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Jewellery & Watches Retailing: Inc Impact of COVID-19 - UK - November 2020

OVERVIEW
Key issues covered in this Report
COVID-19: Market context
Economic and other assumptions
Products covered in this Report
EXECUTIVE SUMMARY
Impact of COVID-19 on jewellery and watches
Figure 1: Short, medium and long-term impact of COVID-19 on jewellery and watches, November 2020
The market
COVID-19 causes market to drop 18% in 2020
Figure 2: Market size for jewellery and watches, by value, 2015-25 (prepared on 2 November 2020)
UK footfall dives as stores shutter
Figure 3: Year-on-year percentage footfall change, by location, Jan 2015-Sep 2020
Lack of tourism threatens the luxury sector
Figure 4: Country or region of origin of non-UK-resident purchasers of high-end products, 2019
Price of gold on the rise
Figure 5: UK price of gold tracked over a 15-year period, per troy ounce in GBP, 2005-20
Swiss watch exports face big declines in 2020
Figure 6: Value of Swiss watch exports, by top five markets, Jan-Sep 2018-20
Companies and brands
Pandora’s relaunch has promising start
Advertising spend continues to decline in 2019
Figure 7: Total above-the-line, online display and direct mail advertising expenditure on jewellery and watches, 2015-19
Pandora and Tiffany & Co. benefit from high levels of awareness
Figure 8: Attitudes towards and usage of selected brands, July 2020
The consumer
People are spending less on fashion items
Figure 9: Consumer spending expectations due to COVID-19, 2-11 November 2020
More people are shopping online
Figure 10: People shopping more online since COVID-19, 16 April-11 November 2020
Watches and costume jewellery continue to be the most popular options
Figure 11: Who jewellery/watches were bought for in the last five years, June 2020
Most buy precious metal jewellery from specialist stores
Figure 12: Types of retailers used for buying jewellery and watches, June 2020
Quality and price stand out as the main priorities
Figure 13: Factors prioritised when choosing where to buy jewellery and watches, June 2020
Nearly two thirds turn to repairs
Figure 14: Shopping behaviours around jewellery and watches, June 2020
Charity has become important to shoppers
Figure 15: Behaviours towards jewellery and watch purchasing, June 2020
Innovations in the sector are needed to encourage online purchasing
Figure 16: Enticing shoppers to buy jewellery or watches online during COVID-19, June 2020
ISSUES AND INSIGHTS
Now is the time for the sector to embrace digital and online channels
Figure 17: Banks Lyon’s ‘Ask at Home’ campaign and home proposal ideas for customers, 2020
The opportunity in gifting throughout the pandemic
THE MARKET – KEY TAKEAWAYS
Fine jewellery and watches severely impacted by COVID-19
Sales of watches become increasingly polarised
Lack of tourism is a big threat to the sector
Price of gold on the rise
MARKET SIZE AND FORECAST
Fine jewellery and watches hit by lack of tourism due to COVID-19
Figure 18: Short, medium and long-term impact of COVID-19 on jewellery and watches, September 2020
COVID-19 causes market to drop 18% in 2020
Initial outbreak caused decline in sales
Figure 19: Market size for jewellery and watches, by value, 2015-25 (prepared on 2 November 2020)
Figure 20: Consumer spending on jewellery and watches, at current prices, 2015-25
Sector benefited from gifting and lack of seasonality
Online retailing will continue to be problematic
Eventual recovery
Market drivers and assumptions
Learnings from the last recession
Figure 21: Value sales of jewellery and watches, 2007-12
Forecast methodology
MARKET SEGMENTATION
Sales of watches struggle due to economic uncertainty
Figure 22: Market size for watches, by value, 2015-25 (prepared on 2 November 2020)
Figure 23: Consumer spending on watches, at current prices, 2015-25
Demi-fine jewellery bright spot in the sector
Figure 24: Market size for jewellery, by value, 2015-25 (prepared on 2 November 2020)
Figure 25: Consumer spending on jewellery, at current prices, 2015-25
Fine jewellery loses share as demand slows
Figure 26: Estimated share of total UK jewellery and watch market, 2017-20
Figure 27: UK retail value sales of jewellery and watches, by sector, 2015-20
MARKET DRIVERS – RETAIL AND THE ECONOMY
The UK has plunged into the deepest recession since records began
Figure 28: Quarter-on-quarter change in private consumption, seasonally adjusted, Q1 2007-Q3 2020
Earnings have decreased
Figure 29: Real wage growth – Average weekly earnings vs. inflation, Jan 2015-June 2020
UK footfall dives as stores shutter
Figure 30: Year-on-year percentage footfall change, by location, Jan 2015-Sep 2020
Lack of tourism threatens the luxury sector…
Figure 31: Country or region of origin of non-UK-resident purchasers of high-end products, 2019
…with end of UK tax-free scheme threatening the industry further
Move towards online retail continues
Figure 32: Internet sales as a percentage of total retail sales, 2007-19
MARKET DRIVERS – JEWELLERY
Jewellery purchasing remains more stable than other categories
