Richemont Readings

north american luxury industry news curated by iProspect

Welcome to iProspect's Winter Newsletter

Happy New Year Everyone!

After an unplanned hiatus due to the craziness of holiday, annual planning & SIHH, I am thrilled to be back at sharing with you helpful industry and consumer insights.

This newsletter includes some of the best luxury articles/studies of the year - ones I've sourced multiple times since I've found them. Topics include luxury industry benchmarks & trends, watch/jewelry insights, consumer highlights, digital channel updates & metrics from holiday.

As always, if there is ever something we haven't covered, please let us know and we'll be sure to include it for the group in a future newsletter.


If you need any documents/articles/studies sent via Cryptshare, please reach out to me and I'll be glad to send your way.


Thank you immensely for your continued partnership.

Andrea & Team

iProspect's Client Summit: April 26-28, 2016

You should have received your save the date, and email to register for our annual client summit by now. Our theme this year is how to stay ahead in this great “Digital Revolution.” Gone are the days when digital could be just one piece of an overall strategy. It’s time to go “all in,” because the risk of doing the same old thing is far greater than the risk of rising to change. Compelling content will tackle modern digital marketing strategies, technology and big ideas, which empower brands like yours to persistently adjust and innovate to digitally meet the needs of your valuable consumers.


Our compelling content will include discussions by industry leaders and client-led Spotlights, as well as small breakout groups. We’ll also be showing you the best Las Vegas has to offer with fantastic parties, entertainment and networking events.

To say the least, you definitely don't want to miss it.


Learn more about it here: http://iprospectclientsummit.com/2016/

Agenda here: http://iprospectclientsummit.com/2016/agenda/

Register here: http://iprospectclientsummit.com/2016/register/

iProspect's Client Satisfaction Survey

We will be launching our third Client Satisfaction Survey as a way to gather candid feedback from each of you on your experience. This feedback helps us prioritize and implement beneficial improvement opportunities across our organization. The timing is:

• On Tuesday, February 9th, an email from Satrix Solutions, our third-party survey consultant, was sent to all clients to inform you about the upcoming survey.
• On Wednesday, February 10th, you should have received an email inviting you to participate in the survey. The invitation will include a link (unique for each contact) to access and complete the survey, which should take just a few minutes.
• The survey will close on Friday, March 4th, giving you nearly three weeks to complete the survey.

We greatly appreciate your participation!

-----LUXURY INDUSTRY UPDATES-----

Bain Luxury Worldwide Market Study: Fall/Winter 2015

This is the best study - inclusive of trends and an authoritative recap of metrics important to the luxury industry, inclusive of country/region, category, digital/store, retail/duty free, full prices/discount, wholesale/brand breakouts. A definite must read - must save to reference later document.

Write up here; full study here.
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2016 Luxury Predictions & Expectations

A compilation of priorities and trends important for the year ahead, pulled from three recent articles that include several industry leading opinions.

Predictions From The Experts (article here)
  1. Geographic Shifts in Wealth
  2. Millennial Growth & Their Taste for Experiences
  3. Marketing Channels Shift to Digital (Mobile!)
  4. Changing Point of Retail Trends: Borrowing vs Buying, Building Experiences, Exclusive Content/VIP Treatment, Spiritual Connections

What to Expect in 2016 (article here)
  1. User Generated Content
  2. Personalized Mobile Experiences
  3. Sustainable Products
  4. Wearables
  5. Real time Social Sharing
  6. Technology
  7. Omnichannel Movement/Digitization of Store Experience
  8. Millennials Pickiness
  9. Economic challenges (terror, oil prices, currencies)
  10. Affluent saving vs spending, spending to invest

Trends That Will Make or Break Brands in 2016 (article here)
  1. Wearable Tech
  2. Thoughtful Storytelling
  3. India's Luxury Growth
  4. The HENRYs (Experiences & Lifestyle Buying Prioritization)
  5. Sharing Economy
  6. Focus on Digital

2015 Recap: Trends & Top Awards

Another must read, encapsulating the key trends of 2015 (article here)
  1. Chinese Luxury Consumer Shifts
  2. Internet & Mobile Devices
  3. Role of Social Media in Research
  4. Essential Role of Search & The Shift to Mobile
  5. Travel Retail


A handful of Luxury Daily's Top Annual Awards (link to full list here with write-ups and best-of examples for top 3 per category)

