From Cradle to Grave

Our Abiding Attachment to Jewelry

From Cradle to Grave

Jewelry. A universal form of adornment.

Bold or understated, sparkling or subdued, big-ticket or bauble, there are few consumer products that offer such a personalized method of self-expression. This month, FUSE looks at jewelry’s place in history, reviews the current and projected state of the jewelry market, and explores how consumer demand and technology are shaping the evolution of this proven Consumer Alpha product.

JEWELRY’S PLACE IN HISTORY

The practice of decorating one’s body with jewels, rare metals and other items is as old as the human race. Evidence unearthed from prehistoric times indicates that earliest man embellished himself with stones, shells and even bones. Whether as a mark of status or a talisman against danger can never be known, but the mere presence of these items indicates that body adornment has always been important. Ancient Egyptians and Mesopotamians were the first to develop the skills of metallurgy and gem collection, giving birth to what would become the modern jewelry we recognize today. The trove of archaeological jewelry found in tombs from this period demonstrates the important role that jewelry played on a day-to-day basis and even in the afterlife.

JEWELRY’S PLACE IN HISTORY

Medieval and Renaissance jewelry dramatically reflected class distinctions. Royalty and nobility laid claim to gold, silver and precious gems, while base metals such as pewter and copper were relegated to the lesser populations. Jewelry continued its tradition as the preferred method to reflect status, afford protection, or both. The 17th and 18th centuries brought expanding global trade routes that carried valuable gemstones to all corners of the world. Diamonds came to dominate jewelry design, and the upper classes demonstrated an insatiable appetite for this ultimate status symbol – creating magnificent jewelry sets deemed essential for court life.

Jewelry’s evolution to the products we recognize today began in the late 19th century. Although still subject to social stratification, more and more of the populationhad the freedom to achieve levels of financial and social success previously unimagined. They took their newfound wealth and acquired jewelry to offer visual proof of their newly acquired status in society. No longer were gemstones and rare metals the exclusive purview of the aristocracy. Fine jewelry was entering the mainstream.

As the 20th century kicked off, consumer demand for jewelry continued unabated and manufacturers enthusiastically responded. Marketing efforts came to the forefront and for the first time the distinction between fine and fashion jewelry was made. Fine jewelry is made from precious metals, including gold or platinum, and may include precious gemstones like diamonds, rubies, sapphires or emeralds. Fashion jewelry uses less valuable materials, such as inexpensive metals and semi-precious or imitation stones.

The 1920s and 1930s saw a rise in popularity of fashion jewelry by consumers who desired the popular fine jewelry styles but could not afford them. Jewelry manufacturers responded to this demand and a new category of jewelry purchaser was born – the aspirational consumer.

World War II further bolstered the market for fashion jewelry. Although war was straining the economy, consumer desire for adornment didn’t abate. Consumers with disposable income helped catapult fashion jewelry even further into the mainstream.

The delineation between fine and fashion jewelry continues today, but the boundaries are becoming blurred. Manufacturers are combining raw materials to create hybrid pieces. Jewelry retailers are broadening their inventory to entice a wider selection of consumers.

Companies like Tiffany & Co. have introduced fashion jewelry lines in an effort to remain competitive with this ever-evolving jewelry market. There has also been significant growth in the number of retailers offering moderately priced fine jewelry. Fashion jewelry costing thousands of dollars is also readily available.

JEWELRY’S GLITTERING FUTURE

Consumer demand for jewelry has historically held fast through financial ups and downs. The innate desire for beauty and pleasure keeps consumers reaching for their wallets to acquire items that satisfy their need for self-expression and emotional gratification.

Tiffany & Co

Tiffany & Co

Understanding that basic human needs won’t change, the jewelry industry is poised to enjoy continued growth. Annual global sales of $165 billion are expected to reach $280 billion by 2020, according to McKinsey & Company. The United States alone achieved over $78 billion in jewelry and watch sales in 2014, and jewelry sales outpaced inflation, most other retail sectors, and the US economy in the preceding year.

McKinsey expects the jewelry industry’s continued growth and dynamic evolution to be fueled by both innovation and changing consumer behavior. Five key trends will influence the growth of the jewelry sector in the coming years.

Brand Globalization – The jewelry industry today is quite localized, with the ten largest jewelry groups maintaining only twelve percent of the global market. Of these, only Tiffany & Co. and Cartier are ranked as top global brands. It is expected that by 2020, many regional or national brands will gain global recognition through acquisitions and consolidation.

Branded Jewelry – While branded jewelry accounts for only twenty percent of the overall jewelry market, industry experts predict that it will grow to forty percent by 2020. This growth will be fueled by three types of consumers – “new money,” “emerging market,” and “aspirationals.” These consumers share one key trait – they embrace branded jewelry as a means to establish their status in the world. Consumers around the globe increasingly prefer branded products and services and jewelry is no exception.

