“These are good times for sure for the U.S. luxury market, which is scorching hot,” said John Clarkin, executive director of sales development for W magazine.
Much of the boom is being driven by women self-purchasers. “There are more of them than ever,” Clarkin said. “Their number keeps increasing, and they are truly driving this luxury market.”
But, Clarkin warned, while fine-jewelry and fine-watch sales are going strong, the retailers who are most successful in selling them promote them as accessories—which have a higher appeal right now to women purchasers.
Clarkin made his comments in his keynote presentation Wednesday at the LUXURY by JCK show, which preceded The JCK Show ~ Las Vegas. He detailed today’s luxury market and presented new research gathered by W magazine in February, which focused on affluent women consumers living in households with incomes topping $100,000 annually.
He told his audience of about 300 that the United States has the largest luxury market. The number of millionaires in North American grew 6.9 percent to 2.9 million in 2005, and their total wealth is about $10.2 trillion. But he noted that, while large luxury brands’ business is booming, a record number of luxury-product retailers closed in 2006 because of pressure from online and chain-store competitors. That’s why it’s important to understand that key consumer segment: the woman self-purchaser, Clarkin said.
W magazine research finds that “Originals”—its name for affluent women who “create trends, move the market, are stylish, and are ambassadors for the brands they buy”—spend more on average on fine jewelry and watches ($24,248) than the national average for affluent “Conquerors” ($6,341). The typical “Original” owns 36 pieces of fine jewelry, and 70 percent have bought one in the previous 12 months. “The average woman fine-watch collector,” said Clarkin, owns at least three watches—casual, dress, and evening—and 25 percent of those surveyed had bought a fine watch in the previous 12 months. The typical “Original” spends an average of $4,357 on a fine watch, versus $808 for the typical affluent consumer nationally, Clarkin said.
He noted that “Originals” also “heavily influence” other people’s buying, advising, on average, 5.5 people about jewelry and 2.2 people about watches they have purchased.
The W survey finds that women still prefer stores for their purchases. “Eighty-five percent go to stores to see and touch the products,” said Clarkin. Independent retail jewelers, for example, were frequented by 46 percent of those surveyed and the neighborhood jeweler by 37 percent. But Clarkin warned that e-commerce Web sites are “gaining a foothold.” Some 18 percent of the women surveyed buy their jewelry and watches from those. “Web sites are becoming influential. We must keep our eyes on that one,” Clarkin warned.
He also told his audience of retailers, “Don’t assume a woman walking into your store isn’t for a purchase.” The W survey found 47 percent of women self-purchasers “buy jewelry on the spot” and 33 percent buy watches. Even if they don’t buy immediately, there is “a one-month window” in which they might.
But the W survey found that purchasing accessories like handbags have a higher priority (27 percent) for affluent women consumers than jewelry (18 percent) and watches (7 percent). He urged his audience to “market fine jewelry and watches like accessories, but ones with “permanent high value” and that are “generational keepsakes.”