  • Luxury Marketer of the Year: Armani
  • Luxury Retailer of the Year: Neiman Marcus
  • Luxury Publisher of the Year: Porter

-----JEWELRY & WATCH CATEGORY -----

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WWD: Watch Category Publication (in full)

A must read - from cover to cover. Includes many articles relevant to your category. If you could only read one thing from this newsletter, this is it. Includes articles about:

  • Watch Trends
  • Haute Jewelry Trends - Plating & Heating Techniques
  • Fashion Runway to Wrist
  • Bespoke Jewelry
  • China's Watch Buying Patterns are Changing
  • Celebrity Endorsements (watches)
  • Pricing Trends for Precious Metals
  • Fashion vs Apple Smartwatch
  • Shinola Focus
  • Harry Winston Focus: Premier Feathers Collection
  • Breitling Focus
  • Omega Focus (through the eyes of James Bond)
  • Giampiero Bodino Focus
  • Aurum Group Focus

Link to view WWD publication with list of included articles/charts (including the above) here, link to Dropbox download here.

Bain & Co's Global Diamond Report

The 5th annual report on the global diamond industry prepared by the Antwerp World Diamond Center (AWDC) and Bain & Company has revealed that the diamond industry suffered a similar struggle to the wider luxury industry last year.The study includes a comprehensive look at the year’s major developments along the diamond value chain, including reasons for the recent drop in rough and polished prices, key developments along the value chain and a review of recent economic fundamentals that are the long-term drivers of diamond jewelry demand and prices. Also included are the long- and short-term factors influencing prices, a YoY comparison and long-term outlook.


Quick overview of the main messages and key takeaways below:


  • In 2014 and the first half of 2015, revenue across the diamond industry value chain grew by 4% to 8% as demand has slowed in China while continuing to grow in the US.
  • The Greater China diamond jewelry market appears to be in turbulence in the short term.
  • In 2015, the diamond industry suffered the ripple effect from the mild decline in consumer demand for diamond jewelry that started in 2014 in Greater China.
  • We believe that regular circulation of diamonds through the pipeline should be restored as soon as the midmarket and retail segments clear their excess inventories.
  • Amid industry turbulence and continuing pressure on the market, mid-market companies are being forced to reevaluate their business models.
  • As in past years, the industry faces key challenges: sustaining long-term demand for diamonds in developed markets and among a new generation of consumers, and boosting demand from other sources than jewelry and aesthetic use.
  • The long-term outlook for the diamond market remains positive, with demand expected to outpace supply starting in 2019.

Bain & Co article here, full Bain & Co study in full here. Another perspective via Luxury Society here.

Christopher Ward: The Dark Horse of Luxury Watches

Mike France, co-founder of the controversial and online-only luxury watch brand Christopher Ward talks industry truths and being the sector’s ‘dark horse’, exclusively with Luxury Society.


Bursting onto the scene in June of 2005, British watchmaker Christopher Ward shook the industry by creating the world’s first online only luxury watch retailer, selling timepieces direct to the consumer.


Helmed by entrepreneurial trio Mike France, Chris Ward, and Peter Ellis, the brand has consistently pushed the boundaries of the watchmaking sector and challenged the traditional concept of luxury as a disruptor, propagating the ideals of quality and transparency over pure image and ‘gloss’, to ‘early adopters’.


Fascinating interview here

Will the Smartwatch Take Over the Traditional Watch?

Sales of smartwatches and fitness trackers could outpace those of traditional watches by 2020, according to data from research firm Mintel. The company released a slew of statistics Tuesday, citing that sales of smartwatches and fitness trackers are ticking along nicely, and that one in every five U.S. consumers said they are "very interested" in purchasing a wearable device within the next year.


Currently, one in every 20 Americans, or about 6%, own a smartwatch or fitness tracker, Mintel said. Male watch enthusiasts represent the biggest area of opportunity for the industry, since 37% of men aged 18-to-34 who have purchased a traditional watch in the past 12 months said they would be "very interested" in also purchasing a smartwatch or fitness tracker within the next year, the study found.


"There is a very real possibility that smartwatch sales could cannibalize sales of other watches over the next five years," said Diana Smith, senior research analyst, retail and apparel, Mintel. "This scenario assumes that the current smartwatch buzz manifests into sales that can withstand momentum as more functional apps are created, more developers launch new products and prices come down. An ideal situation for the smartwatch sector would be one where smartwatches lift the entire category, while traditional watches – which comprise the majority of total watch sales – remain at least steady."