From Cradle to Grave

Realigned Sales Channels – While fashion jewelry is often purchased online, purchasers of fine jewelry still prefer to do so in a traditional bricks and mortar environment, reflecting the sensory nature of the transaction. Yet even if the final sale will likely occur in a store, digital media presents an excellent opportunity for retailers to provide information, solidify brand identity and build customer relationships, especially among millennials – the fastestgrowing consumer segment.

Hybrid Consumption – Consumers have shown a desire to regularly cross the boundary separating fine and fashion jewelry. This is evidenced by the high and low ends of the market enjoying growth, while the middle remains stagnant. Fine jewelry manufacturers are already taking advantage of this trend by introducing lower-priced items as an entry point to the brand for aspirational consumers.

Fast Jewelry – The concept of fast fashion – turning catwalk looks into affordable clothing for the masses seemingly before the model has left the runway – has been a staple in the apparel industry for years. That trend is quickly making its way to the fashion jewelry market. Jewelry manufacturers are reacting quickly to trends and reducing the product-development cycle in an effort to satisfy the demands of aspirational consumers.

Regardless of how the jewelry industry continues to evolve, there is no denying that it will grow. The basic human need for self-expression will continue to drive demand for everything from heirloom-quality engagement rings to sterling silver charm bracelets and everything in between. Jewelry is, and will always be, a Consumer Alpha product.

PERSONALIZED PLEASURE

Consumers love jewelry that tells a story. No single item does this better than charms – whether showcased solo on a necklace or clustered together on a bracelet.

Recognizing the consumer’s penchant for storytelling through jewelry, manufacturers at all price points have embraced and capitalized on this trend. Companies such as Pandora captured the hearts and pocketbooks of consumers around the globe with a seemingly limitless offering of modestly priced bracelets and charms. The formula has worked. Pandora has grown from a family-run jewelry shop in Copenhagen to an international brand boasting stores in more than 90 countries across six continents.

Loquet Jewelry

Loquet Jewelry

Fine jewelry retailers like Tiffany & Co. also recognized this movement, and developed their own line of charms and bracelets to satisfy more diverse clientele. Depending on taste and budget, brand-conscious consumers can choose anything from a simple sterling silver heart charm ($75) to a Jean Schlumberger-designed bird charm bedecked with gemstones and diamonds ($8,250). All pieces, of course, come in Tiffany’s signature blue packaging. Sprinkled among these global brands are boutique offerings like London-based Loquet, which provides a more personalized approach. Crafted from precious metals, birthstones and diamonds, Loquet provides an interchangeable system of lockets and charms that allow the wearer to add or remove charms to tell a new story every day.

Company founder Sheherazade Goldsmith partnered with longtime friend Laura Bailey to take a contemporary approach to the age-old idea of a keepsake locket. “Pandora may have brought charms to the mainstream,” Goldsmith says, “but charms have always been popular.”

Loquet also embraces technology to bring their products to today’s tech savvy consumer. Visitors to the Loquet website enjoy an interactive experience where they can design a personalized locket or bracelet, and then share the finished creation with others via email. “I want the customer to be her own designer and to tell her story through bespoke design,” Goldsmith explains.

WEARABLE TECH

Light years beyond more traditional offerings is the emerging world of technology-integrated jewelry. Established jewelry houses and start-ups are embracing the challenge of designing jewelry and watches that appeal to both the wearer’s technology needs and aesthetic desires.

Kovert Jewelry

Kovert Jewelry

Luxury companies like Bvlgari, Tag Heuer, and Frederique Constant all have their own versions of smart watches either already on the market or in the final stages of development. While these items don’t provide the same full-scale functionality of an Apple watch, they do offer a more stylish package that combines technology with a recognized and trusted brand. This combination satisfies all needs of the wearer.

Beyond the realm of smart watches, an entirely new category of jewelry – targeted mainly at women – is also set to emerge. Innovative start-ups such as Ringly and Kovert are developing wearable items that seamlessly merge form and function to create rings, necklaces and bracelets that are not easily identifiable as “smart” jewelry. This idea resonates with consumers who want to stay connected, but are unwilling to sacrifice aesthetic beauty and self-expression for technology.

Kate Unsworth, CEO of Kovert, believes that with the abundance of connectivity available today, it is difficult – if not impossible – for people to ever take a digital time out. “Kovert is a tech company designed to inspire people to live more mindfully in the digital age,” Unsworth says. She collaborated with engineers and designers to come up with Altruis – a stylish jewel-like stone that can be housed in a variety of interchangeable rings, necklaces and bracelets. The “smart” stone allows the user to download an app on their iPhone and customize notifications to the stone.

Kovert Jewelry

Kovert Jewelry

By the end of the year, the company plans to announce collaborations with a variety of fashion designers, to ensure Altruis is available in an array of fashion styles and multiple price points. “You don’t wear the same jewelry to the beach as you do to a black tie ball,” she points out. “Our goal is to make it as easy as possible for people from all walks of life to enjoy wearing our jewelry all the time.”

 

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