Walking around Hatton Garden in London last week, the home since medieval times of the British jewelry industry, as well as town and city centers across the country, one receives a clear picture of the state of the retail jewelry in the United Kingdom. The mood is similar to that found across European countries. That mood, unfortunately, is rather morose.
A full six years since the global financial crisis struck and the deep recession that followed, it seems that Europe as a whole has not been able to move on since. The threat of a recession hangs, heavily, in the air across the continent. Deflation is also a menace as attempts to kick-start the economy of the eurozone by the European Central Bank, and by members of the wider European Union, stubbornly refuse to yield any benefits. The British economy is reportedly in better shape than that of many of its European neighbors, though you wouldn't necessarily know that from looking around its shopping areas.
The combined European economy is about the same size as that of the United States at around $13 trillion, but they appear to be heading in different directions. Annual inflation is just 0.3 percent in the eurozone, there is double-digit unemployment and economic growth in the region amounted to just 0.3 percent in the first quarter of this year.
Meanwhile, the International Monetary Fund (IMF), in its latest World Economic Outlook report, revised downwards its forecast for GDP growth for the mighty German economy for this year to just 1.3 percent from the 1.7 percent it predicted in April. And if that wasn't bad enough news, Germany itself then announced that even that figure was too high, forecasting growth of just 1.2 percent for this year and next.
The retail mood across Europe stands in sharp contrast to that in Asia, such as Mumbai, Hong Kong and Shanghai. It doesn’t necessarily mean that retail sales in those eastern markets are outstanding, but the atmosphere is a world away and that can be infectious and help create sales. Fast-moving action and excitement are on the streets and in the air. Sales did not appear to be spectacular in the region – I lost count of the number of empty jewelry stores that I looked in and walked past in Hong Kong and Shanghai last month around the time of the Hong Kong Gem and Jewellery Fair – while sales in many stores in Mumbai in July during the time of the India International Jewellery Show were also clearly not going through the roof.
However, the mood – sorry for the repetition, but it's important – was altogether different. The shops were alive, managers were marching around making changes and giving instructions to staff, the displays were sharp, the lighting was powerful, and the diamond jewelry was in your face in a sharp and distinctive way.
How different from the seemingly tired and indifferent stores seen in the past couple of months in the United Kingdom, Italy and France. There was lighting, but it was not sparkling; there were fancy displays, but they didn't shout out; there were store assistants but they seemed rather indifferent and uninterested. 'We are here if you need us' seemed to be the message.
Compare that with Hong Kong where store assistants stand on the steps and invite you to come in and take a look around. "A bit vulgar," sniffed a (European) friend. "It's like being in a market."
That may have a strong element of truth to it, and most shoppers, of course, simply walked past. But it, at least, shows that they are trying to drum up interest among consumers in jewelry. Who knows how many nervous and uncertain potential customers can be persuaded into a store – and from there to actually buy a piece of diamond jewelry? Shoppers don't always know what they want and where to buy from. An invitation from the doorway can be seen as a statement of interest in them. 'Let us help you to find what you might be looking for.'
And to be honest, it is far more inviting than a staid store in London, or elsewhere in Europe, with a firmly closed door, and staff apparently barricaded behind desks or even behind doors sipping tea and watching the clock.
Its all a matter of outlook and approach. The diamonds are there, jewelry designers make exceptional efforts to create constantly changing beautiful and exceptional items, so it's up to the retailers to make the effort to create the interest in that final meter across the threshold of their stores and to help pull demand higher in the rest of the supply chain.