Swarovski, Tiffany Among Top 10 in ‘Digital IQ’ in a Weak Jewelry Field

Tiffany's Engagement Ring Finder iPhone app

Two jewelry companies stand out in a ranking of the digital competence of 72 international luxury brands.

Swarovski and Tiffany ranked eighth and tenth, respectively, in the survey, “Digital IQ Index,” by L2, a membership organization of academics and industry professionals that bills itself as a think tank for digital innovation. While there were standouts in the rankings, much of the jewelry and watch industry received poor scores in the survey.

The survey measured luxury brands in the categories of “Watches & Jewelry,” “Fashion,” “Men’s Fashion,” and Shoes & Leathergoods.” The rankings are the result of measuring each company’s Internet site’s brand effectiveness, digital marketing efforts, social media presence and mobile marketing initiatives. They were ranked with a Digital IQ score and categorized in the following classes: “Genius,” “Gifted,” “Average,” “Challenged,” and “Feeble.” None of the 29 jewelry and watch brands made Genius class. The Watches & Jewelry category had the lowest score and biggest drop in the annual survey. The Fashion category had the highest overall score and the biggest overall gain.

“Amidst gray market concerns, counterfeit fears, and a general hope that ‘the whole Internet thing will go away,’ the Watch & Jewelry category appears paralyzed, posting an average IQ of just 79,” the survey notes. “Limited investment in digital and a lack of leadership have relegated them to ‘Average’ and ‘Challenged’ status in the Index.”

Swarovski (tied for eighth with Giorigo Armani) was tops in the Watches & Jewelry category with a score of 139 and receiving Gifted status. “The creation of a mobile site or application would elevate it to its Genius status,” the survey notes. Tiffany, with a score of 138 and also given the “Gifted” status, was cited for its innovative Engagement Ring Finder iPhone app, which allows users to browse the jeweler’s collection of rings according to shape, setting, metal or design.

Fabergé ranked 56 in the survey and received Average status. However, the company’s e-commerce Web site, which launched in September 2009 (part of the brand’s re-launch under its new owners, Pallinghurst Resources) received a special mention as the possible future of ultra-luxury e-retailing.

“The site’s password-protected inner sanctum preserves the boutique experience while remaining commerce-driven. Product presentation in flash is innovative; gem-encrusted baubles float in the ether of the home page, waiting to be dragged front and center,” the survey notes.

“The most unique feature of the site, however, is its customer service,” it continues. “Clients are immediately paired with a sales advisor who welcomes them and provides access to the site. Advisors are available in 11 languages, 24/7, for calls, instant messages, or video chats. Should a client want to try a piece, a viewing will be scheduled. If a purchase is made, the item will be hand-delivered. This attention to detail ensures that any Fabergé shopping experience, online or in-store, is managed to the brand’s standards. And with price points starting at $50,000, the bar is high.”

Other jewelry and watch brands that earned Gifted status with their ranking and Digital IQ score are as follows:

24. Tag Heuer (Digital IQ score 116)

25. Longines (114)

26. Hublot (113)

Jewelry and watch brands considered Average in the survey are:

34. Montblanc (104)

35. Bulgari (102)

37. Omega (101)

39 (tie). Jaeger-LeCoultre, Piaget and Van Cleef & Arpels (92)

42. David Yurman (90)

Among those considered Challenged are:

44 (tie). Cartier and Raymond Weil (89)

48. Rolex (87)

49. Movado (85)

50. Audemars Piguet (82)

54. Harry Winston (76)

55. IWC (75)

56. Fabergé (74)

Jewelry and watch brands receiving Feeble status are:

63. DeBeers (63)

64 (tie). Chopard and Vacheron Constantin (61)

66. Baccarat (56)

67. Patek Philippe (54)

69. Franck Muller (39)

70. Graff (35)

71. Bulova (32)

72. Buccellati (21)

The top seven luxury brands receiving Genius status are as follows:

1. Coach (171)

2 (tie). Ralph Lauren and Louis Vuitton (167)

4. Gucci (166)

5. Hugo Boss (157)

6. Burberry (153)

7. Dolce & Gabbana (140)

LVMH is the Best Global Luxury Brand

Despite the economic downturn, several luxury companies were able to increase the value of their brands in 2010, according to the 11th annual ranking of the "Best Global Brands," by Interbrand, a global brand consulting firm.

