Luxury: Can Jewellery Continue to Outshine Fashion?

Why it is the topic trending:

• Resilience of Jewellery Market: The jewellery market has demonstrated remarkable resilience amidst a broader luxury downturn, showing modest growth while other sectors like leather goods have shrunk. This contrast makes jewellery a noteworthy and trending topic in the luxury industry.

• Shifting Consumer Preferences (Gen-Z): Younger consumers, particularly Gen-Z, are increasingly prioritizing jewellery as their first major luxury purchase, unlike previous generations who often opted for handbags. This generational shift in spending habits is significant.

• Quality and Pricing Concerns in Fashion: The article highlights growing concerns among consumers regarding the quality of fashion and leather goods, coupled with significant post-pandemic price hikes. This negative sentiment towards fashion contrasts with the more stable value perception of jewellery.

• Jewellery Nailing Luxury Values: Jewellery is perceived to be upholding the traditional values of luxury – quality, craftsmanship, and customer service – more effectively than many fashion brands currently.

• Strong Performance of Jewellery Giants: The financial results of major jewellery players like Richemont (with brands like Cartier and Van Cleef & Arpels) indicate strong sales growth, further emphasizing the category's positive trajectory.

Overview:

The luxury market is experiencing a divergence in performance, with jewellery emerging as a star performer while fashion and leather goods face headwinds. This article from BoF Professional examines the reasons behind this trend, pointing to shifting consumer preferences among Gen-Z, concerns about the quality and pricing strategies of fashion brands, and the enduring appeal of jewellery's inherent value and craftsmanship. While jewellery faces its own challenges, such as fluctuating gold prices and economic uncertainties, it appears well-positioned to continue outperforming fashion in the near future.

Detailed Findings:

• Jewellery Market Growth Amidst Luxury Downturn: In the past year, while the overall luxury market declined by 1 percent, the jewellery market still managed to grow by as much as 2 percent, reaching €31 billion ($35 billion). High jewellery performed particularly strongly.

• Shrinking Leather Goods Market: In contrast, the market for leather goods, though still much larger, shrank by about 3 percent to €78 billion.

• Restrained Price Hikes in Jewellery: Unlike many fashion brands that implemented significant post-pandemic price increases (up to 10 percent or more), jewellery giants like Cartier have been more restrained, with price hikes closer to 3 percent. This has created a perception of better value for money in jewellery.

• Quality Concerns Hurting Fashion's Value Proposition: Social media is rife with complaints about the declining quality and craftsmanship of luxury fashion items, particularly in leather goods. This negative online chatter is undermining their perceived value.

• Innovation and Accessibility in Jewellery: Jewellery has seen more innovation in designs and a wider range of price points, making it more accessible to aspirational consumers, including younger buyers.

• Growing Male Interest in Fine Jewellery: More men are purchasing fine jewellery for themselves, expanding the customer base for the category.

• Increased Women's Earning Power and Self-Purchases: The rise in women's earning power has led to more women buying jewellery for themselves, rather than waiting for it as a gift. This is boosting the market across different price points.

• Jewellery Brands Investing in Local Marketing: Some jewellery brands are focusing on hyper-local marketing initiatives to connect with customers on a more personal level.

• Challenges from Rising Gold Prices: The price of gold, a key raw material for jewellery, has risen significantly, which could put pressure on profit margins. However, brands are exploring alternative materials like platinum, silver, and colourful gemstones.

• Softer Demand in the Chinese Market: While the Chinese market continues to be a concern for luxury overall, the jewellery sector has been less affected compared to fashion and watches.

• Potential Impact of US Tariffs: Fluctuating tariffs, particularly those threatened by former US president Donald Trump, pose a risk to European jewellery brands selling in the US.

Key success factors of product (trend):

• Perceived Value: Jewellery is increasingly seen as offering a better price-to-value tradeoff compared to some fashion items, especially given the significant price hikes in fashion.

• Enduring Quality and Craftsmanship: Jewellery continues to be associated with high quality and skilled craftsmanship, which resonates with luxury consumers.

• Innovation and Variety: The jewellery market is offering more diverse and innovative designs across different price points, attracting a wider range of consumers.

• Emotional Significance and Longevity: Jewellery often holds emotional value and is seen as a lasting investment or heirloom.

