Jewellery and Watches Retailing - UK - July 2007

ISSUES IN THE MARKET
Definitions
Abbreviations
INSIGHTS AND OPPORTUNITIES
MARKET IN BRIEF
Challenging market
Declining share of retail sales overall
Figure 1: Jewellery spending as % all retail sales, 1998-2006
Figure 2: Clothing spending as % all retail sales, 1998-2006
Product sectors fare differently
Figure 3: Consumer spending on jewellery and watches by product sector, 2002-07
Figure 4: Share of jewellery and watches market, by product sector, 2006
 INFLUENCING FACTORS – EXTERNAL
Saving more and spending less
Positive employment and demographic trends
Figure 5: Population % changes, 2002-12
The demise of analogue and the take-up of broadband
 INFLUENCING FACTORS – INTERNAL
Price sensitivity
Emotional and ethical issues
Seasonality and fashion
Where they buy
Growing appeal of non-specialists
Industry innovations
 CONSUMER TYPES AND ATTITUDES
The male opportunity
The fashionable 40s opportunity
The future – winning strategies
FAST FORWARD TRENDS
Trend 1: Play Ethic
Definition:
Trend 2: Modern Life Is Rubbish
Definition:
Trend 3: Help, I Need Somebody
Definition:
Trend 4: Experience Is All
Definition:
INDUSTRY INSIGHT
Key points
A tough market
Market overview
Market sales growth by product category
Store design trends
Winners and losers in the market
New competition
Home shopping channels
The Internet and transactional websites
Product offers – brands and own-brands
Price movements and consumer sensitivity
Product offers – what’s been selling best
The impact of fashion trends
Diamond simulants – potential growth?
The influence of celebrities
Gifting and self-purchase
Advertising and marketing
The future
Key influences, challenges and opportunities
Winning strategies for the future
INTERNAL MARKET ENVIRONMENT
Key points
Marriages
Figure 6: Number of marriages, 2002-12
The price
Figure 7: Gold prices, 2004-06
Figure 8: Metal price comparisons, August 2006
Seasonality and fashion
Fashion trends
Men’s interest in jewellery and watches
Celebrities
Emotional and ethical issues
BROADER MARKET ENVIRONMENT
Key points:
Personal disposable income and consumer expenditure
Figure 9: PDI and consumer expenditure, at current and constant 2002 prices, 2002-12
Figure 10: PDI and consumer expenditure, 2002-07
Inflation and interest rates
Figure 11: UK inflation rates, all goods UK, 2002-12
Savings
Figure 12: Savings ratio, 2002-12
Employment
Figure 13: UK workforce and employment, 2002-12
Population
Figure 14: Population numbers, by age group, 2002-12
Socio-economic changes
Figure 15: Population numbers and percentage, breakdown, by socio-economic group, 2002-12
MARKET IN CONTEXT
Key points
Handbags
Figure 16: UK retail sales of handbags, at current and constant 2002 prices, 2002-07
Portable technology
Figure 17: UK retail sales of portable technology, at current and constant 2002 prices, 2002-06
Jewellery and watches
Figure 18: UK retail sales of jewellery and watches, at current and constant 2002 prices, 2002-07
STRENGTHS AND WEAKNESSES IN THE MARKET
Strengths
Weaknesses
WHO’S INNOVATING?
Product offer – precious jewellery
Product offers – costume/fashion jewellery
The importance of websites
Celebrities
New store design
Brand name and personality
Integrating TV with the Internet
MARKET SIZE AND FORECAST
Key points
Total market for jewellery and watches
Figure 19: Consumer spending on jewellery and watches, at current and constant prices, 2002-07
Market by product sector
Figure 20: Consumer spending on jewellery and watches, by product sector, excluding VAT, 2002-06
Costume jewellery
Precious jewellery
Watches
THE CONSUMER – WHO BUYS AND WHERE DO THEY BUY?
Key points
Where do they buy?
