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Jewellery and Watches Retailing - UK - September 2016

“The jewellery and watches market in 2016 has been boosted by an increase in spend from overseas visitors taking advantage of the favourable exchange rates. There have been continued strong sales of watches and resilient demand for precious metal jewellery, yet the costume jewellery segment remains weak.”

– Alice Goody, Retail Analyst

This report looks at the following areas:

  • How has the jewellery and watches market fared?
  • How is the smartwatches market developing?
  • How might Brexit have an impact on the jewellery and watches market?

Looking ahead we forecast that the market will continue to perform well as gifting drives demand for jewellery and watches, along with self-purchases among young consumers. While the fashion watches category may suffer as a result of the rising demand for smartwatches among the young, weddings and engagements will continue to be a reliable source of sales in the precious metal jewellery segment.

This Report examines the UK jewellery and watches retailing market for men and women aged 16 and over. The Report covers:

  • Precious metal jewellery ie jewellery made with precious metals such as gold, silver, platinum, palladium, titanium etc.
  • Costume jewellery ie jewellery made from non-precious metals.
  • Watches, including mechanical watches powered by means of a mainspring which is either wound up manually or, in an automatic watch, by the rotor being constantly actuated by the motion of the wearer’s arm; quartz movement watches powered by a battery-driven electrical pulse that brings the quartz into oscillation, which then controls the stepping motor, driving the watch. This group also includes battery-less quartz watches which use light or the wearer’s movements to run; and a third type that combines a quartz movement with micro-mechanics for additional features.
  • Smartwatches – a wrist-worn device that uses wearable technology and shows notifications from a smartphone.

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • Market to grow by 2.3% in 2016
            • Figure 1: Best- and worst-case forecast value sales of jewellery and watches, 2011-21
          • Brexit could result in slower growth
            • Gold hallmarking on the increase
              • Aurum Group among the strongest players
                • Figure 2: Leading jewellery specialists’ compound annual growth rate (CAGR) in net revenues, 2011-14/15*
              • Rolex stands out for trust
                • Figure 3: Brand personality – Micro image, June 2016
              • Gifting drives jewellery purchases
                • Figure 4: Purchasing of jewellery and watches, July 2016
              • Watches top consumers’ future purchasing intentions
                • Figure 5: Purchasing intentions for jewellery and watches, July 2016
              • Over four in ten have bought online
                • Figure 6: Where precious metal jewellery and watches were purchased in the last 5 years, in-store or online by retailer, July 2016
              • Older men shop around for the best priced jewellery
                • Figure 7: Attitudes towards precious metal jewellery and watches, July 2016
              • Monitoring health and fitness is biggest attraction of smartwatches
                • Figure 8: Reasons for considering a smartwatch purchase, July 2016
              • Majority (60%) of consumers not considering a smartwatch purchase
                • Figure 9: Reasons for not considering a smartwatch purchase, July 2016
              • Gold jewellery is viewed as timeless but lacks fashion appeal
                • Figure 10: Correspondence analysis, July 2016
              • What we think
              • Issues and insights

                • How has the jewellery and watches market fared?
                  • The facts
                    • The implications
                      • How is the smartwatches market developing?
                        • The facts
                          • The implications
                            • How might Brexit have an impact on the jewellery and watches market?
                              • The facts
                                • The implications
                                • The Market – What You Need to Know

                                  • Market to grow by 2.3% in 2016
                                    • Brexit could result in slower growth
                                      • Consumer finances remain stable for now
                                        • Gold and silver prices begin to rise in 2016
                                          • Gold hallmarking on the increase
                                          • Market Size and Forecast

                                            • Market to grow by 2.3% in 2016
                                              • Figure 11: Value sales of watches and jewellery, at current and constant prices, 2011-21
                                            • Jewellery and watch sales to reach £6bn by 2021
                                              • Figure 12: Best- and worst-case forecast value sales of jewellery and watches, 2011-21
                                            • Forecast methodology
                                              • The impact of the EU referendum vote
                                                • Jewellery and watches market was flat following the recession
                                                  • Figure 13: Alternative market scenarios for the post-Brexit jewellery and watches market, at current prices, 2016-21
                                                  • Figure 14: Detailed post-Brexit scenarios for the jewellery and watches market, at current prices, 2016-21
                                                • Value growth in the market may slow
                                                  • Weaker Pound could boost tourist spend in the UK
                                                    • Pandora was a relatively small player during the post-recession years
                                                    • Market Segmentation

