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Jewellery & Watches Retailing - UK - September 2017

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Market set to reach £5.5 billion in 2017
Figure 1: Best- and worst-case forecast value sales of jewellery and watches, 2012-22
Watches outperform jewellery
Figure 2: Estimated share of total UK jewellery and watch market, 2016
Hallmarking in the UK declines 7.1% in 2016
Companies and brands
Aurum overtakes Signet to become market leader
Cartier stands out for consistent quality
Figure 3: Attitudes towards and usage of selected brands, July 2017
Leading brands target new audiences
The consumer
Self-purchasing drives watch market
Figure 4: Purchasing of jewellery and watches, July 2017
More people shopping online
Figure 5: Where people shop for precious metal jewellery and watches, in-store or online, July 2017
Pandora and Argos the most shopped at retailers
Birthdays are a popular gifting occasion
Figure 6: Occasions people buy jewellery and watches as a gift, July 2017
Necklaces drive the jewellery market
Figure 7: Types of jewellery purchased, July 2017
People research online ahead of purchase
Figure 8: Jewellery and watch shopping behaviour, July 2017
What we think
ISSUES AND INSIGHTS
The ongoing impact of Brexit on the market
The facts
The implications
Watches continuing to drive growth, but the market is increasingly competitive
The facts
The implications
What are the opportunities in the market?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Sales of jewellery and watches rise 2.3% in 2016
Luxury watch market boosted by weak Sterling and rising inbound tourism
Uplift in Swiss watch exports to the UK
Decline in hallmarking highlights challenges in precious metal market
Precious metal prices rise in 2016
MARKET SIZE AND FORECAST
Jewellery and watch market forecast to reach £6.1 billion by 2022
Figure 9: Best- and worst-case forecast value sales of jewellery and watches, 2012-22
Figure 10: Value sales of watches and jewellery, at current and constant prices, 2012-22
Forecast methodology
MARKET SEGMENTATION
Sales of watches expected to rise 5.1% in 2017
Figure 11: Estimated share of total UK jewellery and watch market, 2016
Figure 12: UK retail value sales of jewellery and watches, by sector, 2012-17
MARKET DRIVERS
Rising inflation puts pressure on consumers
Figure 13: Real wages growth – Percentage change in average weekly earnings vs inflation, August 2014-July 2017
Consumer confidence weakening
Figure 14: How consumers would describe their financial situation, August 2016-July 2017
Consumer spending priorities
Figure 15: What consumers spend their extra money on, July 2017
An ageing population threatens market
Figure 16: Trends in the age structure of the UK population, 2014-24
Figure 17: Trends in the age structure of the UK population, 2014-24
Gifting opportunities
Declining birth and marriage rate
Figure 18: Total number of births in the UK, 2011-15
Figure 19: Total number of marriages in the UK, 2011-15
Rising number of people visiting the UK
Figure 20: Total overseas residents’ visits to the UK, 2012-16
Figure 21: Total overseas residents’ visits to the UK, by purpose of visit, 2012-16
Figure 22: Overseas residents’ spending in the UK, by purpose of visit, 2012-16
Increasing smartwatch ownership
Figure 23: Ownership of mobile phones and smartwatches, 2015-17
Swiss watch exports decline, but exports to the UK increase
Figure 24: Value of Swiss watch exports, by watch type, 2012-16
Gold and silver prices return to growth in 2016
Declining hallmarking in the UK
Figure 25: Percentage change in number of items hallmarked, by precious metal type, 2015-16
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Leading brands reposition to attract new customers
Growing emphasis on travel retail
Plenty of innovation in the watch market
Cartier and Sekonda benefit from strong brand awareness
LEADING SPECIALIST RETAILERS
Sales performance
Figure 26: Leading specialists’ revenues, 2011-16
Outlet numbers
Figure 27: Leading specialists’ outlet numbers, 2011-16
Sales per outlet
Figure 28: Leading specialists’ sales per outlet, 2015
Figure 29: Leading specialists’ sales per outlet, 2011-16
