Watch this space

Among the many retail sub-categories found in airports, watches and jewellery distinguish themselves as epitomes of elegance and luxury. Currently valued over £270 billion, consumer reports estimate the watch and jewellery market to grow between 3-4% globally. The Asian market accounts for almost half of global sales for jewellery and watches, with fine jewellery expected to grow between 10-14%. 

The winning combination of having high ticket items and low space requirements to display inventory allows jewellery and watches to have the potential of achieving one of the highest sales densities within an airport. Unlike other retail sub-categories, the ability of a watch and jewellery store to trade within a small space makes it suitable for space constrained airport environments. However, there are multiple factors that contribute to the sales of jewellery and watches in airports.

Understanding passenger segments and their appetite for retail spending is the first key step to ensuring watches and jewellery perform well as this will help determine the appropriate price positioning and brand to implement:

Age groups
A higher proportion of older millennials and Gen X passengers will have better potential to spend on premium and luxury goods due to their higher average purchasing power. In contrast, Gen Zs and younger millennials will be more inclined towards mid-market and reasonably priced watches and jewellery. However, reports show that Gen Zs and younger millennials have increased their demand for more premium watches and jewellery. This is in part due to the increasing influence of brands such as Swatch who are collaborating with luxury watch brands Omega and Blancpain.

Trip purpose
Jewellery and watch units perform better in terminals that have a higher proportion of international tourists and business travellers as these customers often seek special mementos as a reminder of their trip or as gifts.

International vs domestic passengers
A higher proportion of international passengers (i.e. tourists and business travellers) will lead to a higher proportion of luxury watches and jewellery items within the duty free offer such as at Hamad International Airport. International passengers will also be incentivised by tax free shopping which allows them to save on high priced items when compared with full-priced items at downtown retail stores.

Country of origin
The proportional mix of passenger origins can also impact price point decisions. Such as increasing the provision of luxury watches and jewellery brands due to a higher proportion of passengers from Asia or the UAE.

Jewellery and watch brands within airports tend to operate as single, standalone units such as Swarovski, Cartier and Bvlgari. However, this is not always the case for watch brands. Popular multi-brand watch operators such as The Watch Room in Doha Airport, Gassan Watches in Changi, or Watches of Switzerland in Heathrow provide passengers a larger array of choice but comes at a cost of taking up more space. Operating multi-brands and a range of price points is a better way to cater towards multiple passenger segments.

However, multi-watch brand operators tend to operate within international terminals and focus on luxury brands to secure higher margins. Single watch and jewellery brands have a better opportunity to provide a more unique retail experience with stores such as the new 90sqm Bvlgari pop-up store in Istanbul Airport that features an open, inviting layout coupled with eye-catching marble counters and glass displays.

The location of a jewellery and watch unit also plays a role in its success. Depending on its price point, watches and jewellery brands can benefit from being clustered together adjacent to similarly priced brands such as Cartier and Tiffany and Co. located next to Gucci and Hermes in Heathrow Terminal 5. This ensures that the store captures the same targeted passenger segment footfall.

Jewellery and watch brands also tend to be situated earlier on in the passenger journey or within the central retail zone of a departures hall and not towards the end as this sub-category benefits from capturing passengers that still have a big appetite to spend on items not considered a last-minute purchase. Watch and jewellery brands that cater across multiple price points such as Swarovski, have greater flexibility in where they can be placed as they can act as a transition unit from more premium brands to luxury brands to better enhance the passenger retail journey throughout the terminal.

The success of jewellery and watch brands within an airport is greatly dependent on understanding and targeting the right passenger segment. Considering that the younger passenger demographic should also be given appropriate attention when selecting premium luxury watch and jewellery brands. Coupled with the right pricing, size, brand and location strategy, jewellery and watches have the potential to be one of the strongest revenue contributing sub-categories per sqm within an airport.

Mukhriz Mustamir