Breeding Brands

The jewellery buying processes are changing worldwide and more so in India as the disposable income in the hands’ of youth has increased. The youth as we all know are driven by brands and their aspirational values. Thus, diamond jewellery segment, too needs to follow suit and create brands that recognise the emotional and aspirational appeal. This article by CIBJO of Italy gives you an insight into the world of jewellery branding.

WHAT ARE BRANDS?
Your retail shop is ‘a brand’ in its own right; as a retailing brand you also have the benefit of selling other brands within your environment.

Branding is extremely important in any industry because multiple, competing brands create category excitement and bring new consumers to the market by giving them more choice and clearly differentiating product offerings. This is especially true for the jewellery and luxury goods industry.

BENEFITS OF BRANDING
Brands occupy a special place in our minds and hearts. Many brands are associated with a known and trusted set of benefits and values that satisfy our rational and emotional needs. They can help us distinguish between products, recognise the promise of an understood experience, choose and create preference, and target the people who are going to exercise that choice and preference.

The key to understanding and managing a brand is to grasp the emotional benefits and connectivity that the brand has over and above what it offers rationally. In fact, the success of a brand is more related to its emotional appeal than its rational or functional characteristics.

CUSTOMER BENEFITS OF BRANDING INCLUDE:
• Easily recognisable products
• Gauge of product quality and consistency
• Reassurance/reduces risk (as every brand has a promiseabout what the product will do for you. Strong brandswill generate certain benefits, reducing risk)
• Reduces shopping time (consumers can identifyproducts that are relevant and appealing)
• Provides cues about sources/origins (branding givesproducts more identity)
RETAILER BENEFITS OF BRANDING INCLUDE:
• Higher margins (there are generally greater margins on branded products)
• Increased product differentiation (giving your store an image of offering greater choice)
• Customer loyalty/retention (brands are built on satisfying customer’s emotional needs, so consumers will be more loyal to a brand than a generic product)
• Assists integrated marketing
• Corporate identity (brands can help to reinforce yourcorporate identity by providing a very targeted brandmessage that will also appeal to your target audience
• Legal/intellectual property

BRANDING IN THE JEWELLERY INDUSTRY
There is a revolution-taking place in the jewellery industry and it is the emergence of branding as a powerful force for the future.Jewellery brands only account for a small percentage of total retail sales. Yet, brands are just as important in generating consumer choice in the industry as they are in other luxury goods categories. Multiple, competing brands create category excitement, give consumers more choice and bring new consumers to market.

There are seven simple reasons why there is a huge opportunity for jewellery brands in the future. These are listed below:
1. The diamond jewellery industry is a big business
On a worldwide basis diamond jewellery is about the same size as the branded luxury goods industry as a whole. So a small share translates into big dollars and there is a huge, untapped opportunity for branded products. Branded diamond jewellery offerings help secure market share and increase customer loyalty.
2. The retail market is particularly fragmented
The diamond jewellery retail market is currently very fragmented, with over 300,000 retailers worldwide. Even large players account for a small percentage of total global sales. Branding offers all players an opportunity to differentiate themselves.
3. The ‘shopping experience’
Brands help to improve the shopping experience. The consumer experience of buying diamond jewellery is generally bland and outdated compared to that of other luxury goods. While there are always notable exceptions, there is a real opportunity to change the nature of the diamond purchase process. Often, displays are poorly conceived and consumers with different needs are not well segmented. Furthermore, browsing behaviour, critical to generating store traffic and desire, is not really a part of our business in the way that it is in fashion retailing.In an era where shopping is part of the fun, diamonds are a big opportunity for those who meet consumer needs in terms of the in-store experience.
4. Industry players do not spend significantly to support brands
The diamond industry is in need of companies that can bring strong value adding marketing approaches and a consumer focus. In general, the industry under invests in marketing initiatives, dedicating only around 1 per cent of sales to marketing activities.Investing smartly in the development of successful diamond jewellery brands built on defined consumer needs will serve to generate excitement around the category, drive demand for diamond jewellery and guarantee improved margins for those involved.
5. The global jewellery market is largely unbranded
Diamond jewellery brands only account for a small percentage of total diamond jewellery sales worldwide. This provides opportunity for those who can build customer brand awareness. In many ways the jewellery industry is not that different from the way that the watch industry was 25 years ago.
6. Real consumer anxiety exists in the purchase process
Buying a diamond is a frightening experience for many because it’s expensive; consumers find it hard to judge the value for themselves; purchases are usually infrequent; and consumers feel the need to deal with someone that they trust.
Consumers inherently believe well known names are more trust-worthy. If a brand is seen to be credible in the sector, it can succeed in reducing consumer anxiety. Research has suggested that this alone is worth around 20 per cent added margin to the consumer.

CONCLUSION:
Successful brands understand how to communicate the product ‘dream’ and satisfy consumer needs. They are not just focused on a differentiated product offering. They are marketing driven, invest in and prioritise innovation in design, inspire trust and confidence, and understand the importance of the retail shopping experience.