COMPETITIVE STRATEGIES
Mergers and acquisitions
Aurum Holdings buys major US jewellers
Movado Group acquires Olivia Burton
Theo Fennell saved from administration
Breitling bought by London-based investment group
Distribution changes
Tapping into the travel retail market
Signet limiting investment in smaller shopping centres
Ralph Lauren postpones plans to build UK wholesale-to-retail channel for watches
Thomas Sabo debuts new store concept
Online developments
Net-a-Porter strengthens online jewellery and watch offer
Jewellers experiment with chatbots
Brand positioning
Tiffany & Co. targets younger audience
Aurum focusing on prestige as opposed to fashion products
Signet targeting growth in mid-market
Fraser Hart also eyes mid to high-end market
Links of London reveals new strategy
Store investment
Department stores increase watch selling space
Mono-brand stores increasingly important in the UK watch retail landscape
Casio unveils new G-Shock store
Figure 30: G-Shock store on Carnaby Street, London, 2017
A new flagship for Mappin & Webb
LAUNCH ACTIVITY AND INNOVATION
New players in the UK jewellery market
Figure 31: Glitzbox at Old Street Station, London, 2017
Wearable technology and product innovation
Louis Vuitton and Movado enter the smartwatch market
New smartwatch targets visually impaired consumers
Casio reveals new time-sync technology
Apple Watch vs Google Android Wear
Personalisation gains momentum in watch market
Extend my Brand
Capturing data with retail technology
Department stores bolster offer with pop-up shop-in-shops
Jewellers embrace the Experience is All Trend
Celebrity lines gain momentum
Non-specialists boost weddings jewellery offer
Tapping into demand for ethical products
ADVERTISING AND MARKETING ACTIVITY
Above-the-line spending declines in 5.6% in 2016
Figure 32: Total above-the-line, online display and direct mail advertising expenditure on jewellery and watches, 2012-16
Richemont ramps up advertising expenditure
Figure 33: Total above-the-line, online display and direct mail advertising expenditure on jewellery and watches, by advertiser, 2012-16
Less emphasis on press advertising
Figure 34: Total above-the-line, online display and direct mail advertising expenditure on jewellery and watches, by media type, 2016
Figure 35: Total above-the-line, online display and direct mail advertising expenditure on jewellery and watches, by media type, 2012-16
Key campaigns
Ongoing repositioning at Tiffany & Co
Fraser Hart targets mid to high-end market with new advertising message
Harvey Nichols highlights rare jewellery in new campaign
Pandora unveils experiential Valentine’s campaign
Swarovski taps into influencers
Nielsen Ad Intel coverage
BRAND RESEARCH
Brand map
Figure 36: Attitudes towards and usage of selected brands, July 2017
Key brand metrics
Figure 37: Key metrics for selected jewellery and watch brands, July 2017
Brand attitudes: Cartier known for consistent quality
Figure 38: Attitudes, by brand, July 2017
Brand personality: Sekonda seen as accessible
Figure 39: Brand personality – Macro image, July 2017
Links of London viewed as stylish
Figure 40: Brand personality – Micro image, July 2017
Brand analysis
Sekonda garners highest levels of trust
Figure 41: User profile of Sekonda, July 2017
Links of London’s style credentials stand out
Figure 42: User profile of Links of London, July 2017
Tissot benefits from its good reputation
Figure 43: User profile of Tissot, July 2017
Cartier’s exclusivity sets it apart
Figure 44: User profile of Cartier, July 2017
TAG Heuer is a trendsetter
Figure 45: User profile of TAG Heuer, July 2017
Olivia Burton expresses the wearer’s personality
Figure 46: User profile of Olivia Burton, July 2017
Ti Sento suffers from low brand awareness
Figure 47: User profile of Ti Sento, July 2017
THE CONSUMER – WHAT YOU NEED TO KNOW
Purchasing peaks amongst young and affluent
Rising number of people shopping online
Birthdays primary reason for gifting
Necklaces have a broad appeal
Strong demand for ethically sourced jewellery
PURCHASING OF JEWELLERY AND WATCHES 
Young people drive the jewellery and watch market
Figure 48: Consumers who have bought jewellery and/or watches in the last five years, by demographics, July 2017