• Accessibility at Different Price Points: While high jewellery performs well, there's also accessibility for aspirational buyers through lower-priced items.

Key Takeaway:

Jewellery is currently outperforming fashion in the luxury market due to a combination of factors including more restrained pricing, a stronger perception of quality and craftsmanship, greater innovation, and shifting consumer preferences, particularly among younger generations.

Main Trend:

The main trend is the Ascendance of Fine Jewellery as the leading category in the luxury market, surpassing the growth and appeal of traditional frontrunners like fashion and leather goods.

Description of the trend (please name it):

Ascendance of Fine Jewellery: This trend signifies a notable shift in the luxury landscape where fine jewellery is gaining prominence and market share at a faster rate than other luxury categories. This trend is characterized by increased consumer interest, particularly from Gen-Z, a more resilient market performance despite economic headwinds, and a stronger perception of value and quality compared to some fashion segments.

What is consumer motivation:

• Seeking Enduring Value and Investment: Consumers may view fine jewellery as a more stable investment and a lasting possession compared to fashion items that can quickly go out of style or face quality degradation.

• Desire for Tangible Quality and Craftsmanship: In an era of fast fashion and concerns about declining quality in some luxury sectors, the inherent craftsmanship and material quality of fine jewellery hold strong appeal.

• Emotional Connection and Personal Expression: Jewellery often carries sentimental value, marking significant life events or serving as a form of personal expression and identity.

• Accessibility for Aspirational Buyers: The availability of jewellery at various price points allows a broader range of consumers, including younger generations, to enter the luxury market through this category.

• Less Susceptible to Trend Cycles: While there are trends in jewellery, classic pieces tend to hold their appeal longer than many fashion items, offering a sense of timelessness.

What is driving trend:

• Post-Pandemic Price Hikes in Fashion: The aggressive price increases implemented by many fashion brands have made their products seem less "worth it" to consumers, pushing them towards categories with more stable pricing.

• Quality Concerns in Fashion and Leather Goods: Viral social media content highlighting the declining quality of some luxury fashion items is damaging consumer trust and value perception.

• Innovation and Design Variety in Jewellery: The jewellery market is offering more creative and diverse designs, including options at lower price points, attracting new customer segments.

• Increased Spending Power of Women and Self-Gifting: With rising earning power, women are increasingly purchasing jewellery for themselves, driving demand.

• Growing Male Interest in Jewellery: The expansion of the customer base to include more male self-purchasers is contributing to the growth of the jewellery market.

What is motivation beyond the trend:

• Seeking Status and Aspiration: Luxury purchases, including jewellery, often serve as symbols of status and aspiration. For some, jewellery may now represent a more attainable or desirable form of expressing these aspirations compared to increasingly expensive and potentially lower-quality fashion items.

• Desire for Timelessness and Heirloom Potential: Unlike fleeting fashion trends, fine jewellery is often seen as something that can be passed down through generations, holding sentimental and potentially monetary value over time.

• Sense of Security and Investment in Tangible Assets: In times of economic uncertainty, some consumers may prefer to invest in tangible luxury assets like jewellery, which can hold or potentially increase in value.

Description of consumers article is referring to:

The article primarily refers to aspirational luxury consumers, with a particular focus on Millennials and Gen-Z.

• Who are they: These consumers are individuals who aspire to own luxury goods and are often making significant purchasing decisions in this market. They are influenced by factors like price, quality, brand reputation, and social trends.

• What kind of products they like: They are interested in high-end goods across categories like handbags, clothing, shoes, and jewellery. However, the article highlights a shift where Gen-Z is showing a stronger initial preference for jewellery over handbags, potentially due to perceived value and longevity.

• What is their age: The article specifically mentions Millennials as having historically favored handbags and Gen-Z as increasingly leaning towards jewellery. This suggests the primary consumer groups in focus are roughly in the 18-40 age range.

• What is their gender: While traditionally luxury consumers have been predominantly female, the article notes a growing interest in fine jewellery among men, indicating an expanding gender base for this category.

• What is their income: These are likely individuals with disposable income to spend on luxury goods, though the article also mentions the appeal of lower-priced jewellery options to "aspirational consumers," suggesting a range within the affluent bracket.