Among luxury brands, LVMH ranked the highest on the list at 16th, followed by Gucci (44), Hermes (69), Tiffany & Co (76), Cartier (77), Armani (95). All of these brands saw growth this year because they continued to invest “in their heritage and legendary status,” Interbrand said in a statement. “Outstanding customer service and a focus on unique in-store and online experiences allowed them to stay strong, even while consumers cut back spending.”

Burberry, which ranks 100 on the list, saw no change in its brand value this year.

For the 11th year straight, Coca-Cola retains its top spot as the number one ranked brand on the list. But the bigger story is the growth of technology brands, with IBM (2), Microsoft (3), Google (4), Intel (7), HP (10), Apple (17) and BlackBerry (54).

Apple increased brand value 37 percent “through carefully controlled messaging and an endless wave of buzz surrounding new product launches,” Interbrand said. Google saw a 36 percent increase in value over last year, “bringing the brand closer than ever to rival Microsoft.” Meanwhile, HP, despite a challenging year, “made smart additions to its product portfolio and swiftly expanded the HP brand to protect its ranking on the list. BlackBerry’s brand value grew 32 percent and it remains “the most popular smartphone for business users, despite pressure from Apple as it edges into the corporate world.”

A number of prominent brands faced extraordinary crisis in 2010 resulting in stalled growth, value loss and in the case of BP, failure to make the ranking this year. BP's environmental disaster and inability to make good on its brand promise of "Beyond Petroleum" led to it falling off of the list and helped competitor Shell emerge as an industry leader, now ranked number 81, up from number 92 in 2009. Although the Toyota (11) recall caused the brand to lose -16 percent of its brand value, its long-standing reputation for reliability, efficiency and innovation helped it weather the crisis better than expected. Goldman Sachs (37) was once the envy of Wall Street, but now faces the dichotomy of strong economic results and an angry public that will continue to lash out until the company begins to demonstrate that it is making sincere efforts to better align its ethics with its brand.

During a difficult year for the auto industry, Mercedes Benz (#12) and BMW (#15) were able to sustain and build their value through innovative design and a focus on delivering premium value vehicles with luxury features. Using customer feedback, largely drawn from YouTube, Flickr, Twitter and Facebook to launch the 2009 Fiesta, Ford (50) stands out as one of the best example of how to use social media. Award-winning products like the Q5 and rich heritage help Audi (63) lead industry growth this year with a 9% increase in its brand value.

"2010 was the beginning of a long road back towards economic recovery," said Jez Frampton, group chief executive at Interbrand. "From real-time customer feedback through social media to increased transparency about corporate citizenship, brands were faced with a profound change in the way they relate to customers and demonstrate their relevance and value. Despite this new paradigm of brand management, the advantages of building a solid brand remain the same."

In the financial sector, legacy brands Citi (40) and UBS (86) lost double-digits in brand value, while Santander (68), Barclays (74) and Credit Suisse (80) made their debut on the list for the first time. “Their ability to stay true to brand promises in unsure times, and avoidance of the subprime mortgage crisis, helped them stay the course, Interbrand said.

Interbrand publishes the ranking of the top 100 brands based by analyzing the many ways a brand touches and benefits an organization, from attracting top talent to delivering on customer expectation. Three key aspects contribute to a brand's value; the financial performance of the branded products or services, the role of a brand in the purchase-decision process and the strength of the brand to continue to secure earnings for the company.

Luxury Brands Still Bet on China

Hublot Shanghai boutique.

Despite the recent reports of an economic slowdown in China, luxury companies continue to build their extravagant retail spaces for the growing mass of wealthy and middle class shoppers.

The latest example of this is Swiss luxury watch brand, Hublot, which opened its second boutique in Shanghai Tuesday. Located on Nanjing West Road, an area renowned for its concentration of top luxury brands, the boutique features the black that defines the Hublot brand along with leather furnishings, glass and metal fixtures, and high-tech details that create a contemporary space.

