This post is titled ‘How fine jewellery bucks most consumer trends’.
However, another name for this post could be: How fine jewellery is a luxury good, and therefore exempt from most retail trends.
Jewellery as a sector
You see, jewellery is in itself a very interesting sector; it belongs typically to a category of industry called Watches & Jewellery, . However, in this category, ‘jewellery’ can mean many things, ranging from costume jewellery (which you would find at places like Diva, Lovisa and others) though to ‘every-day jewellery’, which you would find at places like Zales or Prouds or Michael Hill, and through to fine jewellery, for which the purveyors are Bulgari, Cartier and so on.
In Australia – and this may not be applicable to other markets such as the UK & the US, which are typically more internet-friendly on a per capita basis – the proportion of jewellery sales made online is a paltry 6%. 6%, with the remaining 94% of sales are those made in store. These statistics were highlighted in a recent Sydney Morning Herald article on how StyleRocks is disrupting the diamond trade with the advent of its customisable engagement rings.
Here is a completely gratuitous image of one of our engagement rings, for which you can choose the metal and the grade of diamond: this is the Lucia and we love it!
How fine jewellery differs from a toaster
The statistic above, taken from a Euromonitor 2014 report, was not at all surprising and merely confirms the trends that we have seen.
And this is where jewellery is very different to other sectors such as, say, dresses or make-up; in that the level of trust to purchase jewellery online is far far greater compared to other products.
For example, we all know what a toaster does: it turns bread into toast. The level of function we require it to have, and the amount of trust we need in our toaster provider, is completely different to what we as consumers require from our jewellery – and particularly from our fine jewellery.
1. The level of investment in a toaster ($50?) is largely irrelevant, when compared to a $500 or even $5000 fine jewellery purchase.
2. When it comes down to it, one toaster is really very much like another; the only variety comes down to colour and shape.
3. Toasters are a very practical piece of everyday equipment; there is far more emotion invested with a jewellery purchase.
4. Last but not least – fine jewellery is waaaayyy more appealing to look at! Here’s another beautiful jewellery image to illustrate this example – our best-selling StyleRocks Russian Rings Necklace:
Fine jewellery as a symbol of a luxury good
And here’s the other thing about fine jewellery: it can’t really be automated.
Every single piece of jewellery has a degree of craftsmanship in it, some more than others (depending on the manufacturer and the piece). This requires human intervention, at various stages of the process – this in turn requires time, which is a labour cost.
A good example of this is our StyleRocks Russian Ring Necklaces. Roughly 98% of these necklaces are engraved; we sometimes receive enquiries about why the cost of engraving is high.
We always respond to the customer explaining the setup time (and cost) for each individual necklace – this seems to help them understand.
Helpfully we also have a video on this process which shows not only the time required in the engraving step of the process, but in fact the number of craftsmen required to create these pieces.
In a world of decreasing prices, fine jewellery…
It’s fair to say that for most household goods and items, prices come down over time. Toasters, TVs, mattresses, clothes, etc. This is due to a combination of things, including a) operational efficiencies b) increased demand and so on.
However, where jewellery bucks the trend is not only due to the manual intervention from the craftsmen, but also down to the simple fact that commodities continue their upward trend.
The price of gold is only going one way – up.
The price of diamonds is only going one way – up.
And there’s a fairly simple reason for this: the amount of gold & diamonds in our earth is finite. And yet there’s more and more consumers wanting them.
So it’s a relatively simple case of supply and demand.
But a lengthy & complicated explanation for your typical consumer.