Tectonic Shifts: COVID-19 Will Accelerate Changes in Jewellery Industry

From Asia to the Americas, Platinum Guild International’s 2020 Platinum Jewellery Business Review highlights how business drivers in 2019 will accelerate and lead to recovery in 2020.

The coronavirus pandemic has disrupted the world and businesses are searching for future trends and strategies in a post-COVID-19 world. For platinum jewellery, the drivers of business growth in 2019 have been thrown into even bolder relief by the pandemic, and point the way to a post-Covid 19 recovery. Digital consolidation, mid-market extinction, and branded storytelling are the focus in the Platinum Guild International (PGI) 2020 Platinum Jewellery Business Review (PJBR).

The 2020 PJBR surveys more than 1,000 manufacturers and retailers, in addition to over 4,000 consumers to provide the world’s most comprehensive and in-depth analysis of platinum jewellery’s performance in 2019, and COVID-19’s impact on consumers’ minds and wallets in each of the four key platinum jewellery markets: Japan, China, USA and India.

“The initiatives that grew the platinum jewellery business in 2019 tapped into tectonic shifts that will only be accelerated by COVID-19. We now see this playing out in real time. Social distancing has led to an upsurge in digital shopping, but digitalisation works best when woven into a seamless strategy to engage consumers across multiple touchpoints. Jewellery, a category still too generic in its approach, needs more products focusing on consumers’ unmet needs that create strong and differentiating brand stories. And it’s time for the jewellery industry to get off the fence and stake a territory far from the middle,” says CEO Huw Daniel of Platinum Guild International.

Trend 1: Digital Consolidation

Digital is no longer a straight line, but a key element in any omni-channel experience. Brands need to be agile in consolidating how consumers shop to convert consumer engagement into purchase in a socially distanced world. In 2019, a number of PGI programmes managed to seamlessly connect the dots on the consumer journey.

Created through a collaboration between PGI USA and PGI Japan, Platinum Born fashion jewellery brand was launched in the US to meet an unmet need for luxurious yet accessible everyday jewellery for self-purchase. The brand went online in 2019, leveraging strategic digital marketing, social media, and celebrity endorsement, to take platinum jewellery beyond platinum’s traditional stronghold in bridal, diamonds and high-end jewellery stores. PGI expanded influencer programmes and analysed online consumer purchasing behaviour to accelerate conversion. Such efforts, combined with expansion in sales channels, including Saks Fifth Avenue’s online platform, drove a 64% year-on-year growth in units and 39% year-on-year in value in 2019.

In the past 6 months alone, China has seen an increased rate of digital consolidation, with the addition of livestreams, short videos, and social networks. Working closely with China’s leading retailers, PGI China utilised those platforms to amplify the power of Key Opinion Leaders (KOLs) and celebrities. In November 2019, PGI launched a Reboot Campaign for the platinum jewellery retail business, province by province. Starting with 252 retail stores and 7 manufacturers across 5 cities in Guangdong Province, and targeting 30 million potential consumers for platinum jewellery, the integrated programme works on the 5 Ps of Marketing to combine targeted digital marketing with event-driven omni-channel campaigns, and saw platinum jewellery sales growth of participating stores reaching as high as 119% year-on-year. This blueprint will now be reapplied as retail gradually reopens in China.

Trend 2: Branding and Storytelling

In 2019, consumers in key markets showed greatest interest and affinity for platinum jewellery presented in branded collections launched by PGI, such as Hello Me, Platinum (Japan) and Men of Platinum (India). A majority of consumers surveyed¹ express their willingness to spend more or the same on precious jewellery than pre-COVID-19 after things return to normal, and strong brands that tell a compelling story will lead the way to recovery.

Few if any, jewellery brands explicitly target mature consumers. Yet in Japan, the 60 year and older age group is a heavy jewellery buying demographic, who also own 60% of the country’s private assets, a majority held in liquid assets. PGI launched Hello Me, Platinum, a collection of platinum jewellery created to showcase the beauty of platinum for sophisticated women with discerning taste. The branded collection celebrates the discovery of a new self in later life and how that life can be lived richly. Now available in 63 stores across Japan, the collection contributed to a 3.5 percent year-on-year ounce growth for non-bridal platinum jewellery.

In India, 2019 saw the launch of Men of Platinum, a branded collection capturing the needs of a new generation of young and affluent male consumers seeking a more contemporary expression of their personal success and value. The early phase of omni-channel marketing from both PGI and retail partners enabled the brand to reach 500 stores across 23 cities within just 4 months of launching. Participating retailers reported an 82% year-on-year sales growth during the campaign period. Riding on the successful launch of Men of Platinum and continuous improvement in conversion of sales and product stock-turn, India remains the fastest-growing platinum jewellery market with a 14% year-on-year increase in partner retail sales, despite falling store traffic caused by rising gold prices and an economic slowdown.

Trend 3: Mid-Market Extinction

Finding and owning the right territory with the right business model is becoming a necessity, especially in a world that has become more competitive overnight. As traffic to stores has declined, driving higher margin sales has become an even greater priority for jewellers.

Season of Love drives conversion to branded platinum within a sea of generic low margin jewellery in India. The programme has a multi-pronged strategy that drives traffic to stores, creates upsell opportunities and rewards high performing stores and sales staff through a sales-linked award programme. The collection creates an aspirational positioning for platinum in India targeting young couples seeking a more progressive approach to their relationships. Season of Love, a platinum category conversion programme expanding to over 1,200 stores across 270 cities in 2019, delivering 40% growth, and will be a cornerstone of PGI India’s business recovery plans after the lockdown is lifted.

Consumers re-evaluating what’s meaningful in life

The global pandemic has disrupted jewellery business globally, but it also provides opportunities. In platinum’s four key markets, the majority of consumers surveyed¹ are re-evaluating their priorities in life and show their willingness to spend the same or more on jewellery than pre-COVID-19, either to feel good about themselves or to express appreciation for their loved ones after this challenging time. Jewellers who are prepared to meet that need will benefit, and platinum, the precious metal most strongly associated with love and meaning will be an integral part of that message.

Courtesy:Businesswire