The boutique is the fourth in China for Hublot along with four other points of sale in Beijing, Shanghai, Dalian, Shenyang and Wuhan. The brand said it plans to have 15 outlets in China “within a short time frame.”

A month earlier, the German luxury brand, Montblanc, opened a four-story flagship in Beijing to house its luxury writing instruments, timepieces, fine jewelry and leather goods with an extravagant party attended by 1,000 persons, including Jessica Alba, Naomi Watts, Nicolas Cage and Amber Heard.

It is the largest store by the brand and includes interactive displays throughout the store that focuses on the company’s heritage.

So while investors take a pause, luxury brands continue to bet that China will continue on its road to prosperity.

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Graff, Blancpain among Top-Rated Luxury Brands

Heart-shaped diamond necklace by Graff.

The Luxury Institute released its 2011 Luxury Brand Status Index survey of wealthy U.S. consumers. Watches, jewelry and automobiles (selling for at least $100,000) were rated on a one-to-ten scale by consumers who earn at least $200,000 a year. The top three brands in each category follows:

Blancpain L-Evolution

Jewelry
Graff 8.38
Buccellati 8.19
Asprey 8.05


Watches
Blancpain 8.35
Rolex 8.01
Vacheron Constantin 7.85

Ultra-Luxury Autos
Maybach 8.44
Bentley 8.32
Bugatti Veyron 8.22

Brands were rated based on quality, exclusivity, social status and overall ownership experience. In addition, these affluent consumers based their selection on price worthiness, their willingness to recommend it and the likelihood they'll buy it next time they make a purchase in the category.

Luxury Jeweler Buccellati Begins A New Chapter

Sketches of Buccellati's new solitaire engagement ring, which will be unveiled in March.

The Italian high jewelry house, Buccellati, is undergoing a rebranding effort in an attempt to present a more contemporary image. It includes the company’s first-ever engagement ring line; a high-tech, high-jewelry introduction; a redesigned logo; and something new in the watch category that is “top secret.” 

The focal point of this change is the promotion of its youngest family member, Lucrezia Buccellati. The 24-year-old recently began working as the company’s fourth-generation designer. She will be sharing the design duties with her father, Andrea, in creating new jewelry collections. She explains that it’s a tradition in the fiercely independent family firm that two generations of the family create the designs. Her promotion came about when her grandfather, Gianmaria, in his mid-80s, recently announced his retirement.

“Now it’s my dad and me, before it was my grandfather and father. Always two generations in the design part. That’s how it works,” she recently said inside Buccellati’s cream-colored boutique on Madison Avenue in New York. “I step now in his chair. It’s a continuation of the generation. I think it’s a big challenge, there’s a little bit of pressure. You never know if it’s going to work, you’re young and it’s your first step in this world. It’s wonderful that there is somebody next to you to help you out like my father.”

In another sign of changing times at Buccellati, Lucrezia is the brand’s first female designer. She thinks this will influence future designs.

“I think that females have a different point of view than men,” she said. “Men think of an ideal woman. A female definitely thinks of a woman as someone more attached to fashion and art and what’s going on in the world around her.”

The family members were tight-lipped when discussing the new products, as they prepare for a March unveiling, but they did provide some details. 

The engagement jewelry collection is the first Buccellati line Lucrezia co-designed with her father. She said the rings are based on a more contemporary version of rings already available in the company's "honeycomb" pattern, perhaps the best-known of all of the jewelry-making techniques used by the company. It is appropriate because the pattern is similar to the Tulle netting technique for fabric often used for veils. In order to create the honeycomb shape, an artisan uses a labor-intensive and time-consuming technique of sawing pentagon-shaped holes with a fine blade.

The fine, net-like patterns will be enhanced with a center stone, which is what their clients want, according to Maria Cristina Buccellati, another member of the firm and Lucrezia’s aunt.