Figure 33: Trends in items people have purchased for themselves, percentage point change, October 2019-September 2020
Total hallmarking declined in 2019
Figure 34: Number of items hallmarked across UK Assay Offices, by type of precious metal, 2017-19
Figure 35: Number of items hallmarked across UK Assay Offices, by weight, year-to-date Oct 2019/Oct 2020
Price of gold on the rise
Figure 36: UK price of gold tracked over a 15-year period, per troy ounce in GBP, 2005-20
Marriage declining for same- and opposite-sex couples
Figure 37: Number of marriages in Great Britain, 2006-17
MARKET DRIVERS – WATCHES
Swiss watch exports grew in 2019…
Figure 38: Value of Swiss watch exports, by top five markets, 2017-19
…driven by pricier options
Figure 39: Export of wristwatches, by price range, year-on-year change, 2018-19
The industry faces big declines in 2020
Figure 40: Value of Swiss watch exports, by top five markets, Jan-Sep 2018-20
Smartwatches continue to destabilise the sector
Figure 41: Estimated unit sales of wrist-worn wearable devices, by product category, 2016-19
COMPANIES AND BRANDS – KEY TAKEAWAYS
Pandora’s relaunch has promising start
Men’s jewellery continues to be a source of innovation
Blockchain technology used in luxury watch sector
Clogau uses TV advertising to boost brand presence
LEADING SPECIALIST RETAILERS
Sales performance
Richemont sales decline
Figure 42: Leading specialists’ revenues, 2014-19
Pandora relaunch sees early success
Watches of Switzerland already seeing effects of COVID-19
Outlet numbers
Links of London disappears from the high street
Figure 43: Leading specialists’ outlet numbers, 2014-19
Thomas Sabo closes stores
Clogau to open five new stores
TAG Heuer opens new boutiques
Sales per outlet
Figure 44: Leading specialists’ sales per outlet, 2018
Figure 45: Leading specialists’ sales per outlet, 2014-19
LAUNCH ACTIVITY AND INNOVATION – JEWELLERY
Harrods revamps jewellery offering
New jewellery space
Opening of Tiffany & Co.’s Blue Box Cafe
Figure 46: Inside Tiffany’s Blue Box Cafe in Harrods, 2020
Suzanne Kalan opens dedicated boutique within Harrods
House of Luxury opens pop-up in Harrods
Jewellers show support for Black designers
Kassandra Lauren Gordon raises funds for Black jewellers
Boma Jewelry provides mentorship programme for Black jewellery designers
Astrid & Miyu launches mentorship for Black-owned businesses
Lab-grown trend grows stronger
GIA introduces new lab-grown diamond report
Nivoda unveils lab-grown diamonds search option
Kimaï releases engagement rings featuring lab-grown diamonds
Figure 47: The Billie engagement ring with a large oval cut lab-grown diamond, 2020
Retailers launch online
Figure 48: De Beers new transactional website
Pop-up space for jewellery brands
YAA YAA London pops up in John Lewis
Tiffany & Co. Covent Garden pop-up with ice rink
Figure 49: Tiffany & Co. ice rink in Covent Garden, 2019
Daniella Draper opens stores in Leeds and Cheshire
Collaborations
Pandora unveils Star Wars collaboration
Figure 50: Pandora’s Star Wars Logo Snake Chain Bracelet, 2020
Messika collaborates with Kate Moss on new collection
Figure 51: Behind the scenes of the Messika collection created by Kate Moss, 2020
Lark & Berry searches for designer to collaborate with
Brands turn to tech
Astrid & Miyu launches podcast in support of start-ups
Brown & Newirth launches virtual concierge service
Men’s jewellery launches
Biiju’s Camouflage Collection
Figure 52: Biiju’s first men’s collection, 2020
Aurum branches into men’s jewellery
EC One launches men’s engagement rings
LAUNCH ACTIVITY AND INNOVATION – WATCHES
New watch launches
Timex unveils affordable automatic
Omega launches anniversary watch
Figure 53: Omega’s new watch commemorating the brand’s ‘Silver Snoopy Award’, 2020
Cartier reintroduces iconic watch
Figure 54: Maisie Williams modelling the re-released Pasha de Cartier, 2020
Pre-owned specialists increase store footprint
Try Before You Buy
Figure 55: Danish watch brand Nordgreen launches its Try Before You Buy scheme in the UK, 2020
Breitling turns to blockchain technology
Sustainable lines
Vivienne Westwood watches keep up with eco-friendly image
Swatch releases collection of eco-friendly watches
Figure 56: The new BioReloaded eco-watch by Swatch, 2020
ADVERTISING AND MARKETING ACTIVITY
Advertising spend continues to decline in 2019
Figure 57: Total above-the-line, online display and direct mail advertising expenditure on jewellery and watches, 2015-19
Pandora ups advertising as part of rebranding
Figure 58: Millie Bobby Brown featuring in the latest ‘Pandora Me’ campaign, 2020
Figure 59: Total above-the-line, online display and direct mail advertising expenditure on jewellery and watches, by advertiser, 2015-19
Chanel releases ‘Over the Moon’ fine jewellery campaign
Traditional brands continue to rely on press advertising
Patek Philippe refreshes classic campaign
Figure 60: Total above-the-line, online display and direct mail advertising expenditure on jewellery and watches, by media type, 2019
Swarovski launches social media campaign
Clogau releases TV advert during peak lockdown period
