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Jewellery & Watches Retailing - UK - September 2018

OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY
The market
Market estimated to reach £5.7 billion in 2018
Figure 1: Best- and worst-case forecast value sales of jewellery and watches, 2013-23
Watches predicted to continue outperforming jewellery
Figure 2: Estimated share of total UK jewellery and watch market, 2016-18
Hallmarking in the UK fell 4.3% in 2017
Figure 3: Number of items sent for hallmarking at all UK Assay offices, 2006-17
Swiss watch exports up in value, but down in volume
Figure 4: Percentage of Swiss watch global exports by price range, 2017
Companies and brands
Watches of Switzerland dominates the market
Tiffany & Co. appeal boosted among younger audience
Figure 5: Attitudes towards and usage of selected brands, July 2018
Brands benefit from 2018’s Royal Wedding and FIFA World Cup
The consumer
Watches most popular personal purchase
Figure 6: Who have you bought for in the last five years, July 2018
Omni-channel retailers are attracting more customers
Figure 7: Retailers used to buy jewellery or watches in the last five years, July 2018
Sterling silver most popular precious metal
Figure 8: Types of precious metal jewellery purchased in the last five years, July 2018
Leather and stainless steel strap trends
Figure 9: Type of watch straps purchased in the last five years, July 2018
Consumer demand for less expensive jewellery
Figure 10: Jewellery consumer behaviour statements, July 2018
Two in five think watch advertising needs to broaden horizons
Figure 11: Watch consumer behaviour statements, July 2018
What we think
ISSUES AND INSIGHTS
Watch brands struggle to differentiate in overcrowded middle market
The facts
The implications
Growing grey market threatens brand equity
The facts
The implications
Men’s fashion jewellery takes off
The facts
The implication
Figure 12: Lewis Hamilton’s Maria Tash piercings, 2018
THE MARKET – WHAT YOU NEED TO KNOW 
Sales of Jewellery and watches estimated to grow 2.9% in 2018
Watches sector to see largest growth in the category
Export of Swiss watches up in the UK
Hallmarking continues to decline in the precious metal market
Low levels of UK retail footfall
MARKET SIZE AND FORECAST
Jewellery and watch market forecast to reach £6.4 billion by 2023
Figure 13: Best- and worst-case forecast value sales of jewellery and watches, 2013-23
Figure 14: Value sales of watches and jewellery, at current and constant prices, 2013-23
Forecast methodology
MARKET SEGMENTATION
Watches set to see largest growth in the category
Luxury watches drive growth
Jewellery remains less reliant on ultra-high-end
Figure 15: Estimated share of total UK jewellery and watch market, 2016-18
Figure 16: UK retail value sales of jewellery and watches, by sector, 2013-18
MARKET DRIVERS
Weakened sterling propels growth of high-value items
Figure 17: Sterling to US Dollar exchange rate chart, by month, 2013-18
Sales of smartwatches approaches 2 million in 2017
Royal Wedding encourages purchasing at lower-end of the market
Figure 18: Meghan Sparkle Argos replica ring, 2018
Figure 19: Consumer behaviour surrounding the Royal Wedding, April 2018
Christmas most significant seasonal event for jewellery and watches
Figure 20: Amount who purchased jewellery and watches across the seasonal events
Hallmarking in decline
Figure 21: Number of items hallmarked across UK Assay Offices, by type of precious metal, year-to-date June 2017/June 2018
Figure 22: Number of items hallmarked across UK Assay Offices, by weight, year-to-date June 2017/June 2018
Figure 23: Number of items sent for hallmarking at all UK Assay offices, 2006-17
Exports of Swiss watches up
Figure 24: Percentage of Swiss watch global exports by price range, 2017
UK retail footfall down
Figure 25: Year-on-year footfall change, by location, January 2015-July 2018
Fewer purchasing costume jewellery
Figure 26: Items respondents have purchased for themselves, percentage point change between June 2017 -June 2018
Online retailing becoming more important
Figure 27: Where UK luxury consumers purchased luxury products in the last 18 months, June 2018
Marriage rates declining overall, but marriages to same-sex couples on the up