                                                      • Precious metal jewellery retains demand
                                                          • Figure 15: UK retail value sales of jewellery and watches, by sector, 2011-16
                                                        • Watch sales grow 4.9%
                                                        • Market Drivers

                                                          • Gold and silver prices begin to rise in 2016
                                                            • Figure 16: Average yearly prices of gold, platinum and palladium, in dollars, 2002-16
                                                            • Figure 17: Average yearly prices of silver, in dollars 2002-16
                                                          • Gold hallmarking on the increase
                                                            • Figure 18: % change in number of items hallmarked, by precious metal type, 2014-15
                                                            • Figure 19: Number of gold and silver items hallmarked, 2007-16
                                                          • Swiss watch exports to the UK rise 13.4% in July
                                                            • Figure 20: Share of all COSC certificates accounted for, by leading Swiss-watch brands, 2014-15
                                                            • Figure 21: Number of Swiss watch certificates issued by the COSC, 2014-15
                                                            • Figure 22: Number of Swiss watch certificates issued by the COSC, three leading brands, 2011-15
                                                          • Consumer confidence dips post-Brexit
                                                            • Population trends point to rise in male 25-44s
                                                              • Surprise decline in marriages in 2013
                                                                • Current smartwatch ownership levels remain low
                                                                  • Figure 23: Ownership of smartphones and smartwatches, September 2015 and April 2016
                                                                • US tourists spend the most in the UK
                                                                  • Figure 24: % change of inbound tourism to the UK, by world region, for the rolling 12 months June 15-May 2016 compared with June 14-May 15
                                                              • The Consumer – What You Need to Know

                                                                • Silver jewellery retains its popularity among women
                                                                  • Consumers most likely to be considering a watch purchase
                                                                    • Over four in ten have bought online
                                                                      • Pandora attracts the most precious metal jewellery shoppers
                                                                        • Argos caters for less affluent buyers
                                                                          • Older men shop around for the best priced jewellery
                                                                            • Style of a watch prevails over function among under-45s
                                                                              • Four in ten would consider buying a smartwatch
                                                                                • Gold jewellery is viewed as timeless but lacks fashion appeal
                                                                                • Purchasing of Jewellery and Watches

                                                                                  • Self-purchasing prevails for watches
                                                                                    • Figure 25: Purchasing of jewellery and watches, July 2016
                                                                                  • Silver jewellery favoured by women
                                                                                    • Figure 26: Purchasing of precious metal jewellery in the last five years – Women, July 2016
                                                                                  • Men opt for gold as much as silver
                                                                                    • Figure 27: Purchasing of precious metal jewellery in the last five years – Men, July 2016
                                                                                  • Costume jewellery a popular self-purchase
                                                                                    • Figure 28: Purchasing of costume jewellery in the last five years, by gender, July 2016
                                                                                  • Watch self-purchasing peaks among young men
                                                                                    • Figure 29: Purchasing of watches in the last five years – Men, July 2016
                                                                                  • Fashionable smartwatches set to boost women’s buying levels
                                                                                    • Figure 30: Purchasing of watches in the last five years – Women, July 2016
                                                                                  • Repertoire of jewellery and watch purchases
                                                                                    • Figure 31: Repertoire of jewellery and watch purchases, July 2016
                                                                                • Future Purchasing Intentions

                                                                                  • 12% planning a watch purchase in the coming months
                                                                                    • Figure 32: Purchasing intentions for jewellery and watches, July 2016
                                                                                  • Almost a quarter of young women look to buy costume jewellery
                                                                                    • Figure 33: Women that are considering purchasing jewellery or watches in the next 6 months, by age, July 2016
                                                                                  • Platinum tops young men’s priority list for jewellery
                                                                                    • Figure 34: Men that are considering purchasing jewellery or watches in the next 6 months, by age, July 2016
                                                                                • Where They Shop

