The impact of Covid – perspective of assay offices


As the first wave of COVID-19 has passed in Europe, retailers expect to get back on their feet. Shopping centres in England count the increase in the number of customers. If we compare the numbers on the 8th of June to the 15th of June, we would see an increase of 42%. However, this is not as satisfying because the numbers were much higher last year. A comparison of the number of customers to the last year’s figures shows a 34% decrease.*

It seems that good weather helps but not as much as businessmen would want to.

There are several reasons why customers do not rush back to physical stores. Not all restrictions have been relaxed. According to some surveys, some customers fear that other customers would not keep up with the required safety measures. Others do not want to wait in long queues.

Diane Wehrle, the Insights Director at Springboard: “...nevertheless the rise is significant”*. It seems that good summer weather helps shops to attract more customers and the future seems more promising as more restrictions would be relaxed. However, retailers have more chances online. According to ParcelHero, non-essential online shopping is “no longer a sin”**. COVID-19 had an impact on customers’ behaviour and it is expected that this change will have long-lasting effects. Some brands claim that they would not participate in any trade exhibitions this year. Many trade fair organisers cancel their events. Others are brave and try to move forward even under these circumstances.

Baltic Jewellery News interviewed Joan Ignasi Moreu, the Director General of the Spanish C2 Assay Office to get more insights about the situation.

How Assay Office provided its services after the quarantine started?

The Spanish C2 Assay Office is the one managed by the Official College of Jewellers, Goldsmiths, Watchmakers and Gemmologists, a corporation under public law, professional in nature, having a democratic structure and its own legal personality, created by the Government of Catalonia.

Our Assay Office was closed in order to protect the health of our staff when the quarantine started in Spain (on the 13th of March). In addition to this, as the quarantine ultimately resulted in a very long period of time with all retailers closed and people confined to their homes, almost all jewellery industries gradually ceased their production, making the demand for hallmarking almost non-existent.

Which part of Assay Office work can be done on computer and online? Which activities can be done only in the Assay Office?

Unfortunately, it is a basic fact that the hallmarking in general is an activity that requires presential work. Analysis requires chemical testing, so we have to handle samples. Obviously this applies to hallmark itself, because we have to touch each piece of jewellery specifically.

In our case, only two activities can be performed online: the management of documentation for the yearly revision of the quality standard and the procedures (accreditation under ISO 17025); and the information regarding hallmarking and precious metal laws.

Sales online became a necessity for jewellers worldwide rather than an available option. Did jewellers from your country actively push their activities to the online platform?

Some of them have increased their activity. But the online sales still make a very small share of the market; additionally, the percentage of penetration and preparation for the online channel is relatively weak in our industry.

Do you feel the impact of COVID on your activities? Do you see any decrease in the need for hallmarking services?

The demand for hallmarking services has decreased to almost zero during the quarantine period. The industry had no opportunities for moving their products as the retailers were completely closed for two months; it is true that there have been certain online sales or export, but they were marginal. In addition to this, many manufacturing companies had to cease operations, because the pandemic broke their supply chain, thus stopping orders and supplies at the customs, in the countries of origin, etc.

There was a lot of noise and information how to move your business to the online platform floating around. What kind of support can jewellers seek from your Government? Are there any special programs?

Certain subsidies have been available for developing a web page and e-commerce for artisans and on the art-craft level of production as well as retailers in Catalonia (even in previous years). It is definitely helpful, but it is just a minor part. In addition to this, there have been some sessions (both presential and online) aimed at explaining e-commerce, marketing through social media, etc.

There are predictions that the restrictions could be resumed. Does your Assay Office have any long-term plans for changes in your activities?

Given the nature of our activities, we have very few options (in fact no options identified at the moment) in case of a new quarantine and confinement, if we are forced to close our facilities. So, we have implemented the normal set of preventive measures (servicing only those customers who made appointments in advance, distancing measures, individual masks, etc.), but there are no specific plans for changing the procedures for the time being. At the same time, the flexibility for such changes is low since the procedures are very restricted and limited by the Spanish legislations.

