There was a period when the jewellery industry was playing catch-up in the branding department, trailing behind almost every other retail category.
Those days are long gone and there is no denying branded jewellery has secured its position within the sector. In fact, some jewellers place so much weight on branded product that it is dictating their decisions to open stores.
“Many retailers who are considering opening new or additional stores ring us first to make sure they are able to secure the area before making a final decision,” says Ken Abbott, managing director of Coeur de Lion and Dansk Smykkekunst local distributor Timesupply.
Extreme? Maybe, but this is the current environment.
“There is no doubt that branded jewellery has simply evolved to be an integral part of the jewellery trade and has enjoyed significant growth as it has become more entrenched in the market,” Duraflex Group Australia (DGA) managing director Phil Edwards explains.
The value proposition for jewellery brands is strong: a ready-to-sell product with multiple designs, marketing tools and, importantly, the ability to draw consumers through the door. The industry has leveraged the opportunities of branded ranges for years; however, the category does not come without challenges, all of which are now enhanced in the current conditions of tough trading.
Edwards, whose business distributes several brands including Thomas Sabo, Nikki Lissoni and Engelsrufer, says any brand must be aligned with a jewellery store’s business model.
“Not all brands are suitable for all stores and the challenge to both the jewellery brand and the retail partner [stockist] is to ensure there is an appropriate alignment and expectation of the brand and the store,” he says. “We acknowledge the retail trade is facing some difficult challenges at the moment and this only highlights how imperative it is that retailers have a solid understanding of who their customer base is and cater to them, whilst only ranging brands and product lines that are relevant to their customer.”
It’s a sentiment highlighted by most – if not all – suppliers. Determining the brands that will work for a particular retail business can be an overwhelming exercise, especially when there is no shortage of options.
Decision time
Nationwide Jewellers managing director Colin Pocklington says a key focus for Australia and New Zealand’s largest buying group is helping members identify which brands to stock.
“At this year’s International Jewellery Fair (IJF) in August, we will be conducting a Brands Workshop for members,” Pocklington states, adding, “In the workshop we will show the performance of each brand this year versus last year. We will also show members how to evaluate the performance of brands.”
Pocklington says Nationwide encourages members to review the performance of branded ranges about every six months as stock can quite quickly go out of fashion and may require replacement with a better-performing brand.
Michael Dyer, sales manager of retail-management consultancy Retail Edge Consultants, says there are various key performance indicators (KPIs) that should be used to measure, monitor and maximise brand performance.
“Remember that the ‘I’ in KPI is for indicators – early warning signs of what is actually happening compared to what was expected,” Dyer warns, adding that he believes there are presently two crucial KPIs.
The first is a stock-to-sales ratio, important because many brands ‘drop’ new product multiple times annually.
“These ‘drops’ may only be a few thousand dollars of stock at a time but there could be six or eight a year, which can quickly lead to a blow out in the stock level,” Dyer explains.
He says early advice from suppliers on new releases – typically with an indication of the store’s proposed allocation – should be the catalyst to ‘cash up’ the value of old/discontinued styles in order to find capital for new releases.
“Establishing a stock-to-sales ratio that takes into account stock-turn, mark-up and GST will give you this factor,” Dyer explains. “It can also be applied in reverse to establish the sales-to-stock figure – if your annualised sales are $100,000 and your stock-to-sales ratio is five then you would need $20,000 in stock.”
The other important consideration is reorder fulfilment, Dyer continues.
“Having created demand and then sold the product, the real reward lies in maximising the number of times an item can be sold,” he says. “Rapid reordering is the key. If your reorders are arriving with lower-than-acceptable fulfilment rates – over 90 per cent – then the supplier is inhibiting your success with their product and they need to be told this.”
