future of jewellery

Topics: Fashion, 2012, Brand Pages: 6 (2410 words) Published: June 5, 2014
36

A multifaceted future:
The jewelry industry in 2020

The trends that have unfolded in the apparel sector over the last three decades appear to be playing out in the jewelry sector, but at a much faster pace.

Linda Dauriz,
Nathalie Remy, and
Thomas Tochtermann

The jewelry industry seems poised for a glittering

To chart the most likely course of the jewelry

future. Annual global sales of €148 billion are

sector, we analyzed publicly available data,

expected to grow at a healthy clip of 5 to 6 percent

studied companies’ annual reports, and

each year, totaling €250 billion by 2020. Consumer interviewed 20 executives at global fine-jewelry appetite for jewelry, which was dampened by the

and fashion-jewelry companies and industry

global recession, now appears more voracious

associations. Our research indicates that five

than ever.

trends that shaped an adjacent industry—
apparel—over the past 30 years are becoming

But the industry is as dynamic as it is fast growing.

evident in the jewelry industry as well, and at a

Consequential changes are under way, both in

much faster pace: internationalization and

consumer behavior as well as in the industry itself.

consolidation, the growth of branded products, a

Jewelry players can’t simply do business as usual

reconfigured channel landscape, “hybrid” con-

and expect to thrive; they must be alert and

sumption, and fast fashion. In this article, we

responsive to important trends and develop-

discuss how these trends could affect the future

ments or else risk being left behind by more

of jewelry and what jewelry companies should do

agile competitors.

to prepare.

37

Internationalization of brands and

The apparel industry is about ten times the size

Toko Ohmori

industry consolidation

of the jewelry industry as measured in annual

In the 1980s, national apparel brands were the

sales, but the average M&A deal value in apparel

clear leaders in their respective markets: C&A in

(€12 billion) is almost 20 times that in jewelry

Germany, for example, and Marks & Spencer in

(€700 million). That said, average deal value in

the United Kingdom. Today, many national brands

jewelry has been rising—by a compound annual

have been outpaced by international brands such

growth rate of 9 percent between 1997 and 2012,

as Zara and H&M. Others have built or expanded

compared with 5 percent in apparel. Recent deals

their international presence. Hugo Boss’s sales

include British company Signet Jewelers’s 2012

outside Germany, for example, grew from

acquisition of US-based retailer Ultra Diamonds

50 percent of its total sales in 1990 to more than

and the Swatch Group’s acquisition of Harry

80 percent today. Apparel has become a truly

Winston in January 2013.

global business.
Growth of branded jewelry
We expect jewelry to follow a similar path. Today,

Branded items already account for 60 percent of

the jewelry industry is still primarily local.

sales in the watch market. While branded jewelry

The ten biggest jewelry groups capture a mere

accounts for only 20 percent of the overall jewelry

12 percent of the worldwide market, and only

market today, its share has doubled since 2003

two—Cartier and Tiffany & Co.—are in Interbrand’s

(Exhibit 1). All executives we interviewed believe

ranking of the top 100 global brands. The rest of

branded jewelry will claim a higher share of the

the market consists of strong national retail

market by 2020, but their views differ on how

brands, such as Christ in Germany or Chow Tai

quickly this shift will occur. Most expect that the

Fook in China, and small or midsize enterprises

branded segment will account for 30 to 40 percent

that operate single-branch stores.

of the market in 2020.

Our interviewees expect that a handful of thriving

In our...
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