Vicenzaoro winter 2007 INTERVIEW WITH THE ITALIAN GOLD JEWELLERY RETAILERS FEDERATION 1. What are Italian retailers’ expectations for jewellery sales over the 2006 holiday period? “Give emotion, choose a jewel: You won’t regret it. A jewel is made to last”. These are the slogans that Italian jewellers are repeating as the end-of-year festivities approach. The hope shared by many is that it will be a Christmas without any surprises. These are the findings of a survey carried out over the last few weeks among our members. Positivity: this is the first impression that emerges from the survey that involved local associations and members of the category organisation. A ray of sunlight in a period when forecasts constantly threaten bad weather. A blast of fresh air for those businesses that manage to come up with new ideas and also emotions for their clientele, the latter perhaps showing more interest than previously in buying jewels increasingly linked to fashion and customs. No denying it, this is what emerges from the comments we gathered. The consumers’ preferences will turn towards trendy and fashion articles with a rather low price and often made from alternative materials, almost always by brands that are the best communicators of image. Long dangly earrings and charm bracelets to make wrists jangle – these are the forecasted bestsellers. A no longer timid sign of recovery from the higher bracket cannot be ignored, where a return to the jewel as a unique piece is expected, perhaps made to the client’s design or idea, but quality jewellery (well-represented in ranges) is also making a comeback. “Despite the many highs and lows and diversifications depending on geographical areas and kinds of shops”, comment local representatives led by the Federation, “we have detected an increase that leaves plenty of room for hope. It’s clear, one swallow does not make a summer, but it does fuel us with that optimism that was missing maybe in recent months due to the market’s well-known ups and downs. We have invested, albeit in small doses, in local initiatives, with the aim of re-presenting the jewel with a cultural and emotional identity. A sort of path that intends to valorise gold jewellery products. A drop in the ocean, but one which surely shows how the union of several operators can lead to the creation of initiatives, which, although not innovative, help to attract attention for our products. 2. What are the real prospects for jewellery from the retailer’s point of view? Over recent years the Italian market as a whole has shown interesting ideas for quality articles. Censis (Centre for Social studies and Policies) provided the most recent figures and among other things these confirm a tendency by an important segment of Italians to prefer quality as the central factor behind their reasons for purchase. Sociological indications from Censis (which incidentally cannot be quantified) show that Italian consumers are taking a sufficiently well-defined path. This outline should direct gold jewellery retailers towards new business organisation capable of guaranteeing that quality standards are kept high; not only in terms of product. Competitiveness is solidly based on enhancement of the price/quality ratio and above all on convincing consumers that they have parted with their money for “something that is worth it”. In general, the Italian consumer is proving to possess new sensitivity, in terms of commercial communication and purchases in general. From a recent consumer credit survey by Findomestic in March 2006, it emerged that “the family now specialises in “purchase planning”, selectively assessing no longer just the individual elements (human resources, organisation, sales areas, range of products, etc.) but the synergic combination of the same. Regions north and south, although very different, are similar in that they prefer the overall service of the sales point to its more tangible elements. Furthermore, a third communication channel is coming to the fore among the traditional channels and innovative ways of communication: “the grapevine” of the electronic era that travels from one mobile phone to the next and which creates waves of success for places, products and even sales points”. The pointers that emerge from this analysis concern, among others, two important aspects: 1) the consumer is more attentive towards lower prices and even “real” discounts; they judge lower prices and the shops offering them; they pay more attention to the role played by Internet; 2) after-sales service is becoming more important. To conclude, an increasingly wider product range must be matched by mature sales- related services. We are witnessing a shift from the “instinctive and emulative” consumer models that have characterised Italian purchases over past decades to a rational consumer who is also inclined to hedonism. Necessity and pleasure seem less contrasting than in the past and come together in specific purchase choices, not only functional ones. More reflective, but at times more confused when faced with too many stimuli, today’s consumer feels closer to quality than to price, but refuses simplistic contrasts and searches for equilibrium. Ultimately, clear information, high product quality and the possibility to compare are also factors, in the gold jewellery sector, that go to make up the theatre where new consumer models will be centre stage. This leads to a need for greater transparency in presentation of products and transactions: eliminating the doubt of risk grows consumer loyalty to gold and silver articles. 