THE NEW BRAND ECONOMY |
What do Rolex, Lego Group and The Walt Disney Company have in common? They topped this year’s annual Global RepTrak 100 list of most reputable companies. Indeed, Rolex was crowned number one for the second year in a row. The study is conducted by research and advisory firm Reputation Institute (RI) and rankings are based on more than 170,000 ratings collected in the first quarter of 2017. Respondents indicated their willingness to purchase a company’s products, recommend the brand and invest in or work for the company. “Looking at top performers, it’s clear that offering high-quality products, standing behind them and meeting customer needs is foundational to delivering on the brand promise,” RI chief marketing officer Allen Bonde says. “Our data also shows that companies with a strong sense of purpose who are committed to improving on all dimensions of reputation – especially governance and citizenship – tend to be the most highly regarded.” Jack Perlinski, director of brand consultancy DAIS, says successful brands are those that clearly identify and communicate why they are worthwhile from an integrity perspective. “We’re entering a period where the new brand economy is all about trust branding,” Perlinski states. “It’s about taking a step back and really looking at why you do what you do and humanising that – allowing people to touch, experience and hear the passion that you have for what you do and connect that to your product and how service is delivered.” Michael Hughes, managing partner and strategy director of brand agency Truly Deeply, says Tiffany & Co is a great example of how a brand can go over and above the product to create “premium value” for the customer. He also lists Paspaley, “known the world over for the world’s most beautiful pearls,” and Georg Jensen, “built on the founder’s reputation and Danish heritage of quality artist craftsmanship,” as well as Pandora, which has “perfected the art of producing reasonably unique and on-trend design at affordable prices,” as jewellery companies to have mastered the art of branding. Dr Luke Butcher from Curtin University Business School also stresses the importance of value. “Our customers are giving us their precious resources – time, money, relationships – and we need to provide something of value in return,” Butcher states. When asked about the cornerstones of successful branding in today’s market, Butcher points to strategic digital activity as well as analytics that show who is or will purchase from the store. “Broaden your scope and go beyond demographics to consider psychographics like lifestyles, personalities and motives, the social, physical and value-expressive benefits they derive and usage – particular occasions, regularity of use with certain individuals,” he advises. Perlinski says branding principles are universal but businesses still need to evolve and speak relevantly to their markets, particularly important for jewellery retailers that have been operating for a number of years. “Coke has been promoted in our culture for generations and it’s made itself relevant to each new generation by talking their language so these principles are universal,” he explains. “The problem is that we get distracted by bright, shiny objects and the need to compete and outwit and outsmart our competitors. In doing so, sometimes we miss the conversation with the customer.”
Local jewellery retailers won’t have the mammoth budgets of Coke, Rolex and Lego Group but remaining authentic and relevant need not require deep pockets.
Welcome to the new brand economy. |
It works the other way too, with some suppliers commenting that jewellers need to place greater attention on replacing best sellers.
“Retailers – in general – no longer hold multiple stock items unless the brand requires it,” states Helen Thompson-Carter, director of sterling silver jewellery supplier Fabuleux Vous. “Retailers don’t hold multiples and many don’t automatically restock so the best sellers are often gone and consumers see the same old, same old.”
Transforming market
Describing how the branded jewellery sector has evolved in Australia and New Zealand, Thompson-Carter notes the increasing number of brand entries that have either been incredibly successful or complete failures.
“Social media continues to play a massive part in brand growth, driven by the need of consumers to enjoy social acceptance,” Thompson-Carter adds.
“Consumers are educated to buy brands for this acceptance – to be on-trend and fashionable. Pandora is a classic case of this and Karen Walker in New Zealand is also a very good example.”
Indeed, there is no escaping the power of social media in this modern-day branded-jewellery narrative. John Rose, general manager of West End Collection, which recently secured the local distribution rights for Swarovski Group’s fashion jewellery range Adore, explains that the range has a very strong focus on social media.
“Its newly-formed Instagram account adore.jewelry already has more than 6,000 followers and features some beautiful, emotive imagery,” Rose says, adding, “We will be launching the Australian social media campaign in July, which will include local content and local influencers. This will give Australian and New Zealand retailers the opportunity to participate in campaigns that will drive consumers to their doors.”
Similarly Daniel Bentley, co-founder and designer of his eponymous business, points to digital activity as one of the main marketing techniques currently helping to draw consumers into retail stores and maintain loyalty.
