“When you hit turbulence when flying, you fly higher to get above it. That’s what jewelers should do now in this economy: Aim higher, for the luxury market,” said John Clarkin, national sales director of W magazine, keynote speaker at the Wednesday breakfast session of the JCK Luxury and Premiere shows.
Despite “tough macro economic conditions,” he noted, the luxury market continues to grow—up 11 percent in the past four years and projected to grow 50 percent in the next five, to $75 trillion worldwide. Of that, the United States claims $27 billion, making it the world’s largest luxury market.
About 2 percent of the U.S. population—those with household incomes of $250,000 or more—control 28 percent of all income in the United States. “The best opportunities for jewelers lie in targeting those $250,000 households,” Clarkin said.
Clarkin, whose presentation was titled “Connecting with the Luxury Consumer,” presented the results of a new W magazine study of those affluent U.S. citizens’ spending on watches and jewelry. Among the findings:
On average, women in $250,000-plus households spend $3,369 on watches, and men spend $2,343. One-third of the women (31 percent) expect to buy a watch in the next six months.
Sixty-two percent of respondents will likely buy a jewelry brand they know, while 88 percent will buy a watch brand they know, indicating the importance of brands.
While brand and design are equally important to women in buying watches, design is most important in buying jewelry.
Affluent consumers “buy everywhere,” from high-end national retailers to local jewelry stores to Web sites of brick-and-mortar stores (10 percent) and those of Internet retailers (6 percent).
Clarkin gave his audience of about 350 people some tips for reaching the affluent in these unsettled economic times.
1. “Aggressive competition wins in tough economic times,” he said. Increasing adverting can increase sales. “Keep your foot on the gas in marketing, especially in the luxury area.”
2. “Create excitement with new, exclusive, and limited edition products.”
3. “Romance your best customers. Practice CRM (customer relationship management) with your very best ones.” That means special events, services, and experiences offered only to them, in addition to cultivating good customer relations.
4. “Market watches to women.” Clarkin listed at least 18 major, prestigious brands that are targeting the woman watch buyer. W magazine’s study, he noted, found that affluent women own, on average, three dress watches, two sport watches, and three casual watches—and they plan to buy more. The watch brands “know the power of the self-purchasing woman in this market,” Clarkin said. “It’s growing, and they don’t see it stopping anytime soon, regardless of the economic situation.”