Figure 61: Clogau’s ‘The Gift of Love’ advertising campaign, 2020
Figure 62: Top advertisers’ above-the-line, online display and direct mail advertising expenditure on jewellery and watches, by media type, 2019
Nielsen Ad Intel coverage
BRAND RESEARCH
Brand map
Figure 63: Attitudes towards and usage of selected brands, July 2020
Key brand metrics
Figure 64: Key metrics for selected brands, July 2020
Brand attitudes: Monica Vinader seen as innovative
Figure 65: Attitudes, by brand, July 2020
Brand personality: Tiffany & Co. recognised as exclusive
Figure 66: Brand personality – macro image, July 2020
Consumers perceive Pandora to be stylish
Figure 67: Brand personality – micro image, July 2020
Brand analysis
Astrid & Miyu still has relatively low awareness
Pandora has high levels of commitment and awareness amongst consumers
Tiffany & Co. seen as expensive but aspirational
Watches of Switzerland perceived as cutting edge
Fraser Hart offers good value
Monica Vinader seen as most ethical and responsive
Beaverbrooks needs to boost usage amongst female consumers
H. Samuel needs to innovate to excite consumers
THE CONSUMER – KEY TAKEAWAYS
People are likely to trade down since COVID-19
Online presents a big opportunity for the sector
Male shoppers are more easily influenced by famous personalities
Young shoppers want to see innovations
IMPACT OF COVID-19 ON CONSUMER BEHAVIOURS
People are anxious about the impact COVID will have on the economy
Figure 68: Thoughts around the effect COVID-19 will have on the economy, 18-24 June 2020
People are spending less on fashion items…
Figure 69: Consumer spending expectations due to COVID-19, 2-11 November 2020
…with customers likely trading down
Figure 70: Consumer spending expectations on clothing and accessories due to COVID-19, by socio-economic group, 2-11 November 2020
More people are shopping online...
Figure 71: People shopping more online since COVID-19, 16 April-11 November 2020
…as some are reluctant to try on or handle products in-store
Figure 72: How consumers feel about doing certain activities during COVID-19 times, 24 September-1 October 2020
People keen to support local businesses
Figure 73: People saying they are shopping more from local businesses since the COVID-19 outbreak, by area, 2-11 November 2020
PURCHASING OF JEWELLERY AND WATCHES
Watches and costume jewellery continue to be the most popular options 
Figure 74: Who jewellery/watches were bought for in the last five years, June 2020
Three in five bought either jewellery or watches
Figure 75: Total purchasing of jewellery and watches, June 2020
Young men are the most likely gift buyers
Figure 76: Purchasing of jewellery and watches for self or as a gift, by age and gender, June 2020
CHANNELS AND RETAILERS USED
Watches more likely to be bought online than jewellery
Figure 77: Channels used for buying jewellery and watches, June 2020
Overall, shopping for watches or jewellery in-store is more common
Figure 78: Channels used for buying jewellery and watches, June 2020
Most buy precious metal jewellery from specialist stores
Figure 79: Types of retailers used for buying jewellery and watches, June 2020
PURCHASE DRIVERS 
Quality and price stand out as the main priorities
Figure 80: Factors prioritised when choosing where to buy jewellery and watches, June 2020
Ethical and eco-friendly items are not a priority
HABITS OF JEWELLERY AND WATCH SHOPPERS
Nearly two thirds turn to repairs
Figure 81: Shopping behaviours around jewellery and watches, June 2020
Young shoppers want to buy jewellery and watches via social media
Figure 82: Shopper behaviour towards buying jewellery and watches via social media, by generation, June 2020
JEWELLERY AND WATCH BUYING BEHAVIOURS
Charity has become important to shoppers
Figure 83: Behaviours towards jewellery and watch purchasing, June 2020
Men are more likely to be swayed by influencers…
…and to make fraudulent returns
Figure 84: Shoppers admitting to wearing jewellery/watches before returning the items, by age and gender, June 2020
ATTITUDES TOWARDS JEWELLERY AND WATCHES
People are split regarding the importance of big brands
Figure 85: Attitudes towards jewellery and watch purchasing, June 2020
Young women turn to curated piercings for unique style
Figure 86: People agreeing with the statement ‘Getting extra ear piercings is a good way to create a unique look’, by age and gender, June 2020
ENCOURAGING SHOPPING DURING COVID-19
Innovations in the sector are needed to encourage online purchasing…
Figure 87: Enticing shoppers to buy jewellery or watches online during COVID-19, June 2020
…particularly when appealing to young shoppers
Figure 88: Enticing shoppers to buy jewellery or watches online during COVID-19, by age, June 2020
Figure 89: Pandora’s new virtual try-on experience launched for safer shopping during COVID-19, 2020
Hygiene is main concern when visiting stores
Figure 90: Enticing shoppers to buy jewellery or watches in-store during COVID-19, June 2020
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology

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