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Tuesday, 28 June 2022

USA: A Great Opportunity to Play In

USA: A Great Opportunity to Play In

The jewellery market is increasingly divided between branded and unbranded with a growth forecast for branded jewellery compared to unbranded of +8-12% by 2025. «The consolidation of a brand in a market depends very much on its ability to take advantage of the excellent momentum that that market is undergoing, like the US market, which is super attractive, and has an expanding economic cycle that offers new companies, such as the French company Messika, enormous opportunities for growth.»

So, who wins in a market as complex, diverse and extensive as the USA? «The winners will always be those brands that do B2C online and those who are able to intercept the desires of the younger generation, who will buy if they see a design aspect and a sustainable approach in the product. Because, while on the one hand they are less and less attracted by stone, on the other, they are still looking for a product with a fashion content.»

What should Italian brands focus on then? «It is very difficult for made-in-Italy jewellery to compete in this market. In general, they should try to target the public with a cool soul, with a sustainable approach and get onto the most vital distribution channels. Therefore, to be successful and convincing, small brands need to have a strong hold on the customer, a celebrity endorsement or make ethicality its mission. Launch a provocation.

How does a craftsman selling his own workmanship think he can make himself stand out? You need creativity and experimentation. Making a beautiful pavé of diamonds no longer distinguishes you if you don't have that something that gets you into that niche of creatives that opens doors. Consumers no longer buy by looking at the weight of the gold, they are looking for personalization and disintermediation, through co-creation initiatives, for example. If the Italian is smart and manages to use his aesthetic sense, the US can be a great opportunity to play in.

The ingredients are there, but let's not forget that you are also an easily replaceable commodity.» McKinsey estimates that the post-pandemic recovery for high-end will not be the same for all geographic areas. The “Consumer demand recovery and the lasting impacts of Covid-19” report, drafted in March 2021 by the McKinsey Global Institute, states that the USA is expected to grow much faster than other markets in favor of luxury spending, thanks to the income resilience of younger and middle-aged generations, whose jobs were less impacted by the pandemic.

To be precise, branded jewellery is estimated to grow 4-7% by 2025 in the US market compared to 2019 and go from a market share of 13% to 18-22%. In terms of retail value, the "ultra-luxury jewellery" segment – items over USD 36,000 - will grow from 4% to 8%; "luxury jewellery" - pieces from USD 1,801 to USD 36,000 - from 6% to 10%; while "premium jewellery" - with a price range of USD 360 to USD 1,800 - is expected to grow from 4% to 8%.

Federica Frosini, Editor in chief VO+

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