                                                                                  • Over four in ten have bought online
                                                                                      • Figure 35: Where precious metal jewellery and watches were purchased in the last 5 years, in-store or online, July 2016
                                                                                    • High street jewellery chains favoured by men
                                                                                      • Figure 36: Where precious metal jewellery and watches were purchased in the last 5 years, in-store or online by retailer, July 2016
                                                                                    • Argos caters for the less affluent jewellery and watch buyers
                                                                                      • Figure 37: Where precious metal jewellery was purchased in the last 5 years, in-store or online, by socio-economic group, July 2016
                                                                                    • Pandora attracts the most precious metal jewellery shoppers
                                                                                      • Figure 38: Where precious metal jewellery was purchased in the last 5 years, in-store or online, by age, July 2016
                                                                                    • Young, affluent watch buyers opt for high street chains
                                                                                      • Figure 39: Where watches were purchased in the last 5 years, in-store or online, by demographics, July 2016
                                                                                    • Increased activity from online-only watch retailers
                                                                                      • Majority of consumers just use one retailer
                                                                                        • Figure 40: Repertoire of retailers used for buying precious metal jewellery and watches, July 2016
                                                                                    • Attitudes towards Precious Metal Jewellery

                                                                                      • Older men shop around for the best priced jewellery
                                                                                        • Figure 41: Attitudes towards precious metal jewellery, July 2016
                                                                                      • Layering jewellery trend encourages self-purchases
                                                                                          • Figure 42: Attitudes towards precious metal jewellery, by age, July 2016
                                                                                        • Opportunity for ethical ranges targeted towards young men
                                                                                          • Figure 43: Those who would prefer to buy precious metal jewellery that they know has been ethically sourced, by socio-economic group, July 2016
                                                                                      • Attitudes towards Watches

                                                                                        • Style prevails over function among under-45s
                                                                                            • Figure 44: Attitudes towards watches, July 2016
                                                                                            • Figure 45: Preference towards style/appearance or function of a watch, by gender and age, July 2016
                                                                                          • Older consumers not as concerned with specialist watch brands
                                                                                            • Second hand watches attractive to young buyers
                                                                                              • Demand for personalised watches
                                                                                              • Interest in Smartwatches

                                                                                                  • Figure 46: Future purchasing intentions for smartwatches, among those that have bought a watch in the last five years, July 2016
                                                                                                • Why are consumers interested in smartwatches?
                                                                                                  • Figure 47: Reasons for considering a smartwatch purchase, July 2016
                                                                                                • Barriers to smartwatch sales
                                                                                                  • Figure 48: Reasons for not considering a smartwatch purchase, July 2016
                                                                                              • Associations with Gold, Silver and Costume Jewellery

                                                                                                • Gold jewellery is viewed as timeless but lacks fashion appeal
                                                                                                  • Silver jewellery offers everyday wearability
                                                                                                    • Figure 49: Correspondence Analysis, July 2016
                                                                                                  • Costume jewellery is the most fashionable option
                                                                                                  • Companies and Brands – What You Need to Know

                                                                                                    • Pandora is the fastest growing retailer over five years
                                                                                                      • Online watch retailers tap into pre-owned watch demand
                                                                                                        • Michael Kors enters the smartwatch market
                                                                                                          • Advertising spend boosted by Apple
                                                                                                            • New campaign strategy for Tiffany
                                                                                                            • Retail Competitor Analysis

                                                                                                              • Leading specialists: Compound annual growth rates
                                                                                                                • Figure 50: Leading jewellery specialists’ compound annual growth rate (CAGR) in net revenues, 2011-14/15*
                                                                                                              • Leading specialists: Revenues
                                                                                                                • Figure 51: Leading specialists’ revenues, 2011-15
                                                                                                              • Leading specialists: Outlet numbers
                                                                                                                • Figure 52: Leading specialists’ outlet numbers, 2011/12-15/16
                                                                                                              • Leading specialists: Sales per outlet
                                                                                                                • Figure 53: Leading specialists’ sales per outlet, 2013/14*
                                                                                                            • Launch Activity and Innovation