• What is their lifestyle: Their lifestyle likely involves an appreciation for quality, craftsmanship, and brands with strong heritage and reputation. They are likely to be influenced by social media and online trends, as seen in the discussion of viral TikToks and online chatter.

• What are their category article is referring shopping preferences: They are shown to be discerning shoppers who pay attention to price-to-value ratios and are influenced by perceptions of quality. Gen-Z's preference for buying handbags secondhand suggests a more pragmatic approach to certain luxury goods, while their inclination towards new jewellery indicates a different set of priorities for this category.

• Are they low, occasional or frequent category shoppers: These are likely to be occasional to frequent shoppers of luxury goods, making significant purchases when they feel the value aligns with the price and their aspirations.

• What are their general shopping preferences-how they shop products, shopping motivations: They are motivated by factors like status, personal style, quality, and increasingly, perceived value for money. They are also influenced by social trends and brand reputation.

Conclusions:

The article concludes that jewellery is currently outperforming fashion in the luxury market and is likely to continue this trend. This is attributed to jewellery maintaining a better perception of value, quality, and craftsmanship compared to fashion, which has faced issues with price hikes and declining quality. The shift in consumer preferences, particularly among younger generations who are prioritizing jewellery for their first major luxury purchase, further solidifies this outlook. While challenges like rising material costs and economic uncertainties exist, the underlying strength and appeal of jewellery position it as the shining star of the luxury sector.

Implications for brands:

• Jewellery Brands: Should capitalize on the current positive sentiment by continuing to focus on quality, craftsmanship, and innovation in design. Maintaining reasonable price increases, as exemplified by Cartier, can further strengthen their value proposition. Investing in hyper-local marketing to connect with consumers on a personal level is also beneficial. Exploring alternative materials and colourful gemstones can help mitigate the impact of rising gold prices.

• Fashion and Leather Goods Brands: Need to address the growing consumer concerns regarding quality and justify their pricing strategies. Creative fatigue should be tackled by fostering more ingenuity in designs. Learning from the more restrained pricing approach of jewellery brands could help regain consumer trust and market share. Paying attention to online feedback and addressing quality issues is crucial to restore brand reputation.

Implication for society:

• Potential Shift in Luxury Spending Habits: Society may witness a longer-term shift in how consumers allocate their luxury spending, with a greater emphasis on jewellery as a more enduring and valuable category.

• Increased Focus on Craftsmanship and Quality: The concerns raised about fashion quality might lead to a broader societal appreciation for well-crafted and durable goods, potentially influencing consumer choices beyond luxury.

• Changing Perceptions of Status and Aspiration: The traditional association of handbags as the entry point to luxury might evolve, with jewellery gaining prominence as a key status symbol, especially among younger generations.

Implications for consumers:

• Greater Emphasis on Value for Money: Consumers are likely to be more discerning about their luxury purchases, prioritizing items that offer a strong sense of value and quality relative to their price.

• Increased Interest in Fine Jewellery: Consumers, particularly younger demographics and men, may find fine jewellery more appealing as a first or significant luxury purchase.

• More Critical Evaluation of Fashion Quality: Consumers may become more critical of the quality of luxury fashion items and more vocal about their concerns, potentially influencing brand behavior.

Implication for Future:

• Jewellery Could Solidify its Position as the Leading Luxury Category: If current trends continue, fine jewellery could become the dominant force in the luxury market, shaping its future direction.

• Potential for Innovation in Jewellery Materials and Design: The need to navigate rising gold prices could spur further innovation in the use of alternative materials and the creation of unique designs in jewellery.

• Increased Scrutiny on Luxury Brand Pricing and Quality: Consumers are likely to continue demanding transparency and justification for pricing in the luxury sector, pushing brands to maintain high quality standards.

Consumer Trend (name, detailed description):

• Value-Driven Luxury: This trend describes consumers, particularly in the luxury market, making purchasing decisions based on a careful assessment of the perceived value of a product in relation to its price. This includes considering factors like quality, craftsmanship, durability, brand reputation, and the longevity of the item's appeal.

Consumer Sub Trend (name, detailed description):

• Gen-Z's Jewellery Focus: This sub-trend highlights the increasing preference of Gen-Z consumers for investing in fine jewellery as their entry into the luxury market, often prioritizing it over traditional first luxury purchases like handbags, driven by factors such as perceived lasting value and personal expression.

