The analysts of the RosYuvelirExpert Agency made a traditional questionnaire survey of jewelry experts who visited the JUNWEX Petersburg 2009 Exhibition, the Economica i Vremya Weekly says. The poll blanketed 530 respondents embracing virtually every Russian province. The questions were mainly related to the results of the year passed, outlooks and specifics of jewelry sales in the crisis period.
RosYuvelirExpert tried to probe the attitude of jewelry stores to the situation and find out what kind of measures they were taking to resist the crisis. In some part their answers were predictable, and in some surprising. Forty eight percent of the surveyed companies noted they did not engage in any anti-crisis activities and this was concordant with the surveys performed before the jewelry show.
Forty three percent of respondents said the average cheque value in their stores was higher compared with the previous year. RosYuvelirExpert drew attention to eclectic evaluations of crisis influence across different Russian provinces last December and during the New Year sales this January. May it be that the different average cheque evaluations stemmed from higher ex-factory prices and appropriately higher retail?
Although it is noteworthy that estimates of retail foot traffic were also different: half of the trading representatives said it was up 18% against the last year, while the other half was sure it was down 17%. In any case, all of them appeared satisfied by the efficiency of their work in 2008 and only the lesser part of respondents pointed to a lower sales level last October and November.
According to the absolute majority of those surveyed, last December was a favorable month. The results of surveyed trading companies (over 62%) and manufacturers (74%) proved there was increased attraction to the low-end price segment as well as there was scarcity of large-size diamond jewelry pieces, including one-carat diamonds.
According to the respondents, jewelry manufacturers’ dissatisfaction with crimpled orders from their customers on the eve of New Year festivities was caused by overstocked inventories in their customers’ stores. Trading companies turning wary amid the common talk about the crisis changed their approach to choosing their assortments. They became more selective and demanding, which reflected their feeling of responsibility before their suppliers bearing a serious credit burden. One of the respondents was very clear in explaining his ground to cut payments for previous shipments from his suppliers saying: “In case of claims merchants will be ready to return unsold goods…”
Despite the crisis jewelry stores were not frigid to novelties: this was confirmed by surveys and by the number of accredited experts. Trade representatives coming to the jewelry show from Russian provinces were virtually the same in number compared with the last year. The exhibition uncovered a new layer of experts, which changed the usual content of wholesale trade by 18-20%.
The answers given to the question “Please give your evaluation of your customers’ motivation to purchase jewelry” permitted to find out for whom jewelry was bought. The prevailing behavior was to buy jewelry for oneself (55%), while those who liked purchasing jewelry pieces for gifts accounted for mere 45%.
This year, it was for the first time that jewelry merchants agreed that brands had some influence on buyers. It was indicative that the surveyed visitors confirmed the importance of this factor (about 40%). RosYuvelirExpert predicts that brands will not only continue to grow in their significance, but also will play a decisive and motivating role.
There may be clearly traced the following tendency: from November 2008 to February 2009 customers changed their preferences in choosing gem jewelry. Diamond demand increased (49%) evidently due to the advertising campaigns urging to invest in gold and diamonds. Colored gems belonging to the First Group turned out to be less popular and many thought it reasonable to choose cubic zirconia (25%), topazes and pearls (5%).
Although some domestic jewelry manufacturers decided to produce silver pieces, the survey showed that customers were still bent on gold. Nevertheless, silver jewelry sales went up compared with recent years.
On the whole across Russia, according to trade representatives, about 10% of buyers preferred jewelry pieces worth under 3,000 roubles; equally sought (around 20%) were pieces worth up to 5,000 roubles and 10,000 roubles; 15% of customers used to buy within a price segment of up to 30,000 roubles and only 6% preferred exclusive and expensive jewelry (over 50,000 roubles). Five percent of buyers paid from 30,000 to 50,000 roubles for their purchases.
Twenty four percent of sales experts said they were aware that some of the jewelry stores belonging to large networks such as 585 or Yashma-Zoloto were closed. The February survey explained it was because the discount-heavy policy got outdated and currently obtrusively offered discounts made customers ask questions about jewelry quality…
Some of the jewelry companies’ representatives thought the crisis had positive effect.
V. Martynova, Commercial Director of Zhemchuzhnoye Podvorye, said: “Trade markups went down. This opens an opportunity to occupy a broader sector on the jewelry market. The time for go-betweens is over and manufacturers have a carte blanch: they can decide what jewelry is to be made, how many pieces and at what price. It means success depends only on us. Thanks for the crisis – it gave everyone a jog and now it’s jollier to live and work!”
M. Khyshitkuyeva, a market expert of jewelry factory Shar: “In crisis it is easier to build partner relations with advertising companies. People are more polite and do their work quicker and very often cheaper than before.”
M. Skvortsova, General Manager of Kolye Esse from Surgut: “The crisis has been so far playing into the hands of those who are far from the capital. Many large jewelry networks are closing their stores thus decreasing competition on the jewelry market.”