                                                                                                              • Jewellery
                                                                                                                • Harrods’ caters for bespoke jewellery demand
                                                                                                                  • John Lewis teams up with local jewellers
                                                                                                                    • Online service improved by video chat function…
                                                                                                                      • …while other jewellers opt for WhatsApp communication
                                                                                                                        • Liz Earle enters Fairtrade jewellery market
                                                                                                                          • ‘Singles Bar’ lets shoppers mix and match earrings
                                                                                                                            • Wearable jewellery
                                                                                                                              • Watches
                                                                                                                                • Online watch retailers tap into pre-owned watch demand
                                                                                                                                  • Harrods hosts six-week Fine Watch takeover
                                                                                                                                    • Olivia Burton launches vegan-friendly watches
                                                                                                                                      • Michael Kors enters the smartwatch market
                                                                                                                                      • Advertising and Marketing Activity

                                                                                                                                        • Advertising spend boosted by Apple
                                                                                                                                          • Figure 54: Total above-the line, online display and direct mail advertising expenditure on jewellery and watches, 2012-15
                                                                                                                                        • Pandora ramps up advertising spend
                                                                                                                                          • Figure 55: Total above-the line, online display and direct mail advertising expenditure on jewellery and watches, by advertiser, 2012-2015
                                                                                                                                        • New campaign strategy for Tiffany
                                                                                                                                          • Growth in television advertisements
                                                                                                                                            • Figure 56: Total above-the line, online display and direct mail advertising expenditure on jewellery and watches, by media type, 2015
                                                                                                                                            • Figure 57: Total above-the line, online display and direct mail advertising expenditure on jewellery and watches, by media type, 2012-15
                                                                                                                                          • Nielsen Ad Intel coverage
                                                                                                                                          • Brand Research

                                                                                                                                              • What you need to know
                                                                                                                                                • Brand map
                                                                                                                                                  • Figure 58: Attitudes towards and usage of selected brands, June 2016
                                                                                                                                                • Key brand metrics
                                                                                                                                                  • Figure 59: Key metrics for selected brands, June 2016
                                                                                                                                                • Brand attitudes: Pandora expresses the wearer’s personality
                                                                                                                                                  • Figure 60: Attitudes, by brand, June 2016
                                                                                                                                                • Brand personality: Rolex stands out for exclusivity
                                                                                                                                                  • Figure 61: Brand personality – Macro image, June 2016
                                                                                                                                                • Swatch is a practical choice, offering durability and comfort
                                                                                                                                                  • Figure 62: Brand personality – Micro image, June 2016
                                                                                                                                                • Brand analysis
                                                                                                                                                  • Pandora is a trend-setter
                                                                                                                                                    • Figure 63: User profile of Pandora, June 2016
                                                                                                                                                  • Rolex garners the highest levels of trust
                                                                                                                                                    • Figure 64: User profile of Rolex, June 2016
                                                                                                                                                  • Swarovski enjoys vibrant and engaging associations
                                                                                                                                                    • Figure 65: User profile of Swarovski, June 2016
                                                                                                                                                  • Michael Kors increases awareness
                                                                                                                                                    • Figure 66: User profile of Michael Kors, June 2016
                                                                                                                                                  • Tiffany & Co works on its ‘cool’ factor
                                                                                                                                                    • Figure 67: User profile of Tiffany & Co, June 2016
                                                                                                                                                  • Swatch is a cool and urban brand
                                                                                                                                                    • Figure 68: User profile of Swatch, June 2016
                                                                                                                                                  • Thomas Sabo needs to increase exposure
                                                                                                                                                    • Figure 69: User profile of Thomas Sabo, June 2016
                                                                                                                                                • Company Profiles