Big Social Trend (name, detailed description):

• The Quest for Authenticity and Quality: In a world saturated with mass-produced goods, there is a growing societal trend towards valuing authenticity, craftsmanship, and enduring quality, particularly in high-end purchases. Consumers are increasingly seeking products that represent genuine artistry and are built to last.

Worldwide Social Trend (name, detailed description):

• Shifting Luxury Consumption Patterns: Globally, the patterns of luxury consumption are evolving, influenced by economic factors, generational preferences, and regional market dynamics. The rise of jewellery's prominence over fashion reflects a broader shift in what consumers prioritize within the luxury space.

Social Drive (name, detailed description):

• The Desire for Enduring Assets and Investments: Beyond immediate gratification, a key social drive in luxury consumption is the desire to acquire assets that hold value over time, both financially and emotionally. Fine jewellery, with its inherent material value and potential for longevity, aligns with this drive.

Learnings for brands to use in 2025:

• Focus on core values: Luxury brands, across all categories, need to consistently deliver on the fundamental promises of quality, craftsmanship, and exceptional customer service to maintain consumer trust.

• Manage pricing strategically: Brands should be cautious with aggressive price hikes and ensure that pricing aligns with perceived value, especially in comparison to competitor categories.

• Listen to consumer feedback (especially online): Social media platforms provide valuable insights into consumer perceptions of quality and value. Brands should actively monitor and respond to these concerns.

• Invest in innovation and design variety: Continuously refreshing product offerings with new and appealing designs can attract new customers and maintain relevance.

• Highlight enduring qualities: Emphasize the longevity, craftsmanship, and potential investment value of luxury goods, particularly in categories like jewellery.

Strategy Recommendations for brands to follow in 2025:

• Conduct thorough value assessments: Understand how consumers perceive the price-to-value ratio of their products compared to competitors and alternative luxury categories.

• Reinforce quality control measures: Implement and communicate stringent quality control processes to reassure consumers about the craftsmanship of their goods.

• Engage with consumers on perceived value: Address concerns about pricing and quality transparently and proactively through marketing and customer service efforts.

• Foster creative renewal: Encourage innovation in design and product development to avoid creative fatigue and maintain consumer interest.

• Consider category-specific strategies: Fashion brands might explore offering more enduring, classic pieces while jewellery brands can continue to innovate in accessible luxury segments.

Final sentence (key concept) describing main trend from article (which is a summary of all trends specified), and what brands & companies should do in 2025 to benefit from trend and how to do it.

The prevailing trend of jewellery outshining fashion in luxury sales underscores a consumer prioritization of lasting value and quality over fleeting trends, compelling brands in 2025 to re-evaluate their pricing and production strategies to align with these evolving preferences and ensure they are delivering products that resonate with consumers' desire for both tangible worth and emotional connection.

Final Note:

• Core Trend:

  • Jewellery's Market Dominance: Fine jewellery is emerging as the most resilient and high-performing sector within the luxury market, surpassing the growth of fashion and leather goods.

• Core Strategy:

  • Value-Centric Branding: Luxury brands must prioritize and effectively communicate the value proposition of their products, emphasizing quality, craftsmanship, and enduring appeal to resonate with increasingly discerning consumers.

• Core Industry Trend:

  • Luxury Market Divergence: The luxury market is experiencing a split in performance, with some categories thriving while others face challenges, necessitating a nuanced and adaptive approach for brands.

• Core Consumer Motivation:

  • Seeking Enduring Worth: Consumers are increasingly motivated by the desire for luxury goods that offer lasting value, both in terms of material quality and emotional significance, influencing their purchasing decisions across different categories.

Final Conclusion:

The shift in the luxury market, with jewellery currently taking the lead, reflects a deeper change in consumer priorities. The emphasis on lasting value, quality craftsmanship, and a more restrained approach to pricing in the jewellery sector is resonating with consumers in a way that some segments of the fashion industry are currently struggling to match. For luxury brands across the board, understanding and responding to this consumer demand for enduring worth will be crucial for navigating the market in 2025 and beyond.

