Laura McCreddie, Editor of Retail Jeweller, gives an overview of the UK Jewellery Market and explains the last two to three years can probably be best described as a mass of contradictions. There are those retailers who will tell you they are struggling and those who will tell you they are doing well and have the money to either refurbish their stores or expand.
Retailing occupies a large and vital part of the UK economy, but for the UK consumer, shopping has become a key leisure activity and an important part of people’s lives. More than a third of all UK consumers spending go through shops. And given its special place as the ultimate luxury or special gift, jewellery is one of the key indicators of consumer confidence.
The last five years have without doubt been challenging for the UK economy, as they have for every developed economy around the world. Retailing has faced enormous pressures with consumer spending slowing down as households adjust to tighter budgets. This has been further compounded by the arrival of the digital revolution which has led to the rapid expansion of new shopping channels that incorporate the internet, mobile and social media.
And for a nation that loves to shop, the reality is that jewellery retailers are rapidly adjusting to this new retail landscape and learning how to serve today’s jewellery buyers. There is clear evidence that consumers continue to have a desire to shop and want to find new and exciting products, and will spend when they feel it is right.
This new retail world calls for good retailers to become great retailers, and we are already witnessing this with strong independent retailers emerging as well as resurgent department stores and highly focussed multiple jewellery retailers.
With jewellery, there is also a somewhat of a split between volume and brands that are more expensive. However, one of the biggest differences in the jewellery market is the division between known brands and collections that are either the product of a designer-maker or ones that aren’t instantly known to the UK audience.
About 10 years ago, brands didn’t really hold sway in the UK jewellery market – it was always about the own name ranges every high-street jeweller stocked. However, with the emergence of certain well-known names, all that changed. The interesting thing is that their rise to prominence caused a backlash, and retailers are looking for things now that are a little bit different from their competitors but that also have a sense of individuality, both in terms of what they can offer the retailer and also
the story of the brand that they can then communicate to the consumer.
Thanks to the economic climate, when it comes to jewellery an element of the personal is key, whether that’s in the way the consumer can pick and choose elements to create their own jewellery story or the retailer being able to explain to the customer how they came across this brand that, as yet, no one knows about.
The UK jewellery market has come to mirror the twists and turns of the UK economy. After five very tough and unpredictable years where economic difficulties have hurt both the general retail sector and jewellery retailers just as hard, we are starting to see some positive signs that the sector is finding a new confidence.
Market forecasts from some of the leading research houses are united in their belief that the UK jewellery sector will see recovering growth over the next five years. According to Marketline, the UK market for jewellery and watches will see compound annual growth of 2.1% from 2012-2017. Key Note market researchers say that the market will grow by 10.2% between 2013 and 2017.
Jewellery is also one of the most popular gift items which consumer research shows people value the most. Writing in a recent issue of Professional Jeweller magazine, the editor, Rachael Taylor quotes their exclusive Euromonitor research which shows that the luxury jewellery sector now accounts for 25% of the overall UK jewellery market and delivered growth of 5% in 2012. According to the research, luxury jewellery and watch sales hit £1.12 billion last year. At the opposite end of the market, costume, or fashion jewellery continues to occupy an important and growing portion of spending. Whilst not made of precious metals and stones, it is seen by fashion brands and fashion retailers as a key part of their overall offer and consumers have responded to that.
UK JEWELLERY KEY FACTS:
£600m Costume jewellery market value (Mintel)
£1.12 bn Value of UK luxury watch and jewellery sales in 2012 (Euromonitor)
+£100m Market value in the last 5 years (Mintel)
Acknowledgment: i2i Events Group report on “The UK Jewellery Market Opportunity”