As analysts give us upbeat forecasts we dissect the product trends.
Analysts are upbeat about the prospect of Valentine’s spending in 2011, but how to make sure it’s jewellery and watches they’re spending it on? Rachael Taylor discovers that secret messages, exclusives and women seem to be the key to shoppers’ hearts.
It might have cut jobs, closed schools, dissolved quangos and obliterated interest rates, but it seems that the recession can’t hurt romance.
While analysts are forecasting spending cutbacks at Christmas, it would appear that the retail soothsayers believe Valentine’s Day spending is sacred.
“For Valentine’s Day, it doesn’t do a lot of favours for someone to scrimp on the presents so buyers are willing to spend more,” says Planet Retail global research director Robert Gregory.
He believes that rather than cut back on presents at this sensitive time of year, shoppers will save up for romantic gifts by cutting back on the more mundane spends in life. He adds: “We have seen a lot people cut back on going for lunch during work as they save up for more important parts of the year such as Christmas and Valentine’s Day in order to splash out.”
But it’s not just the romantic mood of the season that is teasing open the purse strings, the consumer mindset has changed dramatically since Valentine’s Day 2010.
George Wallis, chief executive of analyst MHE Retail, says that while the recession is still hanging over consumers’ heads, 2011’s Valentine’s shoppers won’t be as afraid of the credit crunch as they might once have been.
“Obviously a lot of people are facing cuts all around and wages are being held tight so I think that’s an overriding factor
which makes spending hard to come by, but on the other hand we’re more prepared now,” he says. “We know what’s coming and we know how to deal with it. It’s not a period of uncertainty anymore; people now know it’s not quite the Armageddon we thought it may have been.”
And while money might be tight, Gregory believes that shoppers have money to spend but says they have to believe in the product before they will part with their cash and so require a little extra persuasion. “There has been consistent evidence this year that people are still willing to spend on items that they believe in,” he says. “People did and do have the money there but they just have to be a bit more selective and save up for the items they really want.”
In order to give shoppers the little extra push they need, many jewellery brands are focusing on limited editions for 2011 to give consumers something extra special for their money.
Gina Stewart Cox has created pink versions of its friendship bracelets especially for Valentine’s Day. The brand is releasing the bracelets in January and the products will get a publicity boost as they are being featured on TV show Britain’s Next Top Model.“
Given that we are a new company we’ve not got our own statistics to compare on last year, however given the climate of 2010 we haven’t felt that we’ve been affected by it,” says Gina Stewart Cox, the brand’s eponymous designer. “We’ve had good sales and have been steadily growing over the year.”
Jewellery brand Rachel Galley is also working on exclusive lines for Valentine’s Day. As well as creating a limited-edition range for its website, the brand is designing a Valentine’s collection for TV shopping channel The Jewellery Channel.
The collection for The Jewellery Channel is a range of beaded necklaces with sterling silver heart charms. As a special service for Valentine’s shoppers Rachel Gallery is offering to engrave the heart charms with messages of love.
Secret messages such as those offered by Rachel Galley are proving to be a popular theme for Valentine’s Day 2011. Swedish jewellery brand Renaissance Life has created a heart-shaped locket that contains a tiny drawer that the brand says lovers can use to hide secret messages, and British designer Daisy Knight’s Roro line is a collection of hand-stamped jewellery that can be decorated with a message of the buyers’ choice.
Links of London is also getting in on the secret message theme. For the past few years the brand has created a limited-edition Valentine’s friendship bracelet, which has always sold out, and also a limited-edition charm. This year will be no different with the brand creating a coral and gold-coloured friendship bracelet and a charm in the guise of a silver key and heart-shaped locket.
However, the brand is also working on a new collection for Valentine’s Day called The Secrets Collection. As Professional Jeweller goes to press, Links of London is keeping its exact plans hidden for the moment but told the magazine that the collection will be “a brand new way to engrave jewellery and allow loved ones to give each other secret messages”. A spokesperson added: “It’s the same idea as a locket but it’s a completely different mechanism and the jewellery will look as normal unless you know the secret of where the message is hidden.”
All these products are predominantly aimed at women and traditionally the Valentine’s Day jewellery market has been geared up to male shoppers buying gifts for wives and girlfriends. But in 2011, it seems that the female shopper is taking a more central role in Valentine’s Day spending, on both herself, her friends and her partner.
“If you’re independent, it’s not only loving your partner it’s loving yourself,” says QVC merchandising director Judy Deuchar. She says that the TV shopping channel has seen an increasing number of women self-purchasing jewellery and also purchasing gifts for female friends, and it expects this female-led buying to take a central role in Valentine’s Day 2011.