                                                                                                                                                  • Aurum Group Ltd
                                                                                                                                                    • What we think
                                                                                                                                                      • Background
                                                                                                                                                        • Company performance
                                                                                                                                                          • Figure 70: Aurum*: Group financial performance, 2010/11-2014/15
                                                                                                                                                          • Figure 71: Aurum: Outlet data, 2010/11-2014/15
                                                                                                                                                        • Retail offering
                                                                                                                                                          • Casio Electronics Co. Ltd
                                                                                                                                                            • What we think
                                                                                                                                                              • Background
                                                                                                                                                                • Company performance
                                                                                                                                                                  • Retail offering
                                                                                                                                                                    • Signet Group (UK)
                                                                                                                                                                      • What we think
                                                                                                                                                                        • Background
                                                                                                                                                                          • Company performance
                                                                                                                                                                            • Figure 72: Signet Group (UK): Group financial performance, 2011/12-2015/16
                                                                                                                                                                            • Figure 73: Signet Group (UK): Outlet data, 2011/12-2015/16
                                                                                                                                                                          • Retail offering
                                                                                                                                                                            • Swarovski UK Ltd
                                                                                                                                                                              • What we think
                                                                                                                                                                                • Background
                                                                                                                                                                                  • Company performance
                                                                                                                                                                                    • Retail offering
                                                                                                                                                                                      • The Swatch Group (UK) Ltd
                                                                                                                                                                                        • What we think
                                                                                                                                                                                          • Background
                                                                                                                                                                                            • Company performance
                                                                                                                                                                                              • Retail offering
                                                                                                                                                                                                • Tiffany & Co Ltd
                                                                                                                                                                                                  • What we think
                                                                                                                                                                                                    • Background
                                                                                                                                                                                                      • Company performance
                                                                                                                                                                                                        • Figure 74: Tiffany & Co Ltd: Group financial performance, 2010/11-2014/15
                                                                                                                                                                                                        • Figure 75: Tiffany & Co Ltd: Outlet data, 2010/11-2014/15
                                                                                                                                                                                                      • Retail offering
                                                                                                                                                                                                        • Links of London Ltd
                                                                                                                                                                                                          • What we think
                                                                                                                                                                                                            • Reinforcing its British brand positioning
                                                                                                                                                                                                              • Boutique.Goldsmith deal offers more options for customers to shop Links of London
                                                                                                                                                                                                                • Expanding the breadth of category offering
                                                                                                                                                                                                                  • Building its presence in Asia through travel retail outlets
                                                                                                                                                                                                                    • Company background
                                                                                                                                                                                                                      • Company performance
                                                                                                                                                                                                                        • Figure 76: Links (London) Ltd: Group financial performance, 2010/11-2014/15
                                                                                                                                                                                                                        • Figure 77: Links (London) Ltd: Outlet data, 2010/11-2014/15
                                                                                                                                                                                                                      • Retail offering
                                                                                                                                                                                                                        • Pandora Jewellery UK Ltd
                                                                                                                                                                                                                          • What we think
                                                                                                                                                                                                                            • Slowly moving away from just charm bracelets
                                                                                                                                                                                                                              • Capitalising on the gift market
                                                                                                                                                                                                                                • Concept stores
                                                                                                                                                                                                                                  • Maximising online presence
                                                                                                                                                                                                                                    • Building close relationships with its customers
                                                                                                                                                                                                                                      • Customised jewellery
                                                                                                                                                                                                                                        • Company background
                                                                                                                                                                                                                                          • Company performance
                                                                                                                                                                                                                                            • Figure 78: Pandora Group: Group financial performance, 2011-2015
                                                                                                                                                                                                                                            • Figure 79: Pandora Jewellery UK Ltd: Outlet data, 2011-2015
                                                                                                                                                                                                                                          • Retail offering
                                                                                                                                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                                              • Abbreviations
                                                                                                                                                                                                                                                • Consumer research methodology
                                                                                                                                                                                                                                                • Appendix – Market Size and Forecast

                                                                                                                                                                                                                                                  • Forecast methodology
                                                                                                                                                                                                                                                  • Appendix - Correspondence Analysis

                                                                                                                                                                                                                                                    • Methodology
                                                                                                                                                                                                                                                      • Figure 80: Correspondence analysis, July 2016
                                                                                                                                                                                                                                                      • Figure 81: Jewellery & watches, July 2016

                                                                                                                                                                                                                                                  Companies Covered

                                                                                                                                                                                                                                                  To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                                                                                  Jewellery and Watches Retailing - UK - September 2016

                                                                                                                                                                                                                                                  £1,995.00 (Excl.Tax)