September 18, 2003
BaselWorld Study Shows Luxury Marketers Refocusing on Higher End
The luxury segment of the jewelry and watch market will likely eliminate mid-range products in the future and refocus exclusively on prestige brands that emphasize exclusivity and functional (as opposed to frivolous) innovation, according to results of Trend Report 2003/2004, sponsored by BaselWorld, the annual trade fair held in Basel, Switzerland each spring.
Many prestige brands have already reduced their mid-range segments, says the report, to focus on the higher end and its traditional strengths high quality, durability, timelessness and security.
The researchers say the luxury experts they interviewed also believe mid-range, non-branded jewelry firms are likely to disappear in the next decade, giving way to branded items at higher and lower prices. Still, many retailers in the U.S. continue to report strong sales with mid-priced items and continue to sell non-branded pieces successfully.
Consumer attitudes toward luxury goods have notably changed since the September 11, 2001, attacks in the United States and now focus on more personal values and less on trendiness, says the report, which was conducted with the French research firm Ipsos. The report compiled and analyzed 20 interviews with jewelry and watch executives from major firms worldwide.
The report adds that as consumers reassess why they buy high-end products, the brands that sell these products are adjusting their marketing and product offerings in order to capitalize on their identity as a brand. Many are doing this by establishing their own retail outlets and reconfiguring their distribution, notes Valerie Chasse, deputy director of Ipsos, who presented the findings this week in New York City along with Monica Guarnaccia, BaselWorld director of marketing and communications.
In its final notes, the study reiterates that larger brands are better equipped to adopt new strategies and warns that "the market may even shift towards a simplified arena of super brands. This could bring with it the risk of less creativity and a more standardized offering."
by Michael Thompson