To brand or not to brand? Please, that question was so 2010. What’s more pertinent is why founders of international jewellery brands continue to set their sights on Australia and New Zealand, markets that are not only tiny in comparison to many other international territories but seemingly flooded with jewellery brands already.
“Australia has been ripe for disruption for a while now,” says Andy Wright, brand specialist and co-founder of Sydney-based creative agency For the People.
Wright believes local consumers have been a bit short-changed in the retail stakes, citing the mentality of Australian companies to protect “what they have” as opposed to embracing innovation as a primary reason.
“Something new, proven and exciting from overseas is often a good and fresh alternative,” he states.
Jesper Nielsen, founder of Danish brand Endless Jewelry, is banking on Wright being correct to help him secure success Down Under. Nielsen, a former member of the international Pandora management team, visited Australia in February this year to officially launch Endless, which specialises in colourful leather wrap bracelets and charms. At the time, he told Jeweller that although there might be similar jewellery offerings on the market, none had been able to transition from “selling a product” to “selling a brand”.
Asked now about competing with other brands in Australia, Nielsen is not short on confidence. “There are definitely more small ‘copy’ brands out there but there’s still room for two to three mega brands,” he says.
Since launching the brand in 2013, Nielsen has established a presence for Endless in 21 markets worldwide and signed 3,500 retail stockists, so the founder has cause for optimism. The current challenge lies in meeting delivery schedules; however, a new manufacturing partnership agreement announced in May is expected to help double production capacity.
“My original aim [for Australian/New Zealand delivery] was to be ready for Mother’s Day [May 10] but, while I was in Australia earlier this year, we announced that the first deliveries would take place in July or August,” Nielsen explains. “We are experiencing tremendous and growing demand but are continuously upgrading our production facilities and distribution plan – everything is still running according to the July/August scenario.”
South African jewellery supplier Miglio Designer Jewellery is another new entrant and CEO Jenny Miller has pinpointed Australia and New Zealand as key to an international expansion strategy. Like Nielsen, Miller also visited Australia to meet with industry stakeholders, a move she says provided invaluable market insight.
“I was pleased to discover how receptive Australia is to designer brands,” she says. “I’ve listened carefully to stories of other brands entering the Australian market and I will ensure our approach is always personal, flexible and collaborative.”
Miller was surprised to learn how few international brands hold and distribute stock directly in Australia, adding that her business – jewellery made from base metal and featuring burnished silver-plating – had a sales and distribution office in Perth.
Interestingly, Miglio has operated in Australia for the past five years under a ‘direct-selling method’, similar to the party-planning concept adopted by companies like Avon and Tupperware.
“By adopting the direct selling model, we have been able to establish that there is a strong market for Miglio in Australia,” she says, commenting that there had been significant demand for expansion into retail stores.
Other suppliers that have recently secured local distribution rights for international brands are also claiming to be hitting the mark with consumers.
When Larry Porter announced last year that his business, Bolt International, had signed a deal to distribute fashion jewellery brand Lola and Grace – developed by industry juggernaut Swarovski Group – he told Jeweller that he was confident the offering was well positioned to take advantage of current retail conditions and fill a gap in the market.
It seems these predictions are proving correct, with Porter now stating: “It [Lola and Grace] has been very well received. And more importantly, the sell-through performance in store has been excellent at such an early stage.”
“The consistent feedback we have received is that Lola and Grace has provided a key entry price-point that our retailers were previously missing, which has proven extremely effective given current trading conditions,” he says, adding that 85 per cent of the range retails for under $100.
According to Timesupply managing director Ken Abbott, German brand Coeur de Lion has exceeded both his and retailer expectations. He attributes the brand’s success to unconventional design, adventurous use of colour, timeless style and handmade German quality.
“I personally don’t think there is such a thing as too many brands coming into the local market. It is fantastic for the retailer and the retail customer to have choice,” Abbott says.
With so many options though, isn’t there potential for a brand backlash?
“Not brands as a group but if a brand is over-hyped and fails to deliver, there would definitely be a backlash for that individual brand,” he states.
Brand power
According to Phil Edwards, managing director for Thomas Sabo and Nikki Lissoni supplier Duraflex Group Australia (DGA), demand for branded product in the Australian and New Zealand market shows no sign of slowing.
“There will never be too many brands as consumer supply and demand will eliminate the poor-performing brands automatically,” Edwards explains.
Fabuleux Vous is a supplier that distributes the Fabuleux Vous sterling silver jewellery range in addition to representing eight brands in New Zealand, including Endless, Julie Sandlau and Disney Couture.
