly important as our consumer research shows that two in five (41%) jewellery shoppers would only purchase from a brand or retailer that they know. Social media is an invaluable brand awareness tool, even if it does not directly lead to sales. Many fine jewellery brands that are unattainable for most consumers use apps such as Instagram to increase awareness and put the brand name into the minds of young people that may be future buyers.

Additionally, some of the more niche brands give the option to purchase certain items over Instagram — directing users straight to the websites to purchase the products photographed.

Trends in Jewellery
More affordable options: The increased tendency to shop online for jewellery has made consumers more price conscious, as well as better enabled to compare prices across different retailers. As a result, 70% of jewellery shoppers feel that jewellery does not need to be expensive to be good quality. This way of thinking has led to several jewellery brands finding a gap in the market between fine jewellery, which tends to be made of very precious materials and be high in price, and fashion jewellery, which tends to be more affordable. The trend for demi-fine options has also increased, which is a nod to the idea of people purchasing less expensive, but good quality options. Additionally, with the rise of lab-grown diamonds and gemstones, even luxury brands are creating more affordable jewellery pieces.

Eco-conscious: Mintel’s previous Jewellery and Watches Retailing report, published in 2017, showed that 42% of UK jewellery and watch customers wanted retailers to sell more ethically sourced jewellery. Retailers should ensure that brands stocked are ethical and emphasise what they are doing to combat ethical issues in jewellery.

Customisation: The previous Jewellery and Watches Retailing report highlighted that 35% of those who purchased jewellery or watches would pay more for items that can be personalised. This figure jumps to 51% consumers aged 16-34 and several retailers are reaching out to the millennial customer through personalisation options. Customisation is the perfect opportunity for jewellery retailers to branch out into more experiential retailing, which has become prevalent across fashion retailing and department stores in order to bring customers in-store. Some jewellery brands offer personalisation stations, where customers can explore different design ideas, hand pick gemstones, and design their perfect piece.

Diversity: Fashion retailing has been taken to task for not being diverse enough in its marketing approach, and this is something jewellery retailers should be taking note of, as 43% of watch buyers would like adverts to feature a more diverse range of people.
One factor that has a big impact on the jewellery sector is marriages. According to the ONS, marriage rates in Britain between men and women are declining. Same-sex marriages and partnerships, on the other hand, are on the rise, and now make up 3% of all marriages in Britain. Same-sex marriages should be an area of focus for jewellery retailers and brands, which can showcase different jewellery options and advice for same-sex couples.

Men’s fashion jewellery should also be a market that is further tapped into. We see in our research that men are increasingly spending more and are more interested in their appearance. Jewellery is no exception, and there is a trend for men to wear both fashion jewellery and precious jewellery with gemstones. Men are now wearing long necklaces, rings, bracelets and bangles as a way to express themselves and also to emulate male celebrities that have recently been seen wearing both fine and fashion jewellery. As traditional rules regarding masculinity and femininity are breaking down, particularly among younger generations, both men and women are opting to buy into many items previously perceived as exclusive to one gender. Whilst it is unlikely that the men’s jewellery market will truly compete with the women’s any time soon, there is no denying that this part of the market is becoming increasingly important. More brands and retailers should be giving men’s jewellery dedicated space in-store.

Chana joined Mintel in 2017, writing reports for the retail sector. Chana previously worked as a Catagory Analyst for the fashion team at market research company Kantar Worldpanel, working with data and delivering presentations to clients. She has a BSc (Hons) in International Fashion Management from University of the Arts, London.

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