Figure 21: Where consumers buy jewellery and watches, 2003-07
Where they buy, by demographics
The young are prime purchasers
Broad appeal of supermarkets
Figure 22: Who buys jewellery and watches from which retailers, by gender, age and socio-economic group, April 2007
Older affluent consumers like M&S
Internet opportunity and growth
Figure 23: Who buys jewellery and watches from which retailers, by gender, age and socio-economic group, April 2007
Affluent consumers want something different
Figure 24: Who buys jewellery and watches from which retailers, by gender, age and socio-economic group, April 2007
Figure 25: Retailers used for buying jewellery and watches, by affluence and age, April 2007
Retailers and affluence
How loyal are jewellery and watch shoppers?
Figure 26: Outlets used for buying jewellery and watches in the last 12 months, by number of stores shopped, April 2007
Figure 27: Outlets used for buying jewellery and watches in the last 12 months, by number of stores shopped, April 2007
Low purchase rate
Argos and specialists attract loyalty
Shopping around, but not just for costume jewellery and watches
Consumer types and loyalty
Figure 28: Consumer types by number of shops used, April 2007
WHO BUYS AND WHERE DO THEY BUY – DETAILED CONSUMER DEMOGRAPHICS
Figure 29: Who buys jewellery and watches from which retailers, by lifestage, Special Groups, working status, region, ACORN categories, technology users, commercial TV viewing and supermarket used, April 2007
Figure 30: Who buys jewellery and watches from which retailers, by lifestage, Special Groups, working status, region, ACORN categories, technology users, commercial TV viewing and supermarket used, April 2007
Figure 31: Who buys jewellery and watches from which retailers, by Special Groups, region, ACORN categories, technology users, commercial TV viewing and supermarket used, April 2007
THE CONSUMER – BUYING JEWELLERY AND WATCHES
Key consumer findings
Jewellery – what they buy
Figure 32: Attitudes to shopping for watches and jewellery, April 2007
Expensive items are more for gifts
Figure 33: Attitudes to shopping for watches and jewellery, by gender, age and socio-economic group, April 2007
Few buy frequently
Buying across both costume and precious
The male opportunity
Figure 34: Attitudes to shopping for watches and jewellery, by gender, age and socio-economic group, April 2007
 IDENTIFYING TARGETS
Unconcerned
Cost Conservative
Impulsive Jewellers
Bling Bling
 CONSUMER TYPES – WHERE THEY SHOP
Retailer opportunities
Figure 35: Where they shop for jewellery and watches, by consumer types, April 2007
Why they buy jewellery – style and price
Costume jewellery is impulsive
Looking for style over price
Keeping up with fashion
Figure 36: Attitudes to shopping for watches and jewellery, by gender, age and socio-economic group, April 2007
Figure 37: Attitudes to shopping for watches and jewellery, April 2007
Attitudes to watches
Figure 38: Attitudes to shopping for watches, April 2007
Most buy just for replacement
Young men like designer styles, and will splash out
Women more likely to feel guilty
Figure 39: Attitudes to shopping for watches and jewellery, by gender, age and socio-economic group, April 2007
BUYING JEWELLERY AND WATCHES – DETAILED CONSUMER DEMOGRAPHICS
Figure 40: Shopper typologies by gender, age, socio-economic group, marital status, ACORN categories, daily TV viewing, region, newspaper readership and supermarket used, April 2007
Figure 41: Shopper typologies by attitudes to jewellery and watches shopping, April 2007
Consumer attitudes to retailers
Figure 42: Why they buy jewellery, by region, ACORN categories, commercial TV viewing and supermarket used, April 2007
THE CONSUMER – ATTITUDES TOWARDS BUYING WATCHES
Key consumer findings:
 WHAT SHOPPERS THINK OF JEWELLERY AND WATCHES, BY DEMOGRAPHICS
Attitudes to retailers
A question of trust in specialists …
… with the focus on service
But little resistance to buying online
Supermarkets a hit in the fashion stakes
Consumers want something different?
