I will be chairing the retail track at Seamless 2017 in April. The forum will bring together leading minds, entrepreneurs and innovators in retail, payment and E-commerce to enable business growth.
Sharing an excerpt from my interview with Seamless:
Ahead of the upcoming Seamless Asia 2017 conference, we spoke to Wong Mei Wai, Business Director of Aspial (Aspial-Lee Hwa Jewellery) about a little-discussed but incredibly important topic: How loyalty programmes work in the fine jewellery industry.
Wong says that in fine jewellery, traditional earn-and-burn, chop-and-stomp loyalty programmes don’t work, and that a less mainstream approach is required.
Are customers today really less loyal? How do your jewellery purchase habits differ from your mother’s?
I would say it depends on the product category (high or lower involvement), the segment that we are playing in and the target audience. Naturally the circumstances which most businesses operate in have changed as consumers today have many different options available. However, the super-premium and luxury brand users in our portfolio have the greatest loyalty. This is due to a multitude of reasons, including cutting-edge design differentiation, trust and superior service and experience.
Our mothers’ generation (baby boomers and the yuppies) still see jewellery as keepsakes, a symbolic part of a life journey that commemorates key milestones. Jewellery was the embellishment of simple colours like the Greeks wore on their robes. This manifested itself in careful selection of gifts of diamond, Pure Gold, Jade and Pearl representing specific significance in our lives.
In contrast Gen X and Y sees jewellery as accessories. Driven by practicality and convenience, their purchase journey is faster and well-researched on digital before hitting the stores. Unlike our mothers we keep a very open mind to the precious materials, gems and stones. We are open to considering precious and semi-precious stones, gold, silver and platinum and other gems as long as the designs are eye-catching.
On the other hand (and interestingly) there is a developing trend amongst millennials to embrace more traditional forms of jewellery – for example, in China there is the emergence of buying pure gold and diamonds as an investment despite the decline in marriages.
Explain to us the difficulty a business leader in charge of selling a high value/luxury item like fine jewellery.
While there are many opportunities for the luxury (high value) industry today, it is in a state of flux and change. Such industries include handbags/leather goods, jewellery and watches, fragrances and designer make-up and skincare. The main challenges faced are:
(a) The Luxury Purchase Equation
The Luxury industry growth has a close connection to exclusivity and prices that relates closely to income and wealth dynamics. Economic and social insecurities can threaten the growth of the industry.
(b) Buying into the Luxury dream
Whilst it is quite true that greater income leads to greater spend on luxury there are some who do not feel the need to upgrade to luxury. This can be seen in the growth of the ready-to-wear being born out of French design houses and soft accessories that challenge the thinking that good design always costs money.
(c) Balancing discounting and communication
With the above changes in the luxury industry many luxury brands have to turn to discounting, giving gifts and loyalty programs. However this vicious cycle is not to be desired especially if the brand is exclusively super premium versus accessible luxury.
(d) Lower Barriers to Communication
In addition, social media – Instagram particularly – has increased exposure to new and smaller luxury brands due to the low cost/high impact of creating brand awareness through the medium.
Hence, in recent years, luxury brands as businesses need to look at consumer needs and balance the cost of production with exclusivity, using great design brought to consumers in accessible materials.