Scott Walter, the CEO of the Edinburgh Assay Office, commented to Focus Jewellery that: “With a large part of the population at home on a full pay or 80% of a full pay, none of their normal travel costs and no way of spending on entertainment and travel, online retail was always going to do well.” Did customers in your country also bought even unnecessary items online during the quarantine?

Our view is slightly different. Even though many people were at home, a significant percentage among them was people, who lost their jobs. There are much more people defined in Spain as “ERTE” (Temporary Employment Reduction Expedient), with 70% of basic salary, who are very concerned because it is not clear if their businesses would be able to reopen. Spain relies on Tourism significantly (approx. 15% of GDP), and this is the sector more heavily damaged by the pandemic.

Macroeconomics figures show this:

- “Fear of a deep crisis that degenerates into record unemployment figures has led Spaniards to take action and increase their savings to face unforeseen events.And it is in the period of confinement when they have got down to work making the savings rate in Spain during this period increase by 35 percent. This is reflected in a report prepared by Eulen Hermes, which establishes that the propensity of the Spaniards to fill their piggy banks will continue in the de-escalation up to an increase of 25 percent, and will reach the end of the year with a rise of 20 percent, until reaching the 400,000 million Euros.”.SOURCE: https://www.finanzas.com/economia-politica/los-ahorradores-llenan-sus-huchas-por-miedo-a-la-crisis_20058687_102.html

- “The household savings rate stood at 11.2% of their disposable income in the first quarter of 2020, 2.8 points higher than the previous quarter, due to the sharp decrease in consumption due to the impact of the pandemic of the coronavirus. [NOTE: this is only in the first quarter, when the quarantine had just started for 15 days…]This rate is calculated after eliminating seasonal and calendar effects and it is the highest for a first quarter, when the trend of decreasing savings had prevailed since 2003, according to data published this Tuesday by the National Statistics Institute (INE).Looking at all the quarters of the series, it is the highest rate since the third quarter of 2009.According to the quarterly non-financial accounts of the institutional sectors, the evolution of savings is the result of the 5.2% drop in final consumption expenditure of households compared to the same quarter last year, to 172,515 million, the largest decrease since the series started”.SOURCE: https://www.expansion.com/economia/2020/06/30/5efaf3a1e5fdea81178b45e2.html

So I would say that (of course speaking of the average and general terms) they are not spending more, and for sure non-essential goods receive the lowest priority. The fear of the worsening economic situation has forced most households to focus on the basic spending (food, health, water, electricity, etc.) and postpone non-essential purchases.

Thank you for the interview.

*Jewellery Focus

**chargedretail.co.uk

Interview with Milena Raonić, Bureau of Metrology, Montenegro.

How Assay Office provided its services after the quarantine started?

The National Coordination Body of Montenegro declared the quarantine on the 18th of March in 2020, which was followed by a period of adjustment to the new circumstances. Transactions with users were delayed and the number of submitted requests awaiting realisation was determined.

Requests received via e-mail during the quarantine were realised if they could have been handled remotely, while the realisation of requests, which included assaying procedures in the laboratory, were temporary delayed.

Which part of Assay Office work can be done on computer and online? Which activities can be done only in the Assay Office?

Since 15 April 2020, the IT Sector of the Bureau of Metrology has enabled online functioning for all necessary access to databases for the procedures of:

- identification of the mark of the manufacturers/importers of precious metal articles,

- confiscation of the mark of the manufacturers/importers of precious metal articles,

- issuing images of national hallmarks,

- and issuing expert opinions, which could be easily performed from home.

However, the most important and the most common procedure of assaying and hallmarking precious metal objects requires access to the official premises of the Bureau of Metrology.

Sales online became a necessity for jewellers worldwide rather than an available option. Did jewellers from your country actively push their activities to the online platform?