Comparing prices is about getting good value…
… and can be done in ‘physical’ shops or online
ATTITUDES TOWARDS BUYING WATCHES – DETAILED CONSUMER DEMOGRAPHICS
Figure 43: Attitudes to buying watches, by region, ACORN categories, commercial TV viewing and supermarket used, April 2007
Figure 44: Attitudes to shopping for watches and jewellery, by region, ACORN categories, media used, commercial TV viewing and supermarket used, April 2007
Figure 45: Attitudes to shopping, by region, ACORN categories, commercial TV viewing and supermarket used, April 2007
RETAIL ADVERTISING AND PROMOTION
Figure 46: Main media advertising by jewellery retailers, 2002/03-2006/07
RETAIL COMPETITOR ANALYSIS
Key points
Retailer performance
Figure 47: Main retailers’ sales and profit performances, 2004-06
Figure 48: Breakdown of market share of major retailers, 2001-06
Overview of key strategies of retailers
Retailer winners and losers
Figure 49: Summary of UK outlet numbers of jewellery retailers, 2001-07
RETAILER PROFILES
 SPECIALIST JEWELLERS
Signet Group (UK)
H.Samuel
Ernest Jones
Figure 50: Signet (UK), number of stores and productivity, 2001-07
Figure 51: Signet (UK), stores data, by fascia, 2001-07
H.Samuel
Figure 52: H.Samuel, merchandise sales mix, 2002-07
Ernest Jones
Figure 53: Ernest Jones, merchandise sales mix, 2002-07
Figure 54: Signet Group (UK), financial performance, 2002-07
The Goldsmiths Group
Figure 55: Goldsmiths, number of stores and productivity, 2001-07
Figure 56: Goldsmiths Ltd, financial performance, 2001-06
Figure 57: MW Group Ltd, financial performance, 2001-06
F Hinds
Figure 58: F Hinds, financial performance and number of stores, 2001-06
Beaverbrooks the Jewellers
Figure 59: Beaverbrooks the Jewellers Ltd, financial performance and number of stores, 2001-07
Fraser Hart
Figure 60: Fraser Hart Ltd, financial performance and number of stores, 2001-06
HPJ Jewellers
Figure 61: HPJ UK Ltd, financial performance and number of stores, 2001-05
Warren James
Figure 62: Warren James Ltd, financial performance and number of stores, 2001-06
Links of London
Figure 63: Links of London, financial performance, 2002-06
Boodles (Boodle & Dunthorne Ltd)
Figure 64: Boodle & Dunthorne Ltd, financial performance and number of stores, 2002-06
Theo Fennell plc
Figure 65: Theo Fennell Ltd, financial performance and number of stores, 2002-07
 OTHER JEWELLERY SPECIALISTS
Asprey/Garrard
Smaller fine jewellery specialists
Diamond simulant retailers
 CARAT*
Secrets shhh
Fashion/costume jewellery specialists
Others
 NON-SPECIALISTS
Argos
Figure 66: Argos, financial performance and number of stores, 2002-07
 SUPERMARKETS
George at ASDA
Tesco
 SAINSBURY’S
 DEPARTMENT AND VARIETY STORES
Bhs
Debenhams
House of Fraser
John Lewis
Marks & Spencer
Other department stores
 FASHION ACCESSORIES RETAILERS
Claire’s Accessories
Figure 67: Claire’s Accessories UK Ltd, financial performance, 2001-06
Accessorize
 CLOTHING CHAINS
Next
New Look
Arcadia
Mosaic Fashion Group
River Island
H&M
 HOME SHOPPING
Avon
Virgin Vie At Home
QVC
Figure 68: QVC UK, financial performance, 2001-06
Gems TV
The Jewellery Channel
 INTERNET RETAILERS
Asos.com
Bluenile
cooldiamonds.com
diamondgeezer.com
Geraldonline