The year of 2017 finished on an uplifting note for the jewellery sector in key markets worldwide, including the United States. With the global gems and jewellery market poised to reach US$292 billion by the end of 2019, this report reviews the latest 2017’s successes as they are already moving into 2018. It starts with a new word for the new year.
Introducing ‘demi-fine’
The 2018 sales buzzword means the same in every language. ‘Demi-fine’, a term that refers to a mixing of precious and non-precious materials, especially in jewellery, has been top of mind and on the tips of tongues. “The demi-fine customer is looking to accessories, while the fine jewellery customer is looking to make a significant purchase,” said Elizabeth von der Goltz, global buying director at Net-a-Porter, which expanded its demi-fine offerings by 250 percent in 2017 into 2018.
Emily Gordon-Smith, head of fashion at Stylus, a trend research firm, stated that women in their 20s and 30s will shift from the “it-bag” and the statement shoe to demi-fine or semi-luxury jewellery.
An emerging brand, Wwake, offers minimalist demi-fine designs with opals or diamonds for customers who “want to invest in quality, heirloom materials, but do not want something that looks ostentatious,” said Wing Yau, founder. Wwake prices start at under US$300. Anissa Kermiche’s namesake line with an average ticket of US$600 also embraces the 2018 demi-fine female self-purchaser.
London’s Selfridges significantly increased its demi-fine investment for 2018 to include mid-priced brands Alighieri, Annalise Michelson and Charlotte Chesnais. “Brands often create two tiers of collections, one ‘demi-fine’ and one ‘fine’; offering jewellery at £300 to £400 is the new sweet spot for jewellery," said accessories buying manager Josie Gardner.
Barneys New York 2018 assortment demi-fine strong. “We’re seeing the ‘demi segment’ grow with impressive comparisons from last year; it’s an opportunity for all doors,” noted Sarah Blair, Barneys senior vice president of women's accessories.
“Some bridge brands have a new title,” Andrew Jassin, managing director of Jassin Consulting Group commented. “But demi-fine doesn’t apply to all mid-priced jewellery. Beyond being precious, styles need to be trendy and refined.”
Jassins’ statement contains a strong 2018 warning. “Demi-fine” is indeed the new, now word, but so was “couture” when introduced.
All that glitters
The World Gold Council reports global gold jewellery demand fell three percent in 2017 citing a weakness in India’s consumption. Yet India sustains a strong gold retail presence through companies like Titan’s Tanishq stores. Vibrantly coloured gemstones, pearls and “Bollywood” designs will move into 2018, all in gold.
The United States enjoyed its strongest Q3 since 2012 in gold jewellery while China’s demand increased to 13 percent after 10 consecutive quarters of decline. China’s gold market remains weak as demand is 15 percent below the 5-year average. In 2018, gold in e-commerce will work to China’s advantage. Floral gold designs continue to trending for spring/summer 2018 in all parts of the world.
Major brands & auctions
While Chow Tai Fook Jewellery Group (CTF) reported a decline in same store sales in mainland China, Hong Kong and Macau, retail openings including the Shanghai Disneyland Resort, Tianjin mall and department store Zhengzhou should see younger, bolder customers. Interactive POS systems placed by entrances will have peers seeing peers having fun in-store thus drawing more of the same. An agreement with Hearts on Fire by Stephen Webster will keep CTF current.
Richemont SA, reported sales of 3.09 billion euros (US$3.3 billion) in the last three months of 2017. High revenue regions were in Europe, Asia and the Americas. A major effort to take down counterfeiters stealing revenue from top producers, Chloé and Cartier should increase 2018 sales, but consumer confusion and potential brand equity damage may remain long-term. Hybrid merchandising of timepieces with sister branded jewellery will be tested in select markets.
Signet’s total sales were down US$59.2 million or 3.1 percent, due to a “credit outsourcing transition,” according to late 2017 reports. Signet’s Sterling ecommerce sales, were up 47.7 percent, reaching US$210.5 million. Prestige watch brands sales and strength in ecommerce noted late last year should bloom in Q1/Q2 of 2018.
LVMH’s watch and jewellery sales rose over 10 percent in 2017. Its brands include Hublot, TAG Heuer, Bulgari, Chaumet and Fred. 2018 will see more lavish video showcasing close-ups of finished diamond jewellery over hand crafted shots of the past.
Making the 2017 Fortune 500 list is Bangalore-based Rajesh Exports. After acquiring Valcambi, the world’s largest gold refiner, some investors were concerned about short-term profitability. Those concerns were silenced when Rajesh posted a profit of Rs12,436.33 million, a 16.34-percent gain from the previous fiscal. While success surrounds this top exporter, new UAE government jewellery import duties, levies and the appreciation of the rupee against the dollar, will add financial pressure in 2018.
Auction houses broke jewellery sales records in 2017 creating an optimistic 2018. Christie’s global sales totaled US$556.7 million, US$8.9 million coming from online auctions. Christie’s set nine world jewellery auction records including The Pink Promise sold at US$32,163,900 and de Grisogono’s 163.41-carat D flawless diamond sold for US$33,705,900. Sotheby’s Jewellery ended 2017 at US$551.3 million selling four of the five most expensive jewels ever offered. The CTF Pink Star, a 59.6-carat diamond sold for US$71.2 million and the most expensive earrings ever at auction, the Apollo Blue and Artemis Pink diamonds, at 14.54 carats and 16 carats, respectively sold for US$57.4 million. The one percent continues to see significant investment value in high jewellery this year.
Online sales
Look for new forms of personalisation in home trial options offering consumers a virtual ‘try on’ through 3D online, real-time apps. Beyond closing sales, brand awareness should soar on social media in 2018. Postings will feature people ‘wearing’ their desired or purchased jewellery item with hopeful viral shares.
SpendingPlus, an analytic tool, noted the largest year-over-year increase in online since 2011. Online shopping increased 18.1 percent while jewellery sales grew by 5.9 percent during the holiday season.
McKinsey & Company expects the luxury category’s online sales to double to 12 percent by 2020, forecasting 18 percent of all luxury sales will be made online by 2025. That would increase digital luxe sales to over US$79 billion annually.
With 84 percent of smartphone users in the United States, shopping online in 2018, apps like “Shop Instagram” may increase e-commerce growth. Savvy jewellery companies will use pull tactics verses outdated push maneuverers to post the highest gains.
Story of the stone
For retailers, the idea of content marketing proved highly relevant in 2017. One powerful word for mined diamonds in 2018: Natural. Underling the word ‘natural’ when offering mined diamonds creates an instant consumer emotional bond.
In 2018, synthetic stones will be produced by more companies at a faster rate. This will reduce retail pricing and create force a declined long-term value. Natural diamonds historically increase in value and soon consumers will easily separate the synthetics from naturals by the price point alone. Retailers should welcome both addressing varied interests and pocketbooks.
Mine-to-market narratives attract millennials and create conversation. Conversation leads to trust, and trust leads to sales.
2018-minded retailers will greet customers by walking around the counter, not frozen behind it. Typical window and in-case props should be replaced with life scenes, connecting people to product by showing slice of life visuals. Lastly, social media will get truly social through Instagram in-store events and live feeds truly uniting faces and places. (Author Dan Scott is a brand architect with Luxe Licensing.)
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