Almost three in five (58%) people now want to see jewellery and watch retailers give back to communities by donating proceeds to charity. This is something evident in this sector over the last year, with countless brands and retailers raising money for the NHS, Age UK and contributing to the BLM movement.

COVID-19 is likely to have a long-lasting effect on the market. Online shopping has increased throughout 2020, even when non-essential retailers opened their doors, and we would expect this to continue even when a vaccine becomes available. The watches and jewellery industry, which has generally been slow to enter the ecommerce space, will have to innovate and learn to engage with customers online via transactional sites and a social media presence.

The sector has suffered this year, due both to people being worried about their finances and also the distinct lack of tourism, which usually brings in lucrative sales. Many people say they intend to spend less on fashion purchases and even those more comfortable financially are indicating they will trade down.

However, there are certainly opportunities to be had. Jewellery and watch brands and retailers should be taking advantage of the fact that people have not been able to buy experiential gifts for family and friends on special occasions. This category is already more reliant on gifting than others and it should be highlighted how jewellery and watches make good sentimental gifts for loved ones during these tough times.

Key issues covered in this Report

  • The impact of COVID-19 on the jewellery and watch market.

  • How consumers’ behaviours and attitudes have changed since COVID-19.

  • Consumers’ habits towards jewellery and watches.

  • Consumers’ behaviours and attitudes towards jewellery and watch purchasing.

COVID-19: Market context

This update on the impact that COVID-19 is having on the market was prepared on 17 November.

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. As the case level rose, the government ordered the closure of non-essential stores on 20 March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March. It wasn't until 15 June that non-essential stores were allowed to reopen, followed by pubs, restaurants, hotels and hairdressers on 4 July, and many beauty businesses on 13 July.

By September, it had become clear that the UK was at the start of a second wave, and social distancing measures were intensified. Continued increases in infection numbers led to Wales implementing a two-week national lockdown from 19 October, England announcing a full month-long lockdown from 5 November, and Scotland introduced a new five-level system of coronavirus restrictions.

After the national lockdown ends on 2 December, the current plan is to return to the regional tiered approach that was in force before the lockdown, meaning that large parts of the country may still effectively be locked down.

Economic and other assumptions

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its November 2020 Economic and Fiscal Outlook Report. The scenario suggests that UK GDP could fall by 11.3% in 2020, recovering by 5.5% in 2021, and that unemployment will reach 4.4% by the end of 2020, rising to 6.8% by the end of 2021.

The current uncertainty means that there is wide variation on the range of forecasts, however, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q1 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

The Welsh and English lockdowns will inevitably have an impact on GDP and consumer finances, potentially shifting the UK closer to the OBR’s downside scenario. The market forecasts in this Report reflect this new reality.

From the start of the outbreak, we have made the assumption that an effective vaccine would not be widely available until well into 2021. On 9 November, Pfizer and BioNTech announced highly encouraging results from trials of their vaccine, followed by similarly positive results from Modern and AstraZeneca’s vaccine developed by the University of Oxford. This means that a vaccination programme may be brought forward, but a full rollout will take many months, meaning that Mintel is still making the assumption that we will be living with COVID for some time to come.

Products covered in this Report

This Report examines the UK jewellery and watches retailing market for men and women aged 16 and over. The Report covers:

  • Precious metal jewellery, ie jewellery made with precious metals such as gold, silver, platinum, palladium and titanium.

  • Costume jewellery, ie jewellery made from non-precious metals.

  • Watches, including mechanical watches, quartz movement watches and a third type that combines a quartz movement with micro-mechanics for additional features.

Note that the market size does not include smartwatches; more information on this market is included in Mintel’s Wearable Technology – UK, November 2019 Report.

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