The watch and jewellery industry is expanding. After surviving the economic crisis, the industry turned towards an increasingly useful means for commerce and communication which is the internet. OhmyLuxury.com analysed for you the prospects for this online market.
A rapid transformation of the watch and jewellery industry
With a number of points of sale superior to 9000 and 41000 watch and jewellery companies, this sector is prosperous. Indeed, whilst sales of jewellery, watches and other luxury products have a tendancy to increase during festive times, specifically christmas, 24% of sales are not for any particular occasion thus showing how trivial the act of buying luxury goods has become.
Amongst the greatly prized, in the top 5 of all the time favourites are earrings, rings and necklaces, bracelets and lastly pendants and jewellery sets. While gold jewellery had been pursued after the crisis, in 2014 it has lost lure. Now the trend is silver and white gold which bring an air of subtle grace and grandeur.
The market for watches and jewellery has matured over the years and if the great houses dominate the market due to their expertise and long lasting prestige, the competition is increased and relying its strength by merging brands. Companies like Thom Europe (Marc Orian, Tres’Or and Histoire d’or) pose a threat to the great houses who are forced to expand their consumer target and target market. Such was the case for Tiffany & Co which today offers luxury models for the mere price of 600 euros. Luxury is increasingly affordable hence no longer available only to the rich and famous.
The same solution could be used in the luxury watches’ market. In effect, the the interest for watches in general has decreased by 3% between 2013 and 2014 . This includes a 5% decrease of midrange luxury watch sales where prices range from 1000 to 3000 euros. Nonetheless, sales of models worth more than 3000 euros have remained stable despite the crisis. It appears that midrange luxury is no longer that attractive to the consumer as opposed high priced extreme luxury goods.
On line luxury: a means to fight the competition
In 2010, th watch and jexellery industry was worth 5.3 billion euros. Exportations in this sector in 2014 represented about 3 billion euros, whilst importations were worth 3.7 billion euros. If we look closer at these numbers, it can be seen that online sales represents 18% of the market. Every year the online sales of jewellery increase by 20%. Clearly the sale of luxury products on line has great potential and the big companies did not think twice about expanding their network into the on line world. Recent companies, on the other hand, decided to go all in and only faocus on online sale of luxury products, giving them greater flexibility and exclusivity than their competitors.
The usual strategies of the watch and jewellery industry were of course rethought in order to adapt them to this new market. The consumer target between 25 and 45 years old, need to be reassured as to the quality of the product bought on line since trying on the model is impossible but the price very high.
Consequentially, brands need to focus their advertising campaign on the quality of their products and the high quality of their services. The aim is to reassure the client used to entering a boutique in a luxurious and elegant background and garanties. Some ideas that have had a positive impact on clients have been the creation of live or on line events, loyalty cards or other types of loyalty systems which maintains contact between the company and its clients of on line luxury.
Some companies have already prospered on the on line world such as goldsmith Christofle who deeloped his range of jewellery on line. On line luxury is flourishing and companies who have not followed this lead will most likely be left behind considering the speed with which it is developping.