3. How much does communication (advertising, articles, etc.) for gold and jewellery affect the end user’s choice? Communication decidedly plays a fundamental role; the aim of communication is to establish a long-lasting relationship between the sales point and consumers. The gold jewellery sector has a head start as jewels themselves excite the consumer; we need to find the way to exploit this emotion in individuals to convince them to buy. The gold jewellery sector does not seem to show great expertise in the field of communication and as yet there is no definite line on what image policy should be strictly followed. This is due to the fact that the turnovers of most retail companies do not allow them to make best use of communication professionals. Companies tend not to plan advertising and promo activity in advance and not to define goals. In general the tendency is for adverts in magazines and newspaper, mainly local ones, or short-lived initiatives related to special shop displays, participation in local trade fairs or display material for the sales point. Analysis of the sample from a survey we carried out shows that retailers in general do not spend much on advertising. 45% spend less than two thousand euros a year. The preferred promotion media are advertising in magazines and/or newspapers (25%) and posters (14%), followed by sponsorship of events (12%). Suffice to think that out of a sample of 500 potential consumers we interviewed, 73% cannot remember any advertising by gold jewellery retailers. Most of the remaining 27% who said they could, when asked specified that advertising was mainly carried out during the Christmas period or for Valentine’s Day. According to 65% of those interviewed, the most frequent activity was adverts in magazines and/or newspapers, followed by posters at 27% (usually regarding discounts, moves and sales) and finally advertising on radio and tv (10%) and mailing (8%). It is therefore a fact that the jewellery market does not invest in communication, or to be more exact, it invests very little. Estimated investment for jewellery stands at around 1% of sales, against an average 10.5% for luxury products and 6% for watches. What is incoherent is that this is a product that needs to convey distinctive elements, symbols, important imagination values and emotion and yet it is only marginally supported by investment in advertising and communication. The gold jewellery sector is bound to see the same evolution that other sector have already experienced, with communication shifting increasingly towards the dimension of reaction, as we now need involvement that is also emotional and cognitive and also because today’s consumers, thanks to new technologies, are able to express their own design capacities. Hence the growing relevance of those tools that permit direct contact with the final consumer, above all sales points, but also Internet. Both, in fact, can be seen as the theatre where a brand’s strategy is staged, the setting par excellence for creating and conveying a feeling, the place where company and client meet up. In retail, in particular, it should maintain the image-service promise made in the communication: from a viewpoint of integrated communication, the showcase is a mini- poster, all the visual identity elements, the range itself, the level of professionalism, courtesy and competence of the sales personnel and even after-sales service provided reflect the brand image. Gold jewellery companies are, however, faced with two kinds of problem: on the one hand scarce control over the image conveyed through trade, which in most cases is inadequate for becoming a mass media of image strategy; on the other the difficulties of creating an imaginative world purely through jewellery, leading to the need, for all those who aspire to single-brand distribution, of expansion into related businesses that complete their world of reference. 4. What are the most popular and most requested genres and styles? Let’s talk about the concept “Jewels for everyone”. He gives her a present: in white gold, always a trendy piece set with diamonds, always a symbol of love or earrings, charm bracelets that make wrists jangle in yellow gold, which is coming back into fashion. She gives him a present, this male who is increasingly more aware of his looks and fashion: enamelled cufflinks, platinum necklaces and above all watches, large chronographs, in steel or classic with leather straps. We are truly spoilt for choice. And then, alongside the well-known jewellery names, there are the lines designed by fashion stylists, so popular with the younger set. Not to be forgotten, as we have already mentioned, the higher bracket, where there is a return to classic jewellery.
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