About 25% of watch buyers mainly wear a watch to make a fashion statement, including 32% of "older millennials," or consumers aged 29-to-38, the study said.


Article from AdAge appears here

-----CONSUMERS-----

How the Ultra Affluent are Spending their Money (article)

The ultra-affluent — with household incomes that average $450,000 — spent $12,155 on luxuries in late summer and early fall. That’s a decrease of 21.6 percent for the roughly 3.3 million households that make up the nation’s top 2 to 3 percent.


“The universal values of conscious consumption and abhorring wastefulness, I think those things are coming back,” said consumer psychologist Kit Yarrow, professor emeritus at Golden Gate University.


Link to article (copy only) on WWD.com here, link to view WWD publication & charts here, link to Dropbox download here.
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Top 10 Global Consumer Trends for 2016

Global consumption in 2016 will see a blend of established, new and counter trends, challenging the way consumers live and shop.


From brand-agnostic and over-connected consumers to a focus on greener food and mental wellbeing, Euromonitor's recent whitepaper, Top Global Consumer Trends for 2016, analyses prevalent trends, consumer attitudes and purchasing decisions across consumer types, industries and countries.

  • Learn which consumer trends will reign in 2016
  • Uncover how consumers are searching for innovative routes to value
  • Consider future opportunities among agnostic shoppers, the over-connected, millennials, single spenders, changemakers, gender-nonconformists, the health conscious and mature consumers
  • Learn more about consumers in 2016…


Link to study here
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-----HOLIDAY RESULTS-----

Bain & Co Holiday Recap

Holiday sales were decent in aggregate but disappointing for a number of prominent retailers. Omnichannel retail sales grew 3.1% over the holiday season (November and December).

Growth skewed heavily toward e-commerce, where sales grew more than seven times faster than they did in stores (13% versus 1.7%). The need for retailers to deliver profitable growth, and to build the innovation capabilities required to do so, has never been greater.

Winning retailers will adopt a more comprehensive approach to innovating both online and in stores, aligning the organization across a common set of priorities. That approach—a systematic, repeatable and fast method for designing and developing prioritized innovation—is called Agile.

Bain & Co writeup here, link to full study here.

Custora's Holiday Recap: Mobile, E-Commerce Shopping Up

According to data from more than 200 online retailers and 500 million shoppers from Nov. 1 to Dec. 31, 2015, the holiday 2015 shopping season saw Americans turning more to e-commerce, particularly on mobile devices, for their shopping needs.

According to Custora’s analysis, holiday e-commerce revenue increased by 12.1 percent in 2015, with the number of orders increasing by 11 percent and the cost of the average order edging up by 1.1 percent. Most sales were the result of items popping up in search engines when shoppers typed in keywords. These searches made up 21.5 percent of all online sales. This was followed closely by email marketing, which led to 20 percent of online sales. Additionally, the study found that 30.4 percent of orders were placed on mobile devices.


Write up here, link to full study here.

-----iPROSPECT POVs-----

The Consumer Electronics Show (CES) 2015 Recap

Full and fantastic recap from our sister agency Isobar here
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Also, here's a recept of the highs and lows of CES 2015 via The Verge here

Full Services Update

Rather than share our PPC & Paid Social updates individually, iProspect will now be including them in one deck, but also layering in Natural Search & Display industry updates.

Please view deck here, and let your teams know if you are interested in learning more on any of these updates.

Paid Search Trends: Q4 2015

Our 2015 Q4 Paid Search Trends report reveals that mobile is officially here to stay. We started seeing trends play out in Q4, especially with click volumes in verticals like retail. As this starts happening across the market in 2016, we will enter new territory. A mobile-first strategy will be the only way to win in this ever-crowded, competitive, and at times confusing marketplace.


Also, the contextual relevance around time, place, intent, likes, and rich demographic data will propel campaigns past being faceless transactions, and toward being nurtured conversations with cultivated, specific audiences. Read our full report here to learn more.

iProspect's Annual Affluent Whitepaper: The International Business Traveler

This whitepaper continues to be ever more relevant as the global consumer continues to be a bigger part of luxury sales. However, brands are not focusing on them as much as they could. Our work highlights insightful findings on this consumer group, and helps you target them effectively.

Link to write up here; link to download paper in full here

-----YOUR iPROSPECT SENIOR TEAM-----

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