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A recent study has indicated that branded jewellery will account for up to 40 per cent of jewellery sales in 2020
A recent study has indicated that branded jewellery will account for up to 40 per cent of jewellery sales in 2020

Branded jewellery sales set to rise

A new study has found that branded jewellery sales will increase rapidly over the coming years and are estimated to account for up to 40 per cent of jewellery transactions by 2020.

Consultancy firm McKinsey & Company has forecast a rise of 5-6 per cent year-on-year profits in the sector in the study Multifaceted Future: The Jewellery Industry in 2020. This accounts for sales estimated at £250 billion (AU$414.2b) globally by the end of the decade.

The study was based on interviews with 20 executives “at global fine-jewellery and fashion-jewellery companies and industry associations.” The general consensus among these executives is that the 10 largest jewellery brands are expected to double their market share by 2020, primarily through the acquisition of local companies.

Taking into account that branded items contribute 60 per cent of sales in the watch market, McKinsey asked executives and industry associates to consider consumer shifts in branded jewellery which was previously responsible for 20 per cent of sales in 2011 and 19 per cent of sales in 2009.

The research also identified three types of consumers driving the growth of branded jewellery:

• “New money” consumers who wear branded jewellery to show off their newly acquired wealth (in contrast to “old money” consumers, who prefer heirlooms or estate jewellery)
• Emerging-market consumers, for whom established brands inspire trust and the sense of an upgraded lifestyle—a purchasing factor quoted by 80 per cent of interviewees
• Young consumers who turn to brands as a means of self-expression and self-realisation

McKinsey’s analysis also found that online jewellery sales are only 4 to 5 per cent of the market today, with “substantial variations across regions, brands, and types of jewellery”.

In recognising the growth as potentially saturating the market, the study concludes that retailers must look to offer a point of difference in order to succeed, stating:

“[It is] crucial for those in the business to strengthen and differentiate their product through unique, distinctive designs, which can be especially challenging for small artisans who do not have the marketing prowess to compete.”

More reading
Multifaceted Future: The Jewellery Industry in 2020
The evolution of branded jewellery in 2018

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Wednesday, 16 October, 2019 10:37am
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