Core Trend Detailed:

The overarching core trend is Jewellery's Market Dominance. This signifies that within the luxury sector, fine jewellery is currently exhibiting stronger growth and greater resilience compared to other traditional categories like fashion and leather goods. This isn't just a temporary fluctuation but appears to be a more sustained shift in consumer preference and spending within the high-end market.

Key Characteristics of the Core trend:

• Outperforming Fashion: The most significant characteristic is the direct comparison showing jewellery sales growing while leather goods sales are shrinking.

• Resilience Amidst Downturn: Jewellery has demonstrated an ability to maintain growth even when the broader luxury market is experiencing a slowdown.

• Strong Performance of Key Players: Major jewellery brands are reporting significant sales increases, indicating a robust demand for their products.

• Shifting Generational Preferences: Younger consumers are increasingly prioritizing jewellery over other luxury items for their initial significant purchases.

• Perceived Value and Quality: Consumers seem to have a stronger sense of the value and inherent quality associated with fine jewellery compared to some fashion items.

Market and Cultural Signals Supporting the Trend:

• Post-Pandemic Inflation and Price Sensitivity: Consumers are becoming more aware of price hikes and are evaluating the value they receive for their money more critically.

• Social Media Influence on Perceived Quality: Viral content highlighting quality issues in fashion items can quickly shape consumer perceptions.

• Growing Appreciation for Craftsmanship: In an era of mass production, there's a renewed appreciation for items that are perceived as well-made and long-lasting.

• Jewellery as a Tangible Asset: Fine jewellery can be seen as a more enduring and potentially valuable asset compared to some other luxury goods.

• Cultural Shift Towards Personal Expression: Jewellery offers a strong avenue for personal expression and can carry sentimental value, aligning with a growing desire for individuality.

How the Trend Is Changing Consumer Behavior:

• Gen-Z Prioritizing Jewellery First: Younger consumers are entering the luxury market through jewellery purchases, altering the traditional path of starting with handbags.

• Consumers Questioning Fashion Value: Shoppers are becoming more critical of the price-to-value ratio of fashion items, especially in light of reported quality issues.

• Potential for Increased Spending on Jewellery: If the perception of value continues to favor jewellery, consumers might allocate a larger portion of their luxury budget to this category.

• Second-Hand Market for Fashion: The willingness of Gen-Z to buy handbags secondhand while opting for new jewellery suggests a different valuation and purchase intent for these categories.

Implications Across the Ecosystem:

• For Brands and CPGs:

  • Jewellery Focus: Brands in the jewellery sector should leverage this momentum by continuing to invest in quality, design, and marketing.

  • Fashion Re-evaluation: Fashion brands need to address quality concerns and potentially reconsider pricing strategies to regain consumer trust and competitiveness.

• For Retailers:

  • Inventory Adjustment: Retailers should consider adjusting their inventory to reflect the increasing demand for jewellery and potentially moderating orders for leather goods.

  • Marketing Shift: Marketing efforts might need to emphasize the enduring value and craftsmanship of jewellery more prominently.

• For Consumers:

  • Potentially Higher Spending on Jewellery: Consumers may find themselves spending more on jewellery as their preferred luxury item.

  • Greater Scrutiny of Fashion Purchases: Consumers are likely to be more critical and demanding regarding the quality and pricing of fashion goods.

Strategic Forecast:

• Continued Jewellery Outperformance: The trend of jewellery outpacing fashion is likely to persist in the near term, driven by the factors outlined in the article.

• Increased Competition in the Jewellery Market: The growing interest in jewellery could lead to increased competition among brands in this sector.

• Potential for a Fashion Industry Response: Fashion brands will likely need to adapt to the changing consumer preferences and address the concerns that are driving consumers towards jewellery.

• Stable or Moderate Price Increases in Jewellery: If jewellery brands continue their current strategy of more restrained price hikes, it will further solidify their value proposition.

Final Thought (summary):

The luxury market in 2025 is witnessing a significant power shift with fine jewellery taking center stage, driven by its perceived value, enduring quality, and appeal to a new generation of luxury consumers, while fashion grapples with pricing and quality concerns, indicating a need for strategic adjustments across the luxury ecosystem to align with these evolving consumer priorities.

Source: https://www.businessoffashion.com/articles/professional/can-jewellery-continue-to-outshine-fashion/