Five Challenges Facing the Jewellery Business in the UK

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Five Challenges Facing the Jewellery Business in the UK

Jewellery in the UK is big business. In 2020,  UK customers spent around £6.55 billion on clocks, jewellery and watches – and the industry as a whole in this country is valued at around £3.3 billion.

Despite the impressive size of this sector, however, it’s had to weather a range of economic storms over the past few years. Lockdowns have dissuaded many from investing money in jewellery, for one thing; if you’re not going out, then it doesn’t make much sense to dress up. And the future might hold even more gruelling challenges.

What are the challenges facing the jewellery business?

Let’s take a look at big challenges, and how UK jewellers might rise to meet them – even during tough economic times.

1. Inflation

The word that’s dominating most medium-term economic forecasts is inflation. We’re getting a lot of it. The Bank of England’s Monetary Policy Report for august 2022 forecasts a rate of 13%, driven in large part by high energy prices. This is a problem that all retailers, including jewellers, will need to grapple with. However, luxury goods are more vulnerable during times of economic uncertainty. When most consumers are faced with rising costs, the first thing they do is reign in spending on frivolous luxury items. That’s bad news for those selling jewellery.

2. Cash flow

Five Challenges Facing the Jewellery Business in the UK - Cash flow

If a business doesn’t have enough cash flow, then it might struggle to operate on a day-to-day basis. Suppliers and staff need to be paid, and customers need to be charged – this is a particular problem where items are being offered on credit. In serious cases, cash-flow problems can lead to financial and legal difficulties, which might require the business to be restructured or wound down.

3. Inventory management

When different retailers use separate systems to manage their orders and inventory, an incomplete picture of the total supply results. This means problems with overstock and shortages. Businesses might mitigate these problems by investing in inventory and logistics systems.

4. Staff retention

Staff retention

Bringing onboard best person as staff is crucial, and so too is retaining them in the long term. It takes time to bring a new worker up to speed with the technical and technological aspects of the job, and so keeping the experienced workers around is critical.

5. Customer retention

A good loyalty scheme will go a long way toward incentivising your customers into making purchases in the future and recommending a jeweller to friends and family. But we shouldn’t neglect the positive impact that the quality of products and services can have on the business’s reputation.

Be bold!

In the fashion industry, it pays to be forward-thinking. This goes especially for small-trading jewellers, who often need to find a way around the high prices of classic materials like gold and diamonds. Developing products which look appealing while making use of cheaper materials might make a huge difference to the profitability of your business.