I would agree with you that online shopping has become a necessity. The most successful goldsmiths in Montenegro had well-developed online stores even before the situation caused by the coronavirus arose and turned it into the only way to perform their activities during the quarantine period.

Meanwhile, many goldsmiths, who did not have a well-developed online store and were not active on social media, resorted to this type of communication with consumers.

Do you feel the impact of COVID on your activities? Do you see any decrease in the need for hallmarking services?

The impact of COVID on the activities carried out by the Bureau of Metrology is extremely negative. To prove this statement, I will give you a brief comparative analysis of the work results, examination of gold and silver articles, for the 1st and the 2nd quarters in 2019 and 2020.

There was a lot of noise and information how to move your business to the online platform floating around. What kind of support can jewellers seek from your Government? Are there any special programs?

The Economic Task Force of the Government of Montenegro has established a package of economic measures aimed at supporting the economy, employees, and socially vulnerable citizens. The proposed measures involved subsidies for the months of April and May in 2020 for all halted activities in the amount of 70% of the minimum wage and 100% of taxes and benefits for each registered employee, who received a minimum wage and worked in a sector that had to be closed amid the prevention measures, which was the case for goldsmiths. The same package of measures was provided for a number of other subsidies, but none of them implied the development or improvement of online business.

There are predictions that the restrictions could be resumed. Does your Assay Office have any long-term plans for changes in your activities?

Changes in the implementation of the Bureau’s activities have been introduced in order to ensure compliance with the measures aimed at combating the spread of the COVID-19 infection. All activities are carried out with the following measures in place:

- All employees must wear protective masks (of a medical grade or cloth ones) and hands must be washed or disinfected after each contact with work equipment, money or following a physical contact with customers;

- Only 1 person can be present in a 10 m2 area, i.e., at the Bureau’s counter;

- A physical distance of at least 2 meters between persons is mandatory;

- Employees, who are in direct contact with customers (or third parties), must wear protective visors and keep a physical distance of at least 2 meters;

- Disinfection of hands when entering and leaving the premises of the Bureau is MANDATORY;

- If gloves are used, they must be disinfected regularly;

- Employees should avoid direct contact whenever possible;

- It is necessary to disinfect all work surfaces, equipment, all work equipment, floors and toilets by using the recommended disinfectants;

- Door handles and handrails as well as all surfaces touched by customers should be wiped by using the recommended disinfectants;

- Employees should ventilate their offices upon arrival and before leaving work;

- If employees have any symptoms of inflammation of the respiratory organs (fever, cough, shortness of breath, etc.), they must not come to work and contact the immediate supervisor and the competent health institutions instead;

- In case of suspicion that an employee has symptoms of the infectious disease COVID-19, the immediate supervisor is obliged to remove the employee from the Bureau’s premises, with a recommendation to immediately call the Call Centre; - The customers must wear protective masks (of a medical grade or cloth ones), otherwise they cannot enter the Bureau’s premises;

- In case of suspicion that a customer has symptoms of the infectious disease COVID-19, the porter is obliged to remove that customer from the premises of the Bureau, with a recommendation to immediately call the Call Centre.

Scott Walter, the CEO of the Edinburgh Assay Office, commented to Focus Jewellery that: “With a large part of the population at home on a full pay or 80% of a full pay, none of their normal travel costs and no way of spending on entertainment and travel, online retail was always going to do well.” Did customers in your country also bought even unnecessary items online during the quarantine?

The population of Montenegro is approximately 600 thousand people, while according to the Statistical Office of Montenegro (MONSTAT), the average (gross) salary in December 2019 was 781 Euros, and the average salary after taxes and without benefits (net) was 520 Euros.

In this regard, I would conclude by claiming that an average Montenegrin would not spend money on the purchase of precious metal articles, which puts our goldsmiths in a very difficult position.

Baltic Jewellery News is a major jewellery magazine in the Baltic states thats gives you insights from around the Baltic region.

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