Shift in consumer preferences prompts changes in retail product mix, says World Silver Survey 2017
Marcia bracelet in silver by Georg Jensen
The silver jewellery supply chain is adapting to changing consumer preferences in industrialised countries by either shifting to more high-end products that generate higher margins or offering lower-priced items to attract a new customer base, particularly on e-commerce platforms and TV sales, said the GFMS team at Thomson Reuters.
In the World Silver Survey 2017 commissioned by the Silver Institute, Thomson Reuters GFMS said silver jewellery demand had softened across several key markets. It noted that while demand in the US grew by 12 percent in 2016 on the back of a healthier economic outlook and buoyant retail sales, demand across Europe and other industrialised nations was dampened by weak domestic economies and a drop in consumer spending. According to the report, silver jewellery demand in Europe fell by 3 percent last year.
"In such an environment, the supply chain has to adapt. This may mean offering lower-ticketed items to attract a new customer base or alternatively offering more high-end products that afford retailers higher margin to offset lower sales volumes," the World Silver Survey 2017 said.
Baroque pearl pendant in black rhodium-plated silver embellished with
coloured gemstones and gold-plated accents by Goldlip Jewellery
The report remarked that the higher margins offered by silver jewellery, compared to pieces in other precious metals, have prompted some retailers to adjust their product mix in a bid to offset a drop in footfall traffic.
Gem-set silver pieces as well as plain silver items sold under a recognised brand or fashion label tend to yield higher margins, the World Silver Survey 2017 continued. Demand has also shifted away from large bold items such as silver cuffs or oversized pendants and rings to smaller, more delicate and intricately designed jewellery styles. The latter may use less silver per piece but carry greater mark-up potential, the report added.
The bulk of production though has been in the lower end of the market as affordable silver jewellery is attractive to a wider demographic, the GFMS team at Thomson Reuters said.
Demand for this segment has been boosted by the success of e-commerce platforms and TV sales, it added, citing data from the US Census Bureau that indicated an increase of 15.1 percent in total e-commerce sales in the US in 2016 compared to the 2.9 percent growth rate for total retail sales last year.
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