The lure of social media and e-tailing has yet to find favour with all luxury brands.
When it comes to gift-giving, the Gulf doesn't do austerity. Shopping for others, whether for a wedding, birthday or religious holiday, is a cultural pastime in the Middle East.
It's led to record sales figures this year at malls across the region. Buyers spent $114 million in the first week of Dubai's month-long shopping festival in January, a 53 per cent increase than last year, according to Visa.
Valentine's day was no different. Gold and jewellery chains in Dubai registered spectacular growth in February as romantic gifts flew off the shelves. The likes of Damas, Pure Gold, Joy Alukkas, Malabar Gold and Sky Jewellery all saw sales skyrocket.
With high gold prices putting some off, more are turning to equally emotive diamonds, according to some retailers.
Dubai is a very competitively priced market, but the region as a whole enjoys high disposable income levels, reducing barriers to buying expensive items. Yet the business is changing. For one thing, technology is becoming essential to marketing products as gifts.
Tiffany & Co is recognised for its iconic signature gift wrapping, the Tiffany Blue Box. Last year, it launched an iPhone application called the "Tiffany Engagement Ring Finder". It has since been downloaded more than 800,000 times. The app displays ring styles on a hand model to determine which suits the user best. Tiffany's ring consultants are also on hand via the app to give advice.
The company hopes this type of technology will drive them to its boutiques. The firm, founded in 1837 in New York, has been steadily building its presence in the Middle East, with its Dubai headquarters becoming just the fourth international representative office outside America.
Social media is another avenue to receive brand attention in recent years. Facebook, Twitter and others have been used by luxury jewellery and watch makers to alert consumers to special occasions and direct them in-store.
Yet, a lot of indigenous jewellers in the region have been reluctant to embrace the trend. One marketing professional, who represents a well-known Dubai store, complained: "I'm having a hard time convincing management about the value of social media. They are "old-school" and don't use any type of social media themselves, so this is the first time that we are trying it. We seem to be getting really good results in a short time frame, but they are still not really convinced."
Others, however, are more confident.
"Although we're concentrating on Facebook we're also trying something else,"
says Anuraag Sinha, managing director, Liali Jewellery."We're reaching out to three prominent bloggers in the region with popular and quality sites. We'll be working with them on various ideas and get our details on their sites.
"As well, we're working towards getting our e-commerce site up and running. It's an opportunity for people to get gift ideas for occasions such as birthdays, anniversaries and weddings."
Often, retail firms hold personal details of online customers, and remind them of salient dates such as birthdays.
The promotion of "gifting" online should be handled with care, according to many in the premium watch industry. There is a sense that it could be confused with less glamorous forms of marketing such as discounts and vouchers.
George Béchara, regional brand director at Zenith Watches, said: "Since last year, we've become more active on social networking sites, including our Facebook pages and through professional watch bloggers. We are using those networks to do events in the stores with the bloggers. From my perspective, 'gifting' is not a good approach in our category."
Others believe online should be an idea-generating tool for gift hunters. A brand's website shouldn't herd shoppers to a specific store, says one manufacturer.
"We stimulate interest in our product through online and social media marketing, but we're not going to direct clients to a particular boutique. Firstly, we want them to decide for themselves, and secondly, the brand partners in our various Gulf markets would not be happy," he says.
Firms such as Patek Philippe and VacheronConstantin occupy an exclusive spot in such an ultra-luxury segment that often intimidates buyers. If nothing else, an informative website could instil confidence in the first-time buyer to enter the store.
A case in point is Van Cleef & Arpels, which was initially nervous about launching an online component for fear it might be mistaken for an online shop. E-commerce and exclusivity in the luxury watch industry needs to be carefully stage managed. The firm now uses its website mainly to educate consumers.
So, if the first few months of 2012 are a gauge, then the outlook for gift purchases looks positive. There is still room for some in the Gulf jewellery industry to conquer their fear of online or, at the very least, get more comfortable with it.
© Gulf Marketing Review 2012
