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Tectonic Shifts: Covid-19 Will Accelerate Changes In Jewelry Industry

Tectonic Shifts: Covid-19 Will Accelerate Changes In Jewelry 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 jewelry, 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 jewelry’s performance in 2019, and COVID-19’s impact on consumers’ minds and wallets in each of the four key platinum jewelry markets: Japan, China, USA and India.

“The initiatives that grew the platinum jewelry 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 digitalization works best when woven into a seamless strategy to engage consumers across multiple touchpoints. Jewelry, 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 jewelry 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 programs managed to seamlessly connect the dots on the consumer journey.

The Platinum Born fashion jewelry brand was launched in the US to meet an unmet need for luxurious yet accessible everyday jewelry for self-purchase. The brand went online in 2019, leveraging strategic digital marketing, social media, and celebrity endorsement, to take platinum jewelry beyond platinum’s traditional stronghold in bridal, diamonds and high-end jewelry stores. PGI expanded influencer programs and analyzed online consumer purchasing behavior 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 utilized those platforms to amplify the power of Key Opinion Leaders (KOLs) and celebrities. In November 2019, PGI launched a Reboot Campaign for the platinum jewelry 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 jewelry, the integrated program works on the 5 Ps of Marketing to combine targeted digital marketing with event-driven omni-channel campaigns, and saw platinum jewelry sales growth of participating stores. 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 jewelry 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 jewelry 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, jewelry brands explicitly target mature consumers. Yet in Japan, the 60 year and older age group is a heavy jewelry buying demographic, who also owns 60% of the country’s private assets, a majority held in liquid assets. PGI launched Hello Me, Platinum, a collection of platinum jewelry 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 jewelry.

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 jewelry 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 jewelers.

Season of Love drives conversion to branded platinum within a sea of generic low margin jewelry in India. The program 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 program. 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 program 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 jewelry 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 jewelry 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.

Additional details of results and insights are shown in the 2020 Platinum Jewellery Business Review and the accompanying videos, which can be found via
platinumguild.com/2020-platinum-jewellery-business-review/
.

About Platinum Jewellery Business Review (PJBR)
The Platinum Jewellery Business Review is an annual report published by PGI based on surveys conducted among PGI’s manufacturing and retail partners, together with industry surveys conducted by independent sources, specifically analysing fabrication ounce demand, retail sales, and trade sentiment in the four major platinum jewelry markets of India, China, the US and Japan.

About Platinum Guild International
Platinum Guild International is a worldwide marketing organisation dedicated to creating, expanding and strengthening consumer and trade markets for platinum jewelry. Through various programs both to consumers and in collaboration with jewelry retailers and manufacturers, PGI creates consumer ounce demand by identifying and developing platinum jewelry opportunities with its partners. Jewelry development has a strong track record in delivering results. Since PGI was founded in 1975, platinum jewelry has contributed over 80 million ounces of demand. PGI is headquartered in Hong Kong and has offices in China, India, Japan and the US. For more information, please visit www.platinumguild.com.



AT: 05/29/2020 05:54:18 PM   LINK TO THIS NEWSLETTER
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