6 things jewellery businesses shouldn’t ignore this year
When I look online or speak to jewellery designers, manufacturers and retailers, it’s fair to say that there’s a broad mix of challenges ahead; from market forces that are balanced on the wider economy, all the way to creative marketing issues that elevate your business above the competition.
As a lawyer specialising in jewellery and intellectual property law, I spend much of my time listening to jewellers and providing advice on how they can protect their businesses. So with this in mind I’ve updated my guide on what challenges we can expect for the remainder of this year and the year to come, and as a lawyer, how I respectfully suggest jewellers & retailers approach these challenges.
We started talking about Brexit nearly three years ago – and we are not likely to stop anytime soon. With the political game of Deal of No Deal still unfolding, there is so much uncertainty around this subject that challenges are likely to go on for some time. However, we consider the two most pressing concerns for jewellery businesses remain those around employment and intellectual property.
The post-Brexit immigration regime will be based around skills, not nationalities, and severely limits the ability of UK employers to recruit so-called low-skilled workers from the EU after Brexit. Under the new system, skilled migrants from the EU would have to earn at least £30,000, (the salary threshold that is already imposed on non-EU workers), before being allowed into the UK on five-year visas. Now is the time to gather employee data to understand who may be impacted by the changes, what roles they carry out and what you can do to retain them. Royds Withy King employment department is keeping abreast of the changes and is able to advise businesses more fully. Contact [email protected]
Changes in intellectual property rights once the UK leaves the EU; those Pan European rights presently enjoyed by UK individuals and businesses will fall away, but what will replace them? In September 2018, the Government published its technical notices on trade marks, designs, patents and copyright if there’s no Brexit deal. IP rights is a massive issue, but not one that is likely to be considered a priority to the UK Brexit negotiating team. Whilst the UK “looks forward to exploring arrangements on IP cooperation that will provide mutual benefits to UK and EU IP rights holders” (to quote the Government), businesses should be wary of the many pitfalls they may fall into.
To be fair the government has already made a start on IP rights and has begun to issue Statutory Instruments under the EU (Withdrawal) Act 2018. The purpose of these Statutory Instruments is to correct deficiencies in UK legislation and retained EU Law arising from Brexit so that the law is effective once the UK actually leaves the EU, be it on 31 October 2019 or whenever. Some laws simply have no practical effect after departure (e.g. those relating to the enforcement of EU trademarks in the UK etc.) Broadly those who enjoy EU rights in designs, patents and trademarks will enjoy comparable rights in the UK after exit day.
As mentioned above, changes to employment law pose a significant risk to your business, especially as it’s one of the fastest changing areas of the law. Legislation, both domestic and European, has made significant inroads, many of which are beneficial to the workplace. These concern the conditions, pay and contract terms under which staff operate. These changes however are often most keenly felt in the retail sector where there may be a greater than average reliance upon casual or seasonal workers.
With the ever increasing competition from online operators, the High Street feels the greatest squeeze on profit margins. Of the various factors that contribute to this challenge, we often speak to retailers who are concerned about the National Living Wage, apprenticeships and compulsory workplace pensions. All of which are very real challenges, but when navigated correctly do not have to be a roadblock to your overall success. Again please contact our employment department for details.
Manufacturers and importers will adjust their prices according to fluctuations in the exchange rates, and as the UK has seen a significant fall in the value of the Pound, this ebb and flow is particularly pronounced. This makes foreign imports more expensive, and this can be felt particularly keenly in the jewellery sector where so much of the High Street jewellery is made overseas.
Whilst Britain continues to be a leader of design, it is not, and has not been for many years, a manufacturing powerhouse, so uncertainties in world economics do have a direct impact on the cost of items in UK shops. With added staff costs referred to above, and higher import costs through, amongst other things, poor exchange rates, the retail jeweller does face pretty serious challenges to maintaining profit levels. Exports and tourism dependant businesses will, on the other hand, benefit.
Diamonds and most precious metals are valued and traded in $[US dollars] which is presently strong against the pound and most currencies. Given that these commodities have always been traded this way dealers may not be too concerned at a weak Pound.
Is the customer always right? You may have your fair share of anecdotes about dealing with… ‘misinformed’ customers, but at the end of the day, if you provide poor customer experience, your competitors benefit.
Competition is the force that drives innovation when it comes to customer experience and the sophistication of competition never seems to slow down. Today the retailer is competing in the High Street with; shop-in-shops, concept stores, pop-ups, and national and multi-national chains. That is before we even begin to consider the seemingly endless choices available online.
When considering the ‘retail experience’, one cannot overlook the inconvenience to many consumers of travel and parking. With councils enforcing ever restrictive parking limitations and penalties for transgression, the High Street needs to continue developing a retail experience to rival that of the retail parks, super malls, and online. But where they may be big, high street retailers are small and nimble, with a closer relationship to their customers, that has a greater emphasis on customer care.
Good leadership or governance really means having a good decision making process. Possibly the biggest, or certainly a significant factor to poor governance is apathy. Manufacturers, suppliers and retailers must ensure that they have good processes for the management of their business and must look analytically at these and consider taking consultants’ advice. Look at the differences made to businesses by celebrity consultants, Mary Portas and Gordon Ramsay! Get good legal advice too.
Businesses are expected these days to have a website or some presence on the internet. It is a challenge for businesses to ensure that the digital content of their business makes the right impression on its customers and crucially its potential customers. Laws and rules are generally in catch-up mode when it comes to the digital marketplace, and is therefore considered a fast moving area of law and commerce full of potential pitfalls. Do you have ownership of the content on your website, who owns the copyright in images and narrative? Are you protected from internet theft of IP? These risks remain a significant concern.