Words by Gary Ingram, CEO, TheDiamondStore.co.uk
It’s only July, but jewellery retailers already have their sights on Christmas and the year beyond.
On that note, I thought it would be interesting to revisit a McKinsey report from five years ago, called A multifaceted future: The jewellery industry in 2020. I was curious to see how many of the predictions in it ring true today.
Bearing in mind the report was published in 2014 and heavily based on apparel trends, I was impressed. The tendencies it forecast, such as multi-channel sales and growth of branded jewellery, are accurate reflections of where we’re at now.
Then an interesting topic caught my eye: hybrid consumers.
Traditionally, jewellery consumers fall into clear segments outlined by income. There is a tendency to think of customers as Budget or Premium Buyers who shop for gifts at either end of the price scale.
The hybrid consumer, however, chooses to spend on both budget and premium jewellery products when shopping for themselves.
I call it the “Kate Middleton phenomenon”.
The Duchess of Cambridge, one of the biggest fashion influencers of our time, is known for combining an expensive pair of designer shoes or a handbag worth thousands of pounds with a Zara coat or a dress from TopShop. Her sensible approach to fashion is frequently applauded, and her style is considered appropriate and timeless.
This ties in with a trend that we noticed here at The Diamond Store when we analysed our customers’ shopping behaviour over the last 24 months. More than half of our customer base consists of male gift buyers. However, we have a modest but fast-growing segment of Generation X female shoppers who, as confirmed by our exit surveys, are purchasing jewellery items for personal use, not gifts. Approximately 40% of these shoppers are buying a mix of high-end items and small affordable pieces or sample sale items.
So why are these hybrid shoppers emerging now?
Partly, I believe they are a result of recent economic growth and Generation X reaching middle age.
Additionally, I think the jewellery retail industry’s reaction to the Millennial market has played a role. In the last three years, many retailers have had to rethink product lines to satisfy both Baby Boomers and Millennials, two polar opposites of the market. It’s led to many jewellers introducing more “entry level” fine jewellery items to their ranges. In fact, I think the British jewellery industry as a whole has responded tremendously well to the Millennial challenge. The fine jewellery offering I see on the UK high street and online is huge and varied, at both ends of the price scale.
For the hybrid consumer, whose tastes, income and personal values fall somewhere in between those of the Millenial and Boomer, this “pick and mix” product variety is ideal. It’s great when you can treat yourself to a diamond 18K gold eternity ring for your 40th birthday, while still being able to afford a trendy pair of sterling silver earrings or a pretty 9K gold necklace to wear at the weekend.
Just as sensible dressing is a big part of the Duchess of Cambridge’s brand, I believe this small but growing customer segment is sending us a message. They want to indulge in luxury every once in a while… but they’re not going overboard in pre-2008 style.
My prediction for 2020? Jewellery brands that encourage their customers to build timeless and practical jewellery collections with a healthy mix of affordable and premium items will be at a definite advantage.