“The way we are used to seeing the solitaire is fine, but we wanted to add a touch of Buccellati so we created a round center stone with more workmanship,” Maria Cristina said. “We realized that a lot of people say they like this as an engagement ring but it doesn’t have a center stone so we designed a special collection with this kind of workmanship with this style and with a center stone.”

The high-tech introduction will be a one-of-a-kind iPad and iPhone cover. This was Lucrezia’s solo project. She said it will be “the most expensive and exclusive iPhone and iPad cover in the world.” It will include diamonds and signature gold engraving techniques. However, she promises it will be more refined and elegant than similar blinged-out products that are available. Leonardo DiVinci is the inspiration behind the design.

The company will also unveil a redesigned logo, as early as March, as part of year-long effort to make the brand appear more contemporary and attract a younger clientele. 

The one thing that won’t change is the craftsmanship behind Buccellati’s 18k jewelry. The company works exclusively with a stable of nearly 300 artisans throughout Italy who are skilled in a specific technique of making jewelry. Most are family shops, like Buccellati, that hand down their craft to the next generation. Because of this, the company only produces one-of-a-kind or extremely limited-editions of their pieces. It produces approximately 4,000 pieces per year, which includes its handmade silver objects (which the company also is known for) and watches.

For example, to create a one-of-a-kind collection using a particular kind of antique filigree technique (which involves delicate beading or threading of precious metal), the company had to go to Sardinia to find a family firm who still did this kind of work.

These are family firms that share the same value for craftsmanship as Buccellati, Lucrezia said.

“We know them all (personally) and we know their families,” she said. “You grow together. We learn from them and they learn from us. Our treasure for us is not the jewelry. Our treasure is our artisans."

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Luxury Brands Lift PPR’s Sales and Profit for 2012

PPR, the Parisian holdings company, said net profit in 2012 increased by 28.2 percent to €1.27 billion ($1.7 billion). Revenue increased 20.8 percent to €9.73 billion ($13 billion).

The company, which has divided its high-end businesses into the categories of luxury and sport and lifestyle, said its luxury goods division reported a 27.6 percent increase in operating profit to €1.61 billion ($2.14 billion). This more than offset a 12.1 percent decline in operating profit in its sports and lifestyle division.

The company’s brands include Gucci, Bottega Veneta, Saint Laurent, Alexander McQueen, Balenciaga, Brioni, Christopher Kane, Stella McCartney, Sergio Rossi, Boucheron, Girard-Perregaux, JeanRichard, Qeelin and Puma. 

Read PPR Shopping for Jewelry and Watch Brands

“PPR's results for 2012 are excellent, thanks to the exceptional performances of all brands in our luxury division,” said François-Henri Pinault, PPR chairman and CEO. “Our strong performance also highlights the good geographic balance of our activities and the consistency of the Group's strategy.”

The company, which operates in more than 120 countries, said revenue generated outside the Eurozone rose 11.6 percent in 2012 based on comparable data and accounted for 78.6 percent of sales for the year, versus 77.9 percent in 2011. Sales contribution from France remained unchanged from 2011, representing 5.5 percent of total revenue on a comparable basis.

In 2012, PPR said it continued its expansion in rapid-growth markets where revenue advanced 13.7 percent on a comparable basis and accounted for 37.6 percent of sales, representing a 100 basis-point increase on 2011 on a comparable basis. Sales in the Asia-Pacific region (excluding Japan) accounted for 25 percent of the total sales of the Group's brands versus 24.5 percent in 2011 on a comparable basis.

The company also is in the process of strengthening its position in the luxury and sports and lifestyle categories while divesting its holdings in other areas. For example, in December 2012, it acquired of a majority stake in Chinese luxury jewelry brand, Qeelin, and last month announced it acquired a majority stake in the luxury designer brand, Christopher Kane. It is also announced in January that it has found a buyer for Redcats children and family divisions.

The company added that it’s in the process of speeding up and expanding the scope of its transformation of Puma “in order to increase efficiencies in terms of organization, processes and systems and to streamline its cost structure, notably in Europe.” In October, Jean-François Palus was appointed chairman of the Administrative Board of Puma SE, replacing Jochen Zeitz.


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