Figure 28: Number of marriages in Great Britain, 2005-15
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW 
Stores give more space to jewellery and watches
Luxury etailers expand into fine jewellery and watches
Brands benefit from Royal Wedding and FIFA World Cup
Increase in outdoor advertising spend
Tiffany targets Millennial customers
LEADING SPECIALIST RETAILERS
Sales performance
Figure 29: Leading specialists’ revenues, 2012-17
Watches of Switzerland dominate the market
Outlet numbers
Figure 30: Leading specialists’ outlet numbers, 2012-17
Sales per outlet
Figure 31: Leading specialists’ sales per outlet, 2016
Figure 32: Leading specialists’ sales per outlet, 2012-17
COMPETITIVE STRATEGIES
Acquisitions
Richemont buys Watchfinder
Movado Group acquires MVMT
Figure 33: MVMT Instagram page, which has 1 million followers, 2018
Retail network expansions
Daniel Wellington opens more stores, but reduces number of suppliers
Figure 34: Daniel Wellington in Carnaby Street, 2018
Olivia Burton to open first UK store following international expansion
Hublot’s new London boutique
Argento expands its presence
More space given to jewellery and watches
Harrods unveils updated Fine Watch Room
Figure 35: Harrods new fine watch department
Figure 36: Vacheron Constantin Harrods boutique, 2018
Net-a-Porter expands selection of fine watches and jewellery
Figure 37: Fine Jewelry & Watch Suite on Net-a-Porter, 2018
Selfridges transforms accessories hall
Social media and online presence
Personalised marketing
Patek Philippe on Instagram
Figure 38: Patek Philippe’s Instagram debut, 2018
LAUNCH ACTIVITY AND INNOVATION
Smartwatches promote sport and healthy living
Leading player Apple’s innovations
Fitbit launches Versa
Figure 39: Fitbit Versa Colour range
Smart hybrids
Samsung launches Galaxy Watch
Figure 40: The Samsung Galaxy Watch
Timing of the beautiful game
Figure 41: Hublot - official sponsor of the 2018 FIFA World Cup
Patek Philippe’s Instagram debut
Figure 42: Patek Philippe watch face
Back to the future
Cartier reissues its Santos De Cartier
Rolex reissue the ‘Pepsi’
Figure 43: Jubilee stainless steel bracelet of the Rolex GMT, 2018
Personalisation and experiences
Richemont targets aspirational millennials
Figure 44: Baume customisation options, 2018
Customisable jewellery at Vashi
Breakfast at Tiffany’s
Figure 45: Tiffany & Co.’s take on Breakfast at Tiffany’s– The Blue Box Café
Brands targeting Millennials
De Beers celebrates Millennials
#Swatchthis
Chopard’s ethical promise
De Beers to sell synthetic diamonds
Augmented reality
Swarovski experiments with AR
Boucheron celebrates its history with modern technology
Royal wedding fever
Figure 46: Buckley London’s Meghan Markle Replica Ring, April 2018
ADVERTISING AND MARKETING ACTIVITY
Above-the-line spending increases 9.8% in 2017
Figure 47: Total above-the-line, online display and direct mail advertising expenditure on jewellery and watches, 2013-17
Leading Players
Figure 48: Swatch Skin #your move campaign
Figure 49: Tiffany & Co.’s Tiffany blue cabs from the “Believe in dreams” campaign
Figure 50: Total above-the-line, online display and direct mail advertising expenditure on jewellery and watches, by advertiser, 2013-17
Figure 51: Total above-the-line, online display and direct mail advertising expenditure on jewellery and watches, by media type, 2017
Increase in outdoor advertising spend
Figure 52: Total above-the-line, online display and direct mail advertising expenditure on jewellery and watches, by media type, 2017
Figure 53: Total above-the-line, online display and direct mail advertising expenditure on jewellery and watches, by media type, 2013-17
Key campaigns
Movado makes large investment in outdoor advertising
You never actually own a Patek Phillippe watch
Swarovski’s #BeBrilliant influencer campaign
Nielsen Ad Intel coverage
BRAND RESEARCH
What you need to know
Brand map
Figure 54: Attitudes towards and usage of selected brands, July 2018
Key brand metrics
Figure 55: Key metrics for selected brands, July 2018
Brand attitudes: Tiffany & Co. worth paying more for
Figure 56: Attitudes, by brand, July 2018
Brand personality: Thomas Sabo perceived as fun