Precious metal jewellery a popular choice for gift buyers
Figure 49: Purchasing of jewellery and watches, July 2017
Popularity of silver amongst female buyers prevails
Figure 50: Purchasing of precious metal jewellery in the last five years, by age and gender, July 2017
Older men choose to gift gold jewellery
Figure 51: Purchasing of precious metal jewellery in the last five years, by age and gender, July 2017
Revived watch interest amongst older men
Figure 52: Purchasing of watches in the last five years, by age and gender, July 2017
Rising number of women buying into smartwatch trend
Figure 53: Purchasing of watches in the last five years, by age and gender, July 2017
One in five young men buy costume jewellery for themselves
Figure 54: Purchasing of costume jewellery in the last five years, by age and gender, July 2017
A third buy just one type of jewellery or watches
Figure 55: Repertoire of jewellery and watch purchases, July 2017
WHERE THEY SHOP FOR JEWELLERY AND WATCHES
People still prefer to shop in-store…
Figure 56: Where people shop for precious metal jewellery and watches, in-store or online, July 2017
…but a rising number of people are shopping online
Figure 57: Where people shop for precious metal jewellery and watches, in-store or online, July 2016 and July 2017
Men drive online purchases
Figure 58: Where people shop for precious metal jewellery and watches, in-store or online, by gender, July 2017
Online also popular amongst older consumers
Figure 59: Where people shop for precious metal jewellery and watches, in-store or online, by age, July 2017
The popularity of Pandora confirmed
Figure 60: Retailers used to buy precious metal jewellery in the last five years, July 2017
Online-only retailers’ strength in the watch market
Figure 61: Retailers used to buy watches in the last five years, July 2017
Fashion retailers dominate costume jewellery sales
Figure 62: Retailers used to buy costume jewellery in the last five years, July 2017
Retailer loyalty higher amongst watch buyers
Figure 63: Repertoire of retailers used for buying jewellery and watches, July 2017
OCCASIONS JEWELLERY AND WATCHES ARE PURCHASED
Half of gift shoppers buy for birthdays
Figure 64: Occasions people buy jewellery and watches as a gift, July 2017
Women more likely to gift at Christmas
Figure 65: Occasions people buy jewellery and watches as a gift, by gender, July 2017
Millennials drive Valentine’s purchases
Figure 66: Occasions people buy jewellery and watches as a gift, by age, July 2017
Less affluent gift at Christmas
Figure 67: Occasions people buy jewellery and watches as a gift, by socio-economic status, July 2017
Almost a fifth buy for multiple occasions
Figure 68: Repertoire of occasions people buy jewellery and watches as a gift, July 2017
TYPES OF JEWELLERY PURCHASED
Necklaces most popular style of jewellery
Figure 69: Types of jewellery purchased, July 2017
Necklaces and earrings have broad appeal
Figure 70: Types of jewellery purchased, by age and gender, July 2017
Bracelets popular purchase for older males
Figure 71: Types of jewellery purchased, by age and gender, July 2017
One in five buy four or more types of jewellery
Figure 72: Repertoire of types of jewellery purchased, July 2017
JEWELLERY AND WATCH SHOPPING BEHAVIOUR
Growing appetite for ethical jewellery
Figure 73: Jewellery and watch shopping behaviour, July 2017
Men willing to spend more on personalisation, women on unique designs
Figure 74: Agreement with jewellery and watch shopping behaviour statements, by gender, July 2017
Fashion trends important to young people
Figure 75: Agreement with jewellery and watch shopping behaviour statements, by age, July 2017
Young and affluent plan to spend more in future
Figure 76: Agreement with the statement ‘I am planning to spend more on jewellery/watches in the next year’, by demographics, July 2017
CHAID ANALYSIS
Methodology
Targeting affluent young with personalisation
Figure 77: Jewellery and watches – CHAID – Tree output, July 2017
Figure 78: Jewellery and watches – CHAID – Table output, July 2017
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology

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