Dubai gold retailers are trying to woo brand-conscious millennials to boost lacklustre sales.
Gold jewellery sales were flat this year with the first three quarters in negative territory, according to the Dubai Gold and Jewellery Group. Jewellers are also downbeat on sales prospects for next year as regional insecurity, a strong dollar and faltering consumer confidence has hit the market.
Adding to that downward pressure are fashion-conscious millennials – people who were born or came to adulthood around the millennium – who do not have the same desire to acquire gold as their predecessors.
“It’s a challenge selling to youngsters,” said Tawhid Abdullah, the group’s chairman.
He said it was trying to get the message to millennials that gold has great sentiment and great residual value.
“We have had to change our design and our products so that we can offer them accessories and jewellery that can be gifted inexpensively. However, creating products that are inexpensive with an inherent value has driven the margins down to wafer thin levels.”
Jewellers, like many retailers, are finding the economic climate increasingly difficult. The likelihood of further interest rate rises in the US and a stronger US dollar has led to bearish forecasts next year.
The increased competition in the UAE gold retail market is already having a detrimental effect on traditional retailers. “New entrants in the market like Kalyan Jewellers and GRT Jewellers gained market share … as they carried over the brand heritage from their home country, India,” said Amna Abbas, the beauty and fashion research analyst at Euromonitor International.
“Millennials are more inclined towards receiving gifts from well-known international brands such as Tommy Hilfiger but they prefer branded jewellery items.”
ascott@thenational.ae
Follow The National's Business section on Twitter
