The Jewellery Sector

BACKGROUND

The UK Jewellery sector was valued at £5 billion last year, comprising of real jewellery, watches and costume jewellery (Keynote 2014). Globally the jewellery industry has struggled over the past five years, with declines in the price of gold and diamonds against the dollar, reducing margins for producers and lowering the overall cost of jewellery.

Diamonds are down 28% against a peak in 2014 Forbes and gold prices were at a 52 week low as of July this year (Economist). In spite of global trends the UK and the US have seen a rise in demand for gold jewellery with the UK seeing 21% increase to 3.6 tonnes (Forbes).

The industry has seen a rise in demand for costume jewellery, with consumers favouring high and low end costume jewellery over fine pieces, costing a fraction of real jewellery (Pacific Standard), and the sub sector driving over £500 million in 2013 (Professional Jeweller). As with most sectors, jewellery has been impacted by digitalisation, with online offerings proving popular, increasing competition, but also opening scope for smaller online boutiques, and niche jewellers who typically cut out the middle man, and sell direct from the maker to consumer. To see success, retailers will need to bring the experience of purchasing jewellery to online, with social media and optimised web experiences playing an important role.

More widely, there is some concern around the future of the jewellery sector, with 30% decline in demand for gold jewellery seen in India and China post-recession (Pacific Standard), and disposable income increasingly diverted towards purchases of gadgets and smartphones. Although the clock may be ticking, demand for certain items (e.g. engagement rings) is continual, and costume jewellery will continue to drive online growth.

Affiliate trends:

Looking at the affiliate channel data for the sector, we’ve seen strong growth over the past five years, with seasonal peaks pronounced around late November and Christmas shopping periods. Year on year growth currently stands at 73% in sales up until the end of November 2015.

Trends over time: The graph below indicates the monthly revenue trend for Affiliate Window’s Jewellery advertisers:

 Affiliate trends in the Jewellery Sector 2011 to 2015

Key Performance Indicators

Average Order Value (AOV)
In light of the overall industry, we’ve seen a slight decline in AOV in the affiliate channel, with £65.37 this year, up from 2014 but down from £76.16 witnessed in 2013.

Conversion rate
Conversion rates have fluctuated over the past few years, increasing to 4.35% this year from 4.27% in 2013. With conversion typically peaking around the Christmas period, this could rise further before the end of 2015.

EPC and commissions
This year we have seen traffic increase at a higher rate than commission, resulting in a slight decrease in EPC year to date, down to £0.23 in 2015 from £0.26 in 2013. Average commissions have also dropped to £5.38 from £6.11 in 2013, but are up from £4.97 last year.

Mobile Performance
Both tablet and smartphone devices have seen considerable growth in share of total sales, with tablets now accounting for 25.78% of sales (up from 19.83% in 2013), and smartphones now at 18.53% of sales (up from only 4.69% in 2013). Smartphone conversion rate is currently at 2.76% however compared with 6.46% for tablet devices.

Tools for affiliates
Typically most jewellery programmes will offer affiliates standard banner creative and text links. Some programmes also offer product feeds, various voucher codes and deals.

Affiliate mix
In the chart below, we’ve broken out the percentage of affiliate’s transactions by publisher type. Looking across the sector, we can see that cashback has seen a slight decline in share of sales at 34.11% in 2015 vs. 35.40% in 2012. Discount code sights have held a consistent share rising slightly to 32.70% of sales in 2015, vs. 32.11% in 2012. Interestingly editorial content sites have seen an increase in share of sales up to 6.79% in 2015 vs. 4.45% in 2012. The Other category has seen the highest increase in sales, which has seen the largest growth from social content and sub network publishers.

Publisher type split for jewellery advertisers

Affiliate suggestions on Affiliate Window for the Jewellery sector

Tags: sector report, jewellery

AWIN Strategy Team
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