The jewellery retail landscape is fast evolving as consumer preferences change with the advent of digital platforms and shifting priorities. Jewellers should thus adjust their mindsets, offer experiential retail settings, and rebrand their products and themselves to remain relevant in the market.
Jewellery retail is struggling. While some believe it will all blow over, others know that they better invest energy, time and money in getting ready for the future.
But what does that future look like?
Globally, there are many different realities, of course, influenced by cultural, economic and geopolitical changes. But if we take a look at the US for example, we see a decline in jewellery stores closing this year. According to industry data, 194 stores have ceased operations in 2017 so far (442 within the same period in 2016) but we also see a decline in new stores opening – 29 in 2017 versus 83 in the same period last year. Many of the stores closing have been around for several generations, yet many of them failed to evolve with the times.
Let’s face it, jewellery retailers had to go through a number of changes over the last two decades. From selling generic jewellery to the arrival of a tsunami of brands, jewellers had to learn how to buy, introduce and market brands. Then, in 2008, the global economic crisis hit the market hard. And as expected, jewellery being inessential, it hit jewellery retailers even harder. Just when they crawled out of the crisis, they found a whole new world where consumers appeared to have changed the way they buy. Social media influenced both consumers and retailers and their conversation together, and now the brands they fought to have were found all over the Internet at online stores at often better prices, just a swipe away on every mobile device.
A bumpy ride and, according to many, it’s not getting any easier yet. Changes come slow, but one could also look at the future with excitement and anticipation.
Where will it all go in retail?
Today we find ourselves guessing a little where it will all go from here with retail in general. But one thing is certain; nothing will remain as it is or return to how things were. In many countries, we are surrounded by retailers that still have little or no presence online. A static web page is not an online presence. Social media, e-commerce, Beacons and AI are here to stay, and consumers everywhere are embracing them.
But most experts agree that although we don’t know exactly where retail is heading, doing nothing and thinking it will all blow over is kind of the worst thing to do.
A taste of what might be ahead of us is given by Nordstrom in the US. This giant in retail is opening this month its latest store. Nordstrom Local will be completely different and 50 times smaller than its usual stores! The store will have everything from stylists and wine servings to manicurists and personalised style advice but will contain no merchandise at all. Nothing. Could this be the blurring of online and in-store shopping?
The idea is that people can pick up orders here, drop off returns, get personalised advice about their outfit and have the merchandise they choose delivered to them where and how they want it. The store is there for people to connect with the brand and its employees, get customised advice or simply get inspired. No merchandise at all. Is this the future?
The near future
In 2014, McKinsey & Company published a report about the future of jewellery retail in 2020. Now that 2020 is getting closer, it will be interesting to see just how much of this report will come true.
The report was partly created by interviewing people from the jewellery industry and their views on the future.
Here are a few of their predictions:
• International retail groups will acquire small, local players (the independent store or mom & pop store will disappear).
• The 10 largest jewellery houses will increase their share of the market by doubling through acquisitions.
• 10 percent of all jewellery purchases will be done online.