The jewellery industry has undergone significant shifts – some reactive but many more enduring – during the Covid-19 pandemic, which has battered the world for over a year now. In this multi-part special report, JNA examines the forces shaping jewellery retail in key markets and segments.
Virtual try-on solution using Augmented Reality technology
Online channels boost jewellery retail amid the pandemic
De Beers’ solitaire line targets the bridal and self-purchase markets
Pt Moment jewellery in platinum
This article first appeared in the JNA May/ June 2021 issue.
Digital adoption, changing consumer priorities and emerging niche segments are redefining jewellery retail across markets amid the coronavirus pandemic. Sales are being buoyed too by discretionary spend – and in a number of countries, stimulus cheques – diverted from leisure travel, dining at restaurants or entertainment.
Virus-containment efforts along with medical precautions accelerated digital transformation in the jewellery industry as homebound consumers headed online to shop.
E-commerce and omnichannel retail solutions kept consumption humming despite lockdowns and social-distancing regulations. According to McKinsey & Company’s Covid-19 Europe Consumer Pulse Survey in the first quarter of 2021, 48 per cent of respondents in the UK, Germany, Italy, Spain and France bought jewellery online since the pandemic started. And 17 per cent said they planned to continue doing so after the coronavirus crisis.
Augmented-reality software, do-/design-it-yourself jewellery options and digital customer interfaces narrowed the gap between online sales platforms and brick-and-mortar stores.
Contactless payments grew their market share during the pandemic and are likely to remain important in the next normal, with people gaining trust and confidence in e-wallets and online purchases.
Consumer sentiment studies released by McKinsey in late March found that most shoppers intended to sustain their new digital behaviours – increased online purchases and using online buying solutions such as social media, among others – in a post-pandemic scenario.
The digital movement extends to diamond jewellery retail. According to the Global Diamond Report 2020-21 by Bain & Co and the Antwerp World Diamond Center, around 20 per cent of diamond jewellery retail sales last year occurred online. Major diamond jewellery retailers posted up to 60 to 70 per cent year-on-year sales growth in their online channels, it noted.
Physical stores remain relevant though. “Despite the increase in online sales and a strong preference for online research before making purchases, nearly all consumers (90 to 95 per cent) still prefer to buy diamonds in brick-and-mortar stores. Consumers value the opportunity to see and touch jewellery, and they benefit from in-person advice and other personal services,” the report further revealed.
The diamond trade can improve online retail sales by providing certificates, warranties and reviews; enhancing convenience through free delivery and returns or “try before paying” programmes; and giving additional discounts and promotions for online purchases, it added.
Brand loyalty saw fundamental shifts too. The plethora of options online led buyers to try a wider sampling of brands, noted McKinsey in its consumer sentiment reports.
While quality and value still determined purchase decisions, customers – particularly of the Gen Z and Millennial cohorts – increasingly added values to the list, gravitating towards brands that shared their ideals. The latter often included sustainability, social responsibility, diversity and corporate governance.
The Bain & Co report indicated that 60 to 70 per cent of younger consumers in China, India and the US consider sustainability when deciding on diamond jewellery purchases.
“Regarding diamond jewellery, social impact is the top sustainability concern for US consumers. In China and India, consumers care most about environmental preservation, conflict-free supply chains and carbon footprint,” it disclosed.
The coronavirus crisis heavily influenced design trends as well. Digital communication boosted demand for “Zoom-friendly” jewellery, from studs, hoops and short dangling earrings to brooches, chokers and pendants.
According to the Platinum Jewellery Business Review Q4 2020 by Platinum Guild International (PGI), earrings and ear studs are extremely popular amid the Covid-19 pandemic due to consumers’ increasingly online lifestyle and mask-wearing habits.
Jewellery likewise evolved into vehicles for self-expression, with many purchasers seeking meaningful pieces and personalised items. Non-traditional shapes, forms and materials made their way into jewellery collections. Asymmetrical cuts, gemstones with inclusions, functional pieces and opaque gems brought that extra layer of character that appealed to buyers’ sense of individuality.
Pearl jewellery rose in favour too, thanks to ringing endorsements by US Vice President Kamala Harris, film and music celebrities, and various members of the British Royal Family in prominent public occasions.
Wedding jewellery sales took a hit in most markets last year as couples rescheduled nuptial plans due to the pandemic. With restrictions easing in some parts of the world, micro weddings are now taking place, leading to scaled-down ceremonies and jewellery.
In India, the return of weddings in the first quarter helped bolster gold jewellery sales, said the World Gold Council. Its Gold Demand Trends Q1 2021 report explained, “Wedding-related buying supported jewellery demand through Q1, boosted by a degree of pent-up demand from weddings postponed from 2020. Organised retailers ran offers and discounts to lure consumers toward wedding purchases.”
The female self-purchase market notably gained steam across product categories during the pandemic.
PGI’s Q4 2020 review noted that female self-purchase of precious jewellery was robust last year and will continue to gain strength in 2021.
Its research showed that 77 per cent of Chinese and Indian female respondents along with 59 per cent of American female consumers bought non-bridal jewellery for themselves in 2020. And over 80 per cent of Chinese and Indian and 67 per cent of American female respondents plan to buy themselves non-bridal jewellery this year.
Half of the Chinese and Japanese women surveyed said they preferred precious jewellery in platinum. In China, platinum was most sought after by Gen Z and Millennial females aged 18 to 45, widely viewed as the future drivers of jewellery consumption in the country.
In response, PGI developed and launched branded collections in its four key markets to cater to the female self-purchase segment.
In the US, the Platinum Born Collection features versatile jewellery with heightened sparkle. The Pt Moment Collection, available in over 1,000 stores in China, reflects the aspirations of millennial consumers who seek affirmation in a rapidly changing society, while Platinum Women in Japan endorses female empowerment and appreciation of self-worth. In India, PGI bolstered its Platinum Evara Collection with the #SheLeadsWithHeart marketing campaign that celebrates female leadership through meaningful pieces.
Zhenzhen Liu, PGI’s director for Global Corporate Marketing, said the report’s findings provided a compelling rationale for bridal jewellers to expand their offerings and target female self-purchase as a new consumer segment by leveraging platinum fine jewellery.
Treats and gifts
Self-purchase also ranks high among reasons for diamond jewellery sales in the US and China, according to Bain & Co. In India however, wedding and relationship events account for most diamond jewellery purchases at 54 per cent, followed by gifting at 33 per cent and self-purchase at 27 per cent.
The Natural Diamond Council (NDC) sees great potential for self-purchase in the US.
Its Consumer Insights Report on Diamond Desirability (US) noted that American Millennials and Gen Z acquire natural diamond jewellery both for themselves and to gift. “Together, these generations account for 38 per cent of the country’s adult population but more than 60 per cent of demand for natural diamond jewellery,” it stated.
One in five of the study’s respondents purchased luxury jewellery within the last 24 months, 50 per cent of which included natural diamonds. Half of the latter were self-purchases. In addition, almost 80 per cent of purchasers bought natural diamond jewellery as a gift.
Of the 37 per cent of respondents intending to buy fine jewellery this year, 20 per cent were likely to pick a natural diamond piece.
Meanwhile, 27 per cent of respondents expected to receive a fine jewellery gift in 2021, with 12 per cent specifically anticipating natural diamonds, the NDC study indicated.