Director Helen Thompson-Carter acknowledges that while retailers have been “badly burnt” in the past by some brands, the bottom line in this economy is that brands need retailers and retailers need brands.
“Brands provide the transactional sale. Choose well and they will attract a clientele that the retailer hasn’t had before, such as the millennial market – young people happy to spend all their money on branded products,” she says.
“Brands can be the difference in cash flow in a retail store – the everyday bread and butter.”
As more brands secure a firm footing in the industry, how have mature brands adjusted to changing market demands?
Edwards says a strengthening and reliance on branded jewellery as a category has brought higher performance expectations, both in consumer demand and sales. He points to pressure on suppliers to align local product launches with international launches as one of the new demands.
“With the power of the rapidly changing digital landscape, particularly social media, consumers want to be able to purchase products here as soon as they launch in Europe,” Edwards explains. “As a distributor, we work very closely with our international brands to ensure we are able to meet this timely demand here in Australia and New Zealand.”
In another example of its efforts to support retailers, DGA has announced an incentive campaign for Thomas Sabo sterling silver stockists. Stores participating in the Thomas Sabo Ambassador Program nominate one staff member to act as ambassador and receive visual merchandising, sales, stock management and training.
“Our retail partners have a significant investment in Thomas Sabo and this program is designed to drive the best possible return on investment,” Edwards says.
A store brand ambassador program has also been introduced for stockists of Kagi. Founder and designer Kat Gee states that the initiative, which was launched in September 2014, is one of several programs in place to support retailers and reward staff for achieving excellence in sales and merchandising.
“Retailers are keen to embrace the brand and learn as much product knowledge as possible to give them confidence in front of the customer,” Gee explains. “We are therefore really focusing on advancing our training programs with our retailer partners.”
When it comes to meeting other retailer demands, Gee says, “Something we are noticing is the shortening of seasonal cycles, meaning smaller ranges are released more often. Customers want to see something new every time they visit so we, as designers, need to continually be innovating and refreshing our range.
“We are also seeing jewellers who want to be part of the design process and collaborate with us as to what they feel will work best in their stores. That’s one of the benefits of being an Australasian design-based company – we’re able to respond to localised needs.”
Brand power
The value of design is central to the philosophy at Najo, an Australian brand founded by Jo Tory almost 30 years ago.
“At Najo we believe that it is the design element and integrity of the product that speaks to that personal/emotional part of the consumer. This is the basis of the Najo brand,” Tory explains, adding, “We are about the product and the story of our brand rather than just the marketing.”
In line with this, Tory says retailers shouldn’t be afraid to deviate from better-known brands: “I personally would love to see more bespoke jewellery, increased profiling of Australian designers and more individuality in jewellery retail rather than seeing the same brands in multiple stores.”
In her opinion, stocking large, international jewellery brands that are highly visible will not necessarily guarantee added value for a local jewellery store.
“I think it is fair to say that a lot of these brands are about the marketing rather than the product. In light of this, I feel that a large proportion of jewellery retailers in Australia have lost their way, relying on marketing hype and the latest fad to keep their businesses alive rather than focusing on jewellery design and quality product.”
Pandora Australia president David Allen has a similar train of thought: “I feel that a lot of retailers [generally speaking across the retail sector, not just jewellers] are losing their way. They have lost their soul – they are not sure what their consumer is looking for, there is no emotional connection between the team on the floor and the name above the door, and consumers are losing trust.”
According to Allen, the sustainability and ongoing success for retail businesses is based around two key components: the consumer experience and brand representation. He says both elements are central to all decisions made at Pandora Australia, which recently announced an increase of more than 20 per cent in overall revenue for the eighth consecutive quarter.
“There is a narrowing of ‘go-to’ retailers, where consumers are finding their favourite retailers and going back. The number one reason they go back is because they trust the brand, and when I talk about brand, I refer first and foremost to the name above the door as much as I do the brands stocked in stores.
“Brands are built by consumers, not companies,” Allen continues. “The way that consumers perceive a brand defines it. It doesn’t matter what you think your brand promises; what matters is how consumers perceive your brand.”
Similarly, Thompson-Carter encourages retailers to look past their personal preferences, likes and dislikes. “Look through the eyes of the consumer and try to visualise their wants and needs. Look beyond today. What does tomorrow’s world of retail and consumer spending in our industry look like?”
Looking into the future isn’t an easy task but it’s a sentiment definitely worth considering. The good news is that branded jewellery options are sumptuous, almost overflowing. It’s no longer a question of “To brand or not to brand?” Rather, “Which brand will complement my business the most?”