Luxury watches and fine jewelry may be on the verge of a banner year, according to survey results from WSJ Intelligence.
Wall Street Journal readers who own or are interested in a mechanical timepiece valued at US$1,000 or more plan to spend an average of US$20,856 on a watch in the future, 56% more than their last purchase. At the same time, readers who own or are interested in jewelry valued at US$1,000 or more (excluding engagement rings) plan to spend nearly US$16,000 on a piece of fine jewelry in the future, 14% more than in the past.
The findings are from concurrent surveys conducted Dec. 6-13 by WSJ Intelligence. The 15-minute online luxury watch survey included 869 respondents who were 58 years old, on average, and who had an average household net worth of more than US$5.5 million. Of those who participated, 88% were men and 12% were women, according to the results.
The 15-minute online fine jewelry survey included 834 respondents who were 60 years old, on average, with an average household net worth of US$379,400. Sixty-six percent of the respondents were men and 34% were women. The average household net worth of WSJ readers is about US$3.5 million, according to Carolyn Romano, associate director of luxury lifestyle intelligence for WSJ | Barron’s Group.
The findings also revealed luxury-watch buyers plan to spend 41% more for a future purchase than a similar group surveyed in 2021. (Comparable data wasn’t available for fine jewelry buyers).
The significant jump in value for future purchases in both categories within just two years likely reflects the fact workers have returned to the office and are no longer shopping at home for the latest athleisure-wear, Romano says.
“A huge part of this is back to the office, back into what you’re wearing,” she says. It also reflects a shift toward buying investment pieces, items that speak to so-called quiet luxury and away from “big flashy logos.”
“With millennials in their peak earning years and Gen Z moving further into their professional careers—they have the means to spend,” Romano says. “It’s almost a perfect storm for the market.”
The survey also revealed that shoppers of both jewelry and watches prefer to buy in person even as most luxury goods are available online.
“You can buy a really nice handbag or you can buy designer clothing or designer shoes, but the act of buying a piece of jewelry or a watch—that is something that will always be done in stores,” Romano says.
Among watch buyers, four out five respondents said they were likely to both research and purchase at a physical store. Still, more than half, 54%, said they were very or somewhat likely to both browse and buy online, the results showed.
Asked specifically where they would make a purchase, the largest percentage, 48%, said directly at a brand’s brick-and-mortar location, while 40% said “at a retail store.” Fewer would buy online: 18% through a watch retail website and 11% through a retail website.
More than half of those surveyed plan to buy a watch within the year and 25% expect to do so within six months. That’s not because they need a watch, in many cases. According to the survey, 16% of respondents have six or more watches and 52% have two to five.
Jewelry buyers surveyed also mostly plan to buy their pieces in stores: four out of five plan to research and buy at a brick-and-mortar location, while two out of three plan to browse online and buy in a store, according to the survey.
Asked directly where they plan to make a purchase, 67% said at a brand’s store while only 9% said through the jeweler’s retail website. About 45% plan to buy a piece of fine jewelry within the year, with 28% buying within six months. A third of those who responded own more than six pieces of fine jewelry, the survey said.
Purchasers of jewelry and watches tend to have “very different motivations for buying,” Romano says.
Those who are interested in luxury watches overwhelmingly are drawn to the heritage and legacy of specific brands (89%) over physical appearance (77%), and they tend to buy for retirement (32%) or as an investment piece to pass on as an heirloom (29%). Birthdays also are the main drivers (29%).
Rolex is by far the most popular watch brand among those surveyed. Just over half of those who responded currently own one, followed by TAG Heuer—owned by 27% of respondents. As for brands those surveyed are considering for purchase, 42% said Rolex, 27% said Omega, and 25% said Patek Philippe.
Jewelry buyers, meanwhile, are less interested in a brand’s legacy or heritage (41%) than in a piece’s physical appearance (77%) and craftsmanship (68%). Most buyers are likely to make the purchase for a special event, such as a birthday or graduation (51%), while 48% will buy a piece for a milestone, such as graduation or marriage. Most are motivated to buy jewelry as gifts for wedding anniversaries (56%) and birthdays (56%), while only 18% buy jewelry as a retirement gift.
Among respondents with a net worth of US$5 million or more, the most popular brand owned by respondents is Tiffany (41%), followed by Cartier (33%), and David Yurman (27%). The brand this group most wants to own also is Tiffany (35%), followed by Cartier (33%), and Van Cleef & Arpels (23%).
The secondary market for watches and jewelry is also in vogue. Although fine art segments slumped at the top auction houses this past year, on average, sales of jewels and watches at Christie’s, Sotheby’s, and Phillips rose by 10.3% in 2023 over the previous year according to ArtTactic, a London firm that analyzes the market.
The WSJ survey didn’t capture secondary market activity for jewels, but it showed that 22% of potential buyers are considering a purchase at a watch resale or vintage website.
Both Penta and The Wall Street Journal are owned by Dow Jones.
Read the full article here