In the run-up to the New Year almost all jewelry networks promised discounts for their goods to attract customers to their stores. Russian Information Agency RosYuvelirExpert compared offerings of various stores to find out how the networks are winning over their clients.
According to the agency, ADAMAS, a jewelry chain retailer, launched an action under the slogan “Buy at ex-factory wholesale prices.” The Moscow Jewelry Plant gearing up to the New Year festivities kicked off an action called “Give and take gifts!” offering to customers buying diamond jewelry gift certificates ranging from 1000 to10000 roubles depending on their purchase amount. However, the Platinum network stores promised only diamonds at a manufacturer’s price.
Other networks and single stores on the eve of the New Year were loud to announce their lowered prices. The 585 jewelry network invited people to its stores promising 70-percent discounts. This kind of offering was surpassed only by Altyn, which lured clients by 80-percent discounts. As usual, Yashma dropped its prices by 50 percent and Zolotoye Sobraniye offered 30-percent discounted jewelry.
Old-line networks in Saint Petersburg preferred to say nothing about great discounts. All the company boutiques of Russkiye Samotsvety announced a 10-percent discount for all their product range and 15-percent discount for diamond jewelry manufactured by the company, all valid in the period from the 1st to the 25th of December 2008. The customers whose purchase exceeded 10 000 roubles were offered a gift.
Kristall Mechty may be singled out from other Russian jewelry companies active in the advertising policy. This jewelry house cooperates with the First TV Channel in Russia and places its ads in the Moskovsky Komsomolets and Komsomolskaya Pravda dailies. A distinguishing feature in its promotion campaign is that it owns a jewelry factory, Yakutskiye Brillianty. For the New Year festivities Kristall Mechty devised an action sloganned “Open Days of Yakutskiye Brillianty.” As was reported, from December 25 to 31, 2008 all the jewelry boutiques of Kristall Mechty offered a system of New Year discounts for all the jewelry pieces produced by Yakutskiye Brillianty: “Initially you are given a 50-percent discount from the original price and then the remaining price will be again cut down by 10 percent,” said the advertising poster. “But this is not all. Those having a discount card issued by Kristall Mechty will be offered a further card-due price reduction.”
However, the first jewelry sales results of the pre-New Year season say that Russian customers were left unmoved by this campaign. The most obvious example may be found in the results of the “Exclusive 2008” Jewelry Trade Show in Rostov-on-Don (December 17-21). As has been already said, there is just no other similar event, which could match it in any way from the point of view of the amount of promotion matter distributed last November and December in Russia. There was a whole row of advertising highlights in provincial issues of major Russian mass media. The event was positioned as an “anti-crisis show” offering anti-crisis goods (gold, diamonds and furs) at unbelievably low prices. Yashma-Zoloto promised to raffle off a car among the customers of its boutiques at the closing day of the exhibition.
But all this brought nothing more than a drop in jewelry demand, according to the participants of the exhibition. The Gorod N, a Rostov-on-Don daily, told that some of them were talking about a 70-percent decrease in sales pointing to two reasons – a market glut and the financial crisis.
Zolotoye Yabloko, a Kostroma-based company, registered a 70-percent slump in jewelry sales in the November-December period of 2008. To back up its business, the company’s management decided to change 30 percent of the assortment introducing the so-called light jewelry – pendants, charms and chains designed for young people and priced in the range of up to 1000 roubles. One lot of such jewelry was put on sale and it turned out that the cheaper jewelry segment attracted more demand.
Yashma-Zoloto believes it is unreasonable to place one’s stake on a single jewelry segment selling only expensive or only cheap goods. In the opinion of the company’s spokespersons, to achieve a stable operation it is important that a jewelry boutique was able to please the tastes and satisfy financial capacities of any clients.
Almaz-Holding, a Moscow-based jewelry manufacturer, on the contrary, prefers to stake on classic design only. “The current market is overstocked with imported goods tailored according to Western fashion trends and looking more like bijouterie than real jewelry. But tomorrow this vogue will be replaced by something else. Whereas our jewelry pieces featuring classic designs habitual to the eye will be worn at all times,” believes Alexei Massauti, Almaz-Holding Sales Department Manager.
The last December has not gained usual sales records for retail companies operating in Novosibirsk, the Vedomosty-Sibir Daily says. Jewelry and luxury retailers suffered a bitter disappointment. The Imperator luxury boutique saw its sales crimple thrice as much compared with December 2007 with the average check sliding down 30 percent, says Olga Sityayeva, the boutique owner, without giving any figures. Jewelry sales also went down three times, echos Vitaly Vitukhin, General Manager of the Adalit Jewelry Factory, recalling that as a rule the 30th of December used to be the best selling day in a year. Adalit owns five sales outlets in Novosibirsk and on the 30th of December the best sale proceeds registered downtown amounted to mere 150 000 roubles, whereas one year ago the figure was 360 000 roubles, Vitukhin says.
According to the Kommersant-Nizhni Novgorod Daily, the retailers of Nizhni Novgorod say their pre-New Year sale proceeds suffered a marked dropdown compared with one year ago. Thus, the Cronos-Premium Company (owning such boutiques as “Classics,” “Montblanc” and others) explained that averagely the incoming proceeds had curtailed 50 percent to the plan. The Milo Group (owning the “Milo Premium Plaza” Boutique and others) estimated the jewelry sales drop against their planned results at 30 percent taking into account the price growth. This year analysts forecast further decrease in buying activity.
