2020, it has to be said, will go down in business history as the year no one could have predicted. And I’d hazard a guess that one thing every luxury jewellery CEO is mulling right now is how to create a seamless omnichannel luxury experience for high net worth customers.
While luxury sales declined by 85% over February and March in China, by 95% in Italy, Spain and France, with sales of jewellery and other luxury items nosediving 79% in February in Hong Kong, luxury jewellers are increasingly turning their attention to new ways of meeting people’s wants and needs.
During a July webinar hosted by Bloomberg News focusing on the luxury retail market, Paris-based luxury retail reporter Angelina Rascouet confirmed that sales of the Richemont Group (which owns Cartier and Van Cleef & Arpels) were down 37%. Meanwhile, Louis Vuitton reported that sales were down a disappointing 38%. Neither figure strays too far from Bain’s prediction around April that the luxury market would need to brace itself for a sharp fall southward of around 35%.
Times Present for Jewellery
Most industry insiders agree there will be a positive rebound once all this is over, but against the current backdrop, jewellery businesses have their back up against a wall. They need to adapt the way they produce, communicate and sell. If they don’t, they won’t survive. In late July, a stalwart of London’s Mayfair, William & Son, which sells jewellery and other collectibles and is owned by William Asprey (seventh generation of the Asprey dynasty), announced it was filing for bankruptcy.
While it might be reasonable to think that the global nature and shock of Covid-19 might have brought only doom and gloom to discretionary spending, there have also been some pleasant surprises in recent months.
For example, when Hermès reopened its Guangzhou-based store in China in mid-April, it earned a record-breaking $2.7 million worth of sales in a single day. Evidently Birkin bags have retained their reputation as sound investment pieces. The Financial Times reported that while fans of luxury in China are no longer able to buy goods abroad due to travel restrictions, they are choosing to shop in the mainland, resulting in a 49% boost to sales for the Richemont group in China.
American celebrity favourite Le Vian, a family-owned luxury jewelry company, broke their own record for the most expensive item to be sold online – a necklace costing $60,000. During March and April, when the doors to thousands of brick and mortar stores remained firmly shut, digital fashion site Moda Operandi recorded a 35% rise in jewellery sales. Meanwhile, the record-breaking sale of a Cartier Tutti Frutti bracelet by Sotheby’s for more than £1.3 million, the most expensive jewel ever sold in an online auction, proved to be a welcome surprise for an industry in transition – as well as for one very lucky lady. Following this, Christie’s broke this record in early July, when a 28.86 carat diamond was snapped up online for over $2.1 million.
Times Ahead for Jewellery
While much of the jewellery industry has been relatively slow to adopt retail technologies, the combined pressures of COVID-19 and the rising numbers of younger Gen Z and Gen Y wealthy who by 2025 are estimated to account for 45% of global luxury purchases, have forced jewellery brands to rethink. Online purchases, including via website browsing or virtual private appointments, are now pivotal to luxury jewellery brands.
Auction houses selling jewellery have been successfully adapting the way they work, by offering condition reports via video call, or even through Instagram Stories, and some are offering free contactless delivery. Sotheby’s hosted four online jewellery sales in March, totalling $6.1million, and the London Fine Jewels online sale achieved $3.7 million, breaking a record for a digital jewellery auction. The fact that 30% of bidders were under the age of 40 demonstrates how Millennials and Gen Z are interested in vintage and antique jewellery, and how they are responding well to digital auctions.
“Fine jewellery stores need more than a sleek website and an attractive social media presence,” Sonia Esther Soltani, editor of diamond magazine Rapaport, told global behavioural research agency Canvas8 recently “They need to be able to offer consumers a virtual experience that is as close as possible to the real thing – amazing images, AI, a personal concierge.”
Companies that committed early to retail technology have been better positioned to respond at speed during the pandemic to accelerate digitalisation. Galeries Lafayette is offering a live-streamed personal shopping service, while Swiss watchmaker Hublot launched its $27,000 Big Bang MECA -10 black Magic model via WeChat.
American jewellery powerhouse Le Vian introduced Le Vian TV in early 2020 and by April was garnering a 1.5 million reach on some primetime shows. In 2015, Le Vian developed their proprietary Style Bar to show customers their entire range via tablets, while showcasing thousands of one-off Le Vian pieces, usually only available at 4,000 trunk shows annually. In 2019, Le Vian added eight foot tall iPhone-style Le Vian Totems into 250 stores, allowing customers to reserve and buy pieces on the spot. In recent months, they have worked closely with all their retailers to enable comprehensive, remote interaction with all customers. Now, they are transporting this technology to 180 of Signet’s Ernest Jones and H Samuel stores in the UK.
Wealthy buyers are now focused on online purchases and luxury leaders are responding. “In the past 18 months to two years, there’s been a real investment in online selling of luxury fine jewellery,” according to Rachael Taylor, founder of The Jewellery Cut, a glamorous bi-annual, London-based jewellery buying event. “Net-a-Porter has created a specific invite-only fine jewellery section on its website where you can’t see anything unless you’re invited as a very special client. Farfetch has invested in its fine watches and jewellery section as well,” she says.
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And for those jewellers who may a need a little extra encouragement, according De Beers CEO Bruce Cleaver speaking in a late July webinar in conjunction with the charity Diamonds Do Good, while consumers may be buying less in the coming months, they will attach more value to what they buy, which suggests the average price spent could be on the rise.
Claire Adler is the founder of Claire Adler Luxury PR and a former luxury journalist for publications including the Financial Times. Claire Adler Luxury PR helps clients build their online reputation and enhance their reach through a mix of press coverage, beautiful communications and strategic introductions. Clients range from established luxury houses to UHNW individuals including Jaeger-LeCoultre, De Beers Group, Le Vian, Vanessa Pederzani and 77 Diamonds.
