Branded jewellery is no longer a novelty on Australian jewellery retailers’ shelves. In fact it seems that branded jewellery, once disdained by so many in the industry, is dominating the majority of window displays around the country.
The question it seems for most jewellers is no longer “Should I stock branded jewellery?” but “Which brand(s)?”
Joshua Zarb, the general manager of Leading Edge Jewellery, says the buying group’s 150 retail stores stock a wide array of brands (including Pandora, Thomas Sabo, Georgini, Tuskc, Najo, Ice Watches and Tresor Paris) to suit their individual needs, localities and demographics.
“Some of the brands will have a lifespan and retailers will have the ability to make money ‘whilst the iron is hot’ but the majority of the brands available will form part of the overall business.”
He says retailers should look for brands that suit their store’s image and target market.
“Brands are not just products – their success will ultimately be dictated by the working relationship between the retailer and supply partner.”
Yes, it seems that despite the hype surrounding the arrival of branded jewellery there definitely isn’t a ‘one-size-fits-all’ strategy for the jewellery industry.
Brands, like jewellery, are an individual preference.
Therefore Jewellery World decided to speak to three independent jewellery store owners, chosen at ‘random’, to discuss their experiences with various brands in the last few years to gain an insight into how brands are reshaping the industry.
Sydney success
The first, Trent McKean is the owner of Harbourside Jewellers in Sydney’s Darling Harbour and Asimi Jewels in Double Bay.
He stocks numerous jewellery brands including Gucci, Calvin Klein, Pandora and Najo in his Habourside store and DKNY, Swarovski, Amellee, J Lili, Diesel and Ikecho Pearls in his Double Bay store.
Although a relative newcomer to the world of branded jewellery, McKean is an enthusiastic convert.
When he opened the Harbourside store 20 years ago he stocked it with opal jewellery and Swiss watches to cater for the tourist market but changing demographics in recent times have meant that he has had to change the product mix to appeal to the local population – and for that branded jewellery has proved critical.
“I don’t think we really made a conscious decision to sell branded jewellery,” he says.
“We just needed to change our jewellery mix and we were already doing watch brands so when the watch companies introduced their jewellery lines we took them on.”
Today, branded jewellery represents “at least half of the store’s jewellery investment” and makes up a similar portion of the stock in Asimi, which opened its doors for trading just 12 months ago.
“I didn’t hesitate to stock branded product in the new store,” says McKean, “as we had already gained experience working with brands in Harbourside and knew how popular they were in attracting customers.
“We believe in brands.”
He cites several factors for his positive view of branded jewellery including national advertising and marketing strategies and presentation and packaging materials.
“Good brands really do a lot of work for the retailer – for us they’re really one-stop-shops in that they’ve done all the homework and know what the market is asking for and then supply not only the product but everything we need to sell it as well.”
McKean also believes that jewellery brands, like their watch counterparts, are an excellent tool for “positioning” a store and thus attracting the right customers.
“If you picture three jewellery stores next to each other and one has Gucci jewellery in the window, while the next one has Najo and the third has Ellani I would say you would immediately think the first store was the most expensive, the second was mid-priced and the third was bargain basement…
“Our Harbourside store was looking too intimidating as we had a massive selection of Tag Heuer and other Swiss watches on display so the introduction of brands like Calvin Klein, Najo and Pandora helped bring in a lot of people who normally wouldn’t come in.”
He says that although many jewellers might think that such affordable brands are not worth it as their sales don’t generate “a lot of dollars” the customers they attract can often be upsold to other items.
“For example sometimes when women come into the store with their husband to buy a Pandora bead the husband will start looking at our watches while waiting for her to choose.”
Nonetheless despite McKean’s obvious enthusiasm for brands he is quick to point out there are disadvantages as well – particularly margins.
“As branded products all have a RRP there is much less flexibility to set your own margins as prices are so easily comparable.
“In addition potential customers can go on the internet to buy the same product at a cheaper price from a local online retailer (who doesn’t have the same overheads) or an overseas retailer (who has a lower set RRP).”
Yet despite such challenges, McKean plans to stock his stores with even more brands in the future.
“We do mix the branded merchandise with non-branded merchandise but the branded merchandise far outsells the non-branded,” he says.
Melbourne might
Trewarne Fine Jewellery, a fourth generation family business that has been operating in Melbourne since 1932, is another convinced that branded jewellery is critical to success in today’s market.
Now consisting of four stores located in Chadstone, Southland, South Melbourne and Templestowe, the company prospered without any branded jewellery on its shelves until about 10 years ago when the retailer took on Hearts on Fire diamonds and diamond jewellery.
