Meanwhile, Kering Group posted strong growth in its “other houses” segment which includes its luxury jewellery and watch divisions. The company saw a 29 per cent increase year on year to €714.3 million for the first quarter of FY21.
“It’s counterintuitive but consumer shopping behaviour for jewellery during Covid has dramatically increased,” Marty Hurwitz, founder and CEO of data and research company MVI Marketing Ltd., told Inside Retail.
“Covid has been a boon to the jewellery industry.”
According to Adelle Perry, founder of Adelle Louise Bespoke Diamonds, diamonds have taken on even greater meaning during the pandemic, as people are looking for timeless gifts to express their appreciation for loved ones.
“During times of crisis, consumers become more considerate about their spending,” she said. “Where fast fashion has been such a ‘go-to’ for ‘treat yourself’ spending, the longevity of such pieces weighs on spenders today. Therefore, instead of spending in volume at lower cost with fast fashion, people are looking to timelessness, rarity and longevity.”
“Jewellery has long been an heirloom fashion item, as such a once-off purchase in a special item outlives the wearer and provides opportunity for the next generation to continue the precious story,” she added.
Fairfax & Roberts managing director Irene Deutsch said the company saw a rise in wedding and engagement rings during the past year.
“I think a lot of people saw this past year as difficult and so they decided to propose as a way of showing their appreciation for each other and to do something that made them happy in a time of uncertainty,” Deutsch said. “And it was really lovely to be a part of that – for a moment in time to forget all that was wrong with the world and just focus on love and happiness.”
Diamonds for everyone
Meanwhile, fine jewellery has also become more affordable and accessible in some areas of the sector.
Jewellery retail giant Pandora last week joined the lab-grown diamonds market with the launch of its Pandora Brilliance collection in the UK. The company will launch the collection globally next year.
The Pandora Brilliance collection includes rings, bangles, necklaces and earrings, each featuring a solitary lab-created diamond hand-set within sterling silver, solid 14K yellow gold or solid 14K white gold.
Mined-diamond giant De Beers launched its lab-grown diamond collection Lightbox in 2018, which include earrings, pendants, rings and bracelets. Other brands such as Helzberg Diamonds and Signet also have similar offerings.
“The retail price of a lab-created diamond is about a third of a mined diamond,” Lejla Charif, Pandora’s corporate press manager for Corporate Communications and Sustainability, told Inside Retail.
“A lab-created diamond has exactly the same optical, chemical, thermal and physical characteristics as a mined diamond but rather than being drawn from the earth, it has been created in a laboratory prior to it being cut and polished by skilled craftspeople, sold at a lesser price.”
Hurwitz said the roadblock to the success of the lab-grown diamonds category has never been the consumer, it has been the fine jewellery industry.
“Very tradition-bound, jewellers have been unsure of which direction to go,” he said. “But with the bigger jewellery players stepping in, and investing money and buying inventory, the rest of the industry will likely fall in line and see the enormous opportunity that exists for a product category that is still very much in its infancy.”
In the recent MVEye Consumer and Trade Research report 2021, 62 per cent of retailers revealed that between 5 per cent and 50 per cent of their customers have specifically requested lab-grown diamonds.
The study also found that 95 per cent of respondents reported better margins with lab-grown diamonds compared to their mined diamond business, with 78 per cent of retailers reporting margins from 16 per cent to 40 per cent and higher.
“Demography is showing us the path to the new consumer, defined by three massive spending segments: multicultural consumers, self-purchasing females, and next-generation bridal consumers,” Hurwitz said.
Jewellery stores and the phygital world
With government lockdown restrictions and new hygiene protocols announced, retailers have resorted to improving their digital presence and applying new technology to reach consumers. This includes the fine jewellery sector.
For example, Cartier experimented with different technologies such as augmented reality, to improve the customers’ online experience.
“We’re using lots of different visualisation techniques,” said Thomas David, director for international digital operations at Cartier. “Those can’t replace our physical stores but this is about building confidence and making our clients see that what they see is what they’re ultimately going to get.”
David said Cartier is also looking at visualisation tools like allowing people to check rings and get their ring size on their site.
“Trying to do a ring sizer online is very, very difficult because you’re talking about millimetres on a finger which is three dimensional and the technologies that we’re seeing are just not quite there yet, or at least not the accuracy that we demand at Cartier,” he said. “But we’re focused very much on digital innovation and trying to find these solutions, to make it exciting, engaging and instill confidence in our clients.”
To build trust with customers, jewellery retailers also had to up the ante on their social media platforms by sharing more stories about themselves and creating deeper connections with followers.
The De Beers Diamond Insight 2020 report stated that while the audience of the digital platform will determine where content should be shared, educational content serves the purpose of entertaining while immersing shoppers into the details behind brands.
“The jewellery industry must embrace the new consumer and employ them, create for them, market to them, and provide innovative experiences. He or she who wins the new jewellery consumer wins the race,” Hurwitz said.