Deuchar says QVC has also noticed an uplift in the number of women buying jewellery for men in the run up to Valentine’s Day. The retailer is trying to cater for this with a selection of male gifts and is also creating a male gifting opportunity within its new floristry venture that packages together flowers with cufflinks, as well as more feminine pairings such as flowers and necklaces or earrings.
The male jewellery market is an emerging sector and with an increase in female Valentine’s Day shoppers, 2011 could be the perfect year to push men’s jewellery as a gift, something that Gina Stewart Cox is planning to do.
“Male jewellery is actually somethingwe’re heavily promoting this year,” says Stewart Cox. “Our men’s range is quite subtle and we’ve sold a lot in our silver collection. Men don’t always feel comfortable buying jewellery so we’re seeing more women buying for their men or couples coming in and buying together. It seems to be an area of jewellery that is ever growing so we will be doing specific male products for the Valentine’s period.”
Watch brand and retailer Christopher Ward has also noticed an increase in the number of women shopping for men at Valentine’s Day. “When you think about Valentine’s, what pops into the head is what are they going to get the wife or girlfriend, but what we’re finding is it’s more about ladies purchasing gifts for men,” says the company’s eponymous founder Christopher Ward.
The brand has previously always aimed its Valentine’s Day marketing campaigns at women but is planning to turn this on its head in 2011 after trawling through its past sales data. “If you go back three years our campaigns have always targeted men buying for women but it’s actually the other way around,” says Ward.
Average sales at Christopher Ward sit around the £250 mark, but Ward feels that this is quite a high price tag for Valentine’s shoppers. “We tried to do high-end couture, diamond encrusted watches for Valentine’s Day but that was not the sort of money people are going to spend,” says Ward. “What they want to spend is more like £50. Valentine’s Day is not like Christmas.”
To encourage shoppers to break up into a higher price bracket for Valentine’s Day gifts, Christopher Ward is mulling running a sales promotion such as a £25-off voucher in the peak two weeks before February 14. “We’ll have a look at what the market is doing,” says Ward. We’ve done it in the past and it seems to work.”
Wallis at MHE Retail is in agreement that while Valentine’s shoppers won’t want to be shown as being stingy, they won’t want to break out of the mid market for romantic gifts. “Obviously all precious metals have gone up in price so I think it’s more likely that people will move a bit more over to sliver and there will be less 22ct and 18ct gold,” he says. “This will be reflected in the core market; obviously there are always people who can afford the higher end pieces but on the whole it’ll be the same level of spending, just on different goods.”
Wallis praises the “flexibility” of the jewellery market, saying that the bead phenomenon has made it easy for gift shoppers to enter at a low cost. He adds that he doesn’t think that January’s VAT rise will put Valentine’s shoppers off choosing jewellery. “I don’t think the VAT rise will affect the mass market given that the average spend is around £100 and under and once you mix emotions into the gift that extra couple of percent ceases to matter,” he explains.
Gregory at Planet Retail, however, is not so optimistic for the jewellery market’s chances of stealing spend away from other gift sectors for Valentine’s Day 2011. “In recent years we’ve seen a shift away from traditional gifts such as jewellery and instead we have witnessed the market lean towards other items such as entertainment and electrical products,” he says. “Valentine’s Day has become about more light-hearted, fun and practical gifts than your conventional chocolates and flowers.”
This means that retailers will have to work hard at getting shoppers’ attention in the crucial weeks before Valentine’s Day. Last year Signet opened up H Samuel and Ernest Jones pop-up shops at busy train stations in London to capture last-minute time-pressured shoppers. Multiple jewellery retail chain Azendi, meanwhile, ran a national ad campaign in titles such as The Times and Grazia to grab the attention of potential shoppers.
For 2011, Northampton retailer Steffans has a unique Valentine’s campaign planned. It is going to create brightly coloured heart-shaped lollies with spikes protruding from them, making them inedible, with the slogan “You can’t lick our brands” printed on the stick. This will be supported by an online campaign on its website.
“It’s about people thinking we’re giving them something that nobody else is,” says Steffans owner Steff Suter.
Jewellery is the most traditional of Valentine’s Day gifts, next to flowers and chocolates, but as Suter says, 2011 is about giving shoppers something different. Competition from other sectors is rife, and if Gregory is to be believed jewellery is not at the top of shoppers’ gift lists, so by enriching the experience through offering extras such as secret engraved messages or exclusive limited editions, retailers can make jewellery a more romantic choice. And with an increasing proportion of Valentine’s shoppers turning out to be women, romance sells.