Figure 57: Brand personality – Macro image, July 2018
Pandora viewed as exciting
Figure 58: Brand personality – Micro image, July 2018
Brand analysis
Pandora sees most brand commitment from female teenagers
Figure 59: User profile of Pandora, July 2018
Tiffany & Co. perceived as exclusive
Figure 60: User profile of Tiffany & Co., July 2018
Omega popular amongst males 55 and over
Figure 61: User profile of Omega, July 2018
Fossil uses strategic partnerships to increase brand awareness
Figure 62: User profile of Fossil, July 2018
Thomas Sabo perceived as stylish
Figure 63: User profile of Thomas Sabo, July 2018
Casio highlights its product durability
Figure 64: User profile of Casio, July 2018
Larsson & Jennings needs to improve its brand awareness
Figure 65: User profile of Larsson & Jennings, July 2018
THE CONSUMER – WHAT YOU NEED TO KNOW 
Majority of watch customers loyal to one retailer
Omni-channel retailers are attracting more customers
Sterling silver the most popular precious metal jewellery
Rose gold most popular among young females
Analogue watches popular with older consumers
Consumer demand for less expensive jewellery
WHAT CONSUMERS BUY
Watches most popular personal purchase
Figure 66: Who have you bought for in the last five years, July 2018.
Most people have bought jewellery in the last five years
Figure 67: Who have you bought for in the last five years, July 2018
Young men most prevalent watch buyers
Figure 68: Watch buyers over the past five years, by age and gender, July 2018
Two thirds of watch customers loyal to one retailer
Figure 69: Repertoire of retailers used for buying jewellery and watches, July 2018
WHERE THEY SHOP FOR JEWELLERY AND WATCHES
Consumers continue to prefer to shop in-store
Figure 70: Where people shop for precious metal jewellery and watches, in-store or online, July 2018
Omni-channel retailers are attracting more customers
Figure 71: Retailers used to buy jewellery or watches in the last five years, July 2018
More specialist brands available on Amazon
H Samuel popular with Millennials
Pandora continues its popularity
Figure 72: Jewellery brands purchased in the last five years, July 2018
Seiko most purchased watch brand
Figure 73: Watch brands purchased in the last five years, July 2018
TYPES OF JEWELLERY PURCHASED
Sterling silver most popular precious metal
Figure 74: Types of precious metal jewellery purchased in the last five years, July 2018
Figure 75: Consumers who purchased rose gold precious jewellery in the last five years, by age and gender, July 2018
Diamonds are forever
Figure 76: Type of gemstones purchased in the last five years, July 2018
Males purchase more precious gemstone jewellery
Figure 77: Precious gemstones vs. non-precious gemstones purchased in the last five years, by age and gender, July 2018
TYPES OF WATCHES PURCHASED
Analogue watches most popular with older consumers
Figure 78: Type of watch(es) purchased in the last five years, July 2018
Leather and stainless steel strap trends
Figure 79: Type of watch straps purchased in the last five years, July 2018
Figure 80: Materials of watches in Swiss watch exports for 2017
JEWELLERY SHOPPER BEHAVIOUR
Consumer demand for less expensive jewellery
Figure 81: Jewellery consumer behaviour statements, July 2018
Figure 82: Maria Tash’s selection of items for under $300, 2018
Second-hand jewellery market underdeveloped
People spending more on jewellery purchase familiar brand names
Figure 83: Jewellery and watches retailing – CHAID – Tree output, July 2018
Men more drawn to brand names
Social media a helping hand to unknown brands
Figure 84: Jewellery buying behaviours – CHAID – Table output, July 2018
Figure 85: Watch buying behaviours – CHAID – Table output, July 2018
Methodology
WATCH SHOPPER BEHAVIOUR
Two in five think watch advertising needs to broaden horizons
Figure 86: Watch consumer behaviour statements, July 2018
Men see watches as investment pieces
Figure 87: Watch buyers that would purchase watches as an investment, by gender, July 2018
Figure 88: Patek Philippe ‘Generations’ campaign, 2018
Grey market an area of concern for luxury watch market
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology

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