“Using newsletters and social media to direct people to our stockists is our focus,” Bentley says. “We will increase this prior to the arrival of our new collections, which are expected to be released in spring 2017.”
To strengthen customer connection and loyalty, Bentley explains that getting up-close and personal with the end-consumer is also proving to be a good tactic.
“In-store events to connect us, the designer, to the clients and have them experience and understand our brand have been very successful,” he says.
Buckley London and Fervor Montreal are relatively new brands in the local market. Jodie Tilia, director of the brands’ local distributor JLM International, states visual merchandising and in-store promotions are paramount for success.
“For jewellery brands like Buckley London, visually-appealing and versatile product displays are key to success in competitive retail spaces,” Tilia explains of the brand
that was founded in the UK in 1989.
“Self-select display equipment is a crucial part of the retail strategy so we carefully design display units to provide the best possible shopping experience,” she continues. “With declining footfall in store and more brands entering the market, floor space is a premium and the focus is on demonstrating the depth and breadth of range in compact display units.”
Tilia adds that Fervor Montreal, which was founded in 2000 and has “rapidly expanded” into a global jewellery brand, runs promotional campaigns throughout the year to keep consumers engaged, such as free gifts with purchase.
Retail responsibility
It’s also important to remember the role that retailers play in the success of branded jewellery collections.
“Branding and marketing are only the start of the road to success,” Abbott says. “It is the consumer’s shopping experience that is of the most importance; brands absolutely rely on the human connection that is provided by the retailer. As distributor, we are fully aware and appreciate this reality – if this were untrue, we would be able to sell jewellery in vending machines.”
Edwards also emphasises this point: “It will always remain the store’s responsibility to continually forge strong relationships with their customer base. While the right brands will attract new customers to the store, they will only return if they have experienced excellent customer service.”
Thompson-Carter warns that the influx of brands has had a negative impact on retail selling techniques.
“Brand dominance has affected the way we sell, if you could even call it selling,” she says. “Retail sales staff are merely ‘servers’ – consumers already know what they want so the engagement is minimal and selling simply becomes a transaction rather than a beautiful experience.
“The challenge for jewellers is how do they retrain their staff to start selling rather than just serving, shifting a learnt behaviour and mindset.”
Bentley believes the stream of new brands is creating a challenge for jewellers whereby they are making rash product decisions and forgetting what makes their business special.
“More retailers seem to be losing their own identities and should be careful that they choose brands that complement their profiles and contribute to a point of difference,” he says. “Retailers have an opportunity to market themselves in a way that reminds clients why they chose them over another store, especially considering many brands are almost everywhere.”
These are important considerations as the industry endures the current trading environment where the fight for the consumer dollar is more important than ever.
The good news is that the abundance of brands on offer means retailers should be able to develop the perfect brand mixes for their customer bases.
Keep sailing those high seas.
CORNERSTONES OF SUCCESSFUL BRANDING |
Michael Hughes from brand agency Truly Deeply outlines the keys to building a successful brand. In jewellery, like many other retail categories, there are basic principles that successful businesses follow to direct, expand and protect brands: Be the only one (and be known for it) – find the gap in the category or create a new one; make sure there’s a strong and clear point of difference. If the business can start a trend or movement, even better! Deeply connect with the customer – focus on the primary audience; know what matters to them and how value can be added to their lives. Continually excite and delight while keeping them engaged through loyalty programmes and social media Have a compelling brand proposition and story – have clarity on what/who the business is, what makes it special, what is its personality and beliefs, what is its approach to jewellery and why does it exist. Businesses need to stand for something beyond making money and delivering good products and services; it needs to emotionally connect with the audience Stand out, be consistent and memorable – create a distinctive and flexible identity system that can be consistently applied across every activity; reinforce the brand promise via the website, packaging, in-store design, advertising, digital and social marketing Align the identity, people and products to create truly-valued brand experiences at every opportunity – ensure the brand is being delivered through behaviour and the performance of product. |