The watch and fine jewellery industry continues to sparkle. According to a report from McKinsey, annual global sales are expected to grow at a healthy rate of 5 to 6% each year, totaling €250bn (£213bn) by 2020. Moreover, jewellery sales in particular are growing at a faster rate than any other part of the luxury goods industry.
It’s clear that consumer appetite for jewellery is high, and this market growth can be attributed to a variety of factors. This includes the growing number of female consumers that purchase jewellery and luxury items for themselves, as well as the wealthier younger generations such as Millennials and Gen Z who are predicted to represent more than 40% of the overall luxury goods market by 2025.
The increasing demand for jewellery is also driven by the rise of digital buyers, many of which are the younger generations who are more comfortable with shopping online. In fact, McKinsey estimates that e-commerce will soon become the third-largest luxury market worldwide, after China and the United States.
With this in mind, there is clearly an increased demand from consumers shopping online for luxury and jewellery, and this is heading in a global direction. Currently, China’s jewellery market is the largest in the world, accounting for 30% of global demand. Top consuming countries for fashion jewellery include the USA, India, Japan and Hong Kong. For luxury jewellery, the USA overwhelmingly dominates as the top consumer, followed by Japan, France, China and Italy.
In order to maximise the opportunity in this global ecommerce space, it is therefore vital that jewellery brands and retailers offer international customers a seamless and localised online experience.
How to make the international online experience shine
Research shows that two-thirds of luxury shoppers engage in online research before deciding to make a purchase. The ever-growing popularity and influence of social media apps such as Instagram are also increasing customers’ awareness of jewellery brands and retailers across the world, inspiring them to find out more and to make a purchase.
It is therefore essential that jewellery brands ensure that their ecommerce platforms are compatible across all digital touchpoints, from desktop to mobile devices. China is one of the biggest markets for jewellery in the world, and mobile is also its fastest growing channel, predicted to see a compound annual growth rate of 12% over the next four years. At Global-e, our data supports this growth in global mobile ecommerce usage, showing a 40% YoY increase in the number of orders of luxury goods – which includes jewellery and watches – performed on mobile in the past year.
Ensuring that ecommerce platforms are compatible on different devices is just the first step to success. In order to maximise the opportunities in global sales, jewellery brands and retailers must also understand the international consumer – taking into account their different attitudes to shopping as well as investing in understanding local market characteristics.
For cross-border e-commerce, one size certainly does not fit all. When it comes to shipping, payment and returns preferences, brands and retailers should not limit themselves to a few options, as this can discourage shoppers since methods vary across continents. While it may be acceptable to pre-pay using a direct debit or credit card in the UK, cash on delivery is one of the most popular methods of payment in the United Arab Emirates, while German consumers prefer open invoice.
One aspect that all international consumers have in common is the desire for a hassle-free transaction, so a brand or retailer that is able to offer a range of local payment, returns and reasonable shipping choices will be more likely to attract shoppers and have a better chance at increasing loyalty.
Crystal clear fees
A final important element that should not be overlooked, are taxes and duties, which we know go hand in hand with cross-border shopping. Hidden fees can be an enormous bugbear with consumers, and can often go unnoticed until they spring up later down the line on delivery. To avoid this, merchants should be completely transparent with the consumer, calculating and presenting these costs at the point of purchase.
This way customers know exactly how much the whole process is going to cost and can then pre-pay all taxes and import duties at checkout, meaning less worry once the parcel lands, and more time to marvel at the elegant and well-crafted new item that has arrived. Our data shows that 88% of shoppers worldwide who purchased jewellery above the local import duties threshold and were offered with a prepayment option, choose to pay these fees at checkout.
Spotlight on: Astley Clarke
The British fine jewellery brand Astley Clarke, offers a great example of how a jewellery brand and retailers can capitalise on the growing cross-border opportunity. The brand offers its global consumers a seamless localised online experience. This includes showing localised content – from welcome messages to presenting prices in local currencies, checkout in various languages and local taxes and duties calculation to its wide range of payment methods and attractive shipping offering. By implementing this change, the brand’s conversion rates from international visitors increased by more than 160% and its international revenue has increased by 367%, pushing the share of international sales each week to 25-40%.
We know that the jewellery market continues to attract shoppers across the world. Fine jewellery is a special investment – it is timelessly chic and an individual item can hold a valuable meaning with the beholder, celebrating life cycles and achievements and various other memories. The purpose of jewellery hasn’t changed – but the way in which we shop for it has evolved over time.
With the global demand for jewellery online increasing, it is vital that jewellery brands and retailers invest in a slick localised online experience. Those that do this well will be able to increase international sales and conversion rates, improve international customer satisfaction, as well as increasing the chances of customer loyalty – potentially even for generations to come.
By Nir Debbi, co-founder and CRO, Global-e