The New Year will begin with both uncertainty and optimism as we move forward with COVID-19 still a part of our lives.
Uncertainty as a second wave of COVID threatens the recovery that started in the second half of 2020; optimism as a vaccine is likely to reach all by summer.
No business has gone unscathed from the pandemic in 2020. The reliably buoyant personal luxury goods market, which includes fashion, jewelry, watches and beauty, contracted for the first time since 2009, falling by 23 percent to $257 billion, reports Bain & Company in its latest Luxury Study. This marks the largest annual decline in history for the personal luxury goods market.
Bain does not expect the market to return to 2019 levels until at least late 2022. Still in question is 2021, which is dependent on macroeconomic conditions, the evolution of COVID-19, the speed of return to travel globally, and the resilience and confidence of consumers. Still, Bain forecasts 10 percent to 19 percent growth for the personal luxury goods market in 2021.
Pro Active & Nimble
Success today and in the future is dependent on being nimble and able to adapt quickly and easily to the changing retail environment, says Jeffrey Cohen, president Citizen Watch America in New York. “It is important that independent brick and mortar retailers promote what makes them special. The longevity of their relationship with the local community, their product knowledge, and their ability to schedule individual appointments in a safe environment.”
Being proactive and ready to be reactive is undoubtedly the modus operandi for businesses that wish to succeed in the current environment, concurs Bruce Pucciarello, CEO of Novell, a subsidiary of Continental in Rahway, New Jersey. He believes 2021 will not be devastating for anyone. “Very strong for some; sustainable for others. It would be nice to see a year where we all can advance.
Also extremely bullish for a return to pre COVID numbers, is Michael Lerche, president and COO of the New York manufacturer, Goldstar. An important caveat in 2021 is to be adept at virtual selling, both B2B and B2C. Referencing The Plumb Club’s TPC-365, new proprietary virtual sales platform with BOSS logics, Lerche, who serves as president of The Plumb Club says: “We feel virtual selling will be the future, and especially for the next 12 months.”
Neil Shah of Shah Luxury, New York concurs, underscoring the importance of using all tools available to provide service and facilitate sales, including video chat, FaceTime, and email in the mix. He cites his company’s launch of a B2B Dashboard, providing one place online for retail customers to easily and quickly place and manage their orders.
Cautiously optimistic for recovery in 2021, Shah says he’s holding his breath as to what may come of a second wave of COVID transmission through the winter months. “While the expectation might be for business to drop off a bit,” he says, “it hasn’t shown signs that it will.” He believes that those who are creative and innovative, constantly and consistently, will be the ones to gain market share.
Gift Giving Strong
Expectations for product preferences in 2021 are for a continuation of current trends. Consumers are seeking jewelry with meaning, purpose, positivity, joy, and deep personal connection to who they are and what they value. Symbols of luck, love and spirituality have been among the prevailing design themes, across product categories, with no sign of waning.
More importance is placed on giving gifts with meaning or curating a personal collection that means something special during these unstable times, finds Theresa Namie, merchandise manager for the Minneapolis, Minnesota-based manufacturer, Ostbye. She says consumers want products that are well made and offers good value, and tells a meaningful story.
This trend inspired Ostbye to create its latest line in silver and 10K rose gold with diamonds, String of Love, Faith, Forever, and Celebration that manipulates the infinity symbol into various shapes to represent the sentiments. “The trend to share our stories through our gestures of postcard jewelry is a strong trend that will continue through Valentine’s Day,” Namie expects.
Bridal sales will continue to be strong in 2021. Severine Ferrari, editor and founder of Engagement 101, told The Plumb Club in November that she expects a big engagement season through the months ahead. She also anticipates couples will be spending more money on the engagement ring as people can’t travel and plan big weddings.
Bestsellers and proven styles will continue to drive sell through in 2021, believes Cohen, given the uncertainty in the world as a result of the pandemic. “Until we see life return to normal, it seems safer to stay with what is comfortable. Re-issues and anniversary models will be popular with the collectors, as brands reach into their archives for inspiration.”
Programs not products will win the day, advocates Pucciarello, who says Novell feels exceptionally good about 2021. The way forward — “products with plans and cooperative working relationships between producers and distributers, where we are respectful that we all find profit together,” he says. “That or we shrink in gross revenue as an industry.”