Managing director Travis Trewarne says that at the time the company had seen the emergence of the branded jewellery trend overseas and knew it would inevitably arrive in Australia.
“We saw the jewellery brand trend developing at BaselWorld where watch brands and fashion brands were launching their own jewellery lines, and we saw it on the streets throughout Europe, but especially in Italy, where family-owned jewellery stores only stocked brands.
“I was enthusiastic about the trend to branded products but had to take into account the position of the market in Australia,” he says.
“There was no point putting in a brand if it had no marketing promotion or any level of awareness because people wouldn’t pay the premium price or be that interested in it.”
The company certainly encountered a few hurdles when it became only the second retailer in Australia to stock Hearts on Fire diamonds and diamond jewellery in 2001.
“It didn’t go well because no one knew the brand,” he says.
“We provided extensive staff training so the staff could convey the benefits of the brand to our customers but the initial reaction was still not positive. Although they were used to buying branded clothing they didn’t understand the concept of buying branded jewellery.
Ultimately, “it took about four years” for the brand to get established in the store.
Today the company stocks a number of brands including Hermitage Diamonds, Pandora, Ole Lynggaard, Kenzo, One of One and Canix jewellery.
According to Trewarne, introducing these brands was much easier as “we had our head around how to launch a brand” and clients had become familiar with branded jewellery.
Nonetheless Trewarne, like McKean, is aware of the pitfalls that can surround branded jewellery.
“One of the biggest downsides of selling branded jewellery is the loss of your store identity and the uniqueness of your products,” he explains.
“If you’re selling rings manufactured by a branded manufacturer then your hallmarks are not in them so there’s nothing stopping your customer buying the same rings from another outlet.
“Branded jewellery also puts price pressure on you because now the customer can compare ‘apples with apples’ like they do in the watch market.”
However, despite such price pressures Trewarne is committed to increasing the branded presence in his stores.
Branded jewellery currently makes up about 50 percent of the stock in the four stores, but Trewarne is confident that figure will increase to “around 90 percent” in the next five years.
“Only a lack of time is stopping our move to more brands,” he says.
Perth power
The Jewellery Gallery on Hay in inner-city Perth, which began stocking brands almost as soon as it began trading in 2006, is also eager to add further brands to its collection.
Co-owner Helen Brown said she and her business partner, Christine Ezekiel, originally had no intentions to stock brands as they were focused on filling the shop with their own designs “but when Pandora came along a couple of months after we opened we decided to give it a try”.
“Luckily it was a massive success for us and completely changed our attitude towards branded jewellery.”
Now, just five years later the store stocks its own designs as well as Najo, Ellani, Misaki, Pearls in the City, Pastiche and Pretty Pink jewellery.
However the store no longer stocks Pandora as it was one of the approximately 100 retailers whose accounts Pandora closed down early last year.
Despite the abrupt end to the business relationship, Brown readily acknowledges that “Pandora changed our store – and the whole industry”.
“Pandora really changed the way people buy jewellery,” she says.
“Before the arrival of Pandora people did buy some jewellery brands like Tiffany’s but it was largely an untapped market but now, largely thanks to Pandora, people are happy to buy brands at all price-points.”
Although somewhat reluctant to admit that she “likes” branding in the jewellery industry, Brown says that she, like all jewellery store owners, “has to follow the cheese”.
“The whole industry is moving into branding more and more. If you don’t use branding then I think you run the risk of being left behind and becoming just another old-fashioned jewellery shop.
“The marketing that brands offer drives customers into jewellery stores and most definitely makes a big difference to a small shop like ours which doesn’t have a large budget for advertising.
“The brand does it all for you – they advertise in magazines, put your name as a stockist on their website and provide you with brochures.
“Branding is the future.”
Currently two thirds of the stock in The Jewellery Gallery on Hay is branded and Brown expects that figure to increase even further in the next few years, even though she, like her Sydney and Melbourne counterparts, is well aware of the potential downsides.
“The worst scenario you can have when selling branded jewellery is a supplier who tries to dictate how you should set up and run your shop,” she says.
“Sometimes they need to be reminded that their jewellery is their brand and that your store is your brand.”
But, she stresses, that the potential advantages far outweigh the potential disadvantages.
“Without brands I think it would be very hard to get noticed,” she says.
“If you don’t have a brand you’ve got to offer something a little bit different to the client to stand out in the crowd.
“If you’re not holding a brand then what are you offering? And how are you ever going to market it?”
Zarb concludes that branded products now form a key part of a well-run jewellery store but stresses it is important to remember that the number one brand that should be promoted above all others is the ‘retail store itself’.
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