Holiday forecasts expect retail sales to grow at least 7% in November & December than in 2020, 11% over 2019.
Fueled in part by pent-up savings and government stimulus, consumers have the desire and means to spend. Over the last six months, the luxury retail and jewelry sectors have experienced some of the strongest year-over-year and year-over-two-year growth that is anticipated to continue through the holidays, reports Mastercard SpendingPulse.
Positive outlooks on the economy, employment, and household spending bring a lot of optimism to the 2021 holiday shopping season,” said Matt Kramer, national sector leader, consumer and retail at KPMG International told Yahoo Finance. “Consumers are expected to start early and continue to increase online purchases.”
Notably, one category that stood out in its report was jewelry, with 41% of consumers saying they plan to spend more on it. Jewelry holiday sales this year are poised to rise 53% over the same period in 2019, 59% over 2020, cites Mastercard. Luxury sales (excluding jewelry) are expected to jump 56% over 2019, 93% over 2020, according to SpendingPulse.
Mastercard senior advisor Steve Sadove, the former chairman and CEO of Saks Fifth Avenue, told CNBC that the growing popularity of jewelry “is about self-expression, people getting out. “What you’re seeing is consumers want newness. They’re tired of sitting at home in their yoga pants. They want to have new jewelry. They want new apparel. There’s a freshness in the season, and this is really showing well for jewelry and the luxury sector.”
While we have yet to fully emerge from COVID, SpendingPulse said it expects a tempered “return to in-store browsing and shopping” this holiday season. Although, it predicts ecommerce sales will continue to soar, nearly 8% over 2020, and over 59% over 2019, which the service says is a record high for the channel.
Corinna Bhasin, general manager, FD Worldwide Merchandise Group, believes the industry will continue to benefit from dollars not being spent on travel and entertainment, as many people are still concerned about COVID.
Parag Desai, executive vice president of merchandising and marketing for SDC Designs concurs that the spread of the virus is still devastating in many countries, and he expects travel will not pick up to pre-COVID levels anytime soon. In fact, he anticipates that not only will this holiday season be profitable for fine jewelry, 2022 is going to be very promising.
Supply Chain Challenges
Industry-wide supply chain challenges that include factory shutdowns, chip shortages and port congestion are expected to last through the holidays and well into next year, CNBC cites in a holiday forecast Sept. 14. Many phases of the manufacturing and delivery processes are taking longer than normal. Consumers can expect packages to take more time to get to their doorsteps.
As the entire global supply chain faces many challenges, Mathew Behnam, vice president of sales and marketing for Samuel B., underscores that we are all very much dependent upon each other, and that it is important for jewelers to keep the dialogue open with their vendors to better forecast supply.
Behnam shares that Samuel B. is producing enough products that it thinks it will sell through March 2022, so as not to disappoint retailers during the holidays to fill orders. But he strongly advises jewelers confident about their business, to order early and stock up to avoid empty shelves at Christmastime.
And, they are, reports Valerie Fletcher, vice president of design and product development for Original Design Inc. (ODI). “Retailers are ordering early and extra. Meaning, holiday orders are coming in early and are higher quantities than in previous years. Sales are up and production is up. But delivery is unreliable. Ongoing international COVID issues have unpredictable consequences that affect air and ground transportation. There’s a shortage of pilots and truck drivers. So even when product is ready to ship, flights are being delayed and cancelled, which adds to the timeline.
Another factor is a shortage of factory workers in the USA, which is affecting production of chains, findings and settings that we rely on to finish our pieces. Most of our findings are purchased in the USA, and manpower shortage is resulting in delays of up to eight weeks.”
The current situation with shipping delays, and the post office slowing down its delivery, may be beneficial to brick-and-mortar jewelers, says Fletcher. “Shoppers may not feel confident buying online and hoping for on-time delivery. Jewelers who are well stocked and staffed will benefit.”
The brief cites that during much of the pandemic, consumer goods companies and retailers in the U.S. were collaborating out of necessity to ensure the supply of essentials. While the report focuses on the grocery industry, the message translates throughout industries, in that a collaborative approach helps suppliers and retailers overcome multiple challenges.
The 2112 Group’s 2019 ease of doing business report found that nearly three-quarters of partners complained about overly complicated partner programs and said they look for increased support, transparency, and predictability in programs. Close to 40% wish for consistent rules of engagement, improved training programs, and simplified incentive management. Fully 61% of partners feel that they have insufficient strategic guidance and would like more transparent market development fund requirements, while 70% of partners feel that the on-boarding processes have too many steps and could be streamlined.
Behnam says he has heard this from retailers, which is why he has focused the last five years on developing effective tools that make it as easy as possible for retail partners to order, merchandise, market and sell Samuel B. An example is its stock balancing program, one-for-one stock, with no RA# or minimum shelf-time required. “The goal is to have the best product assortment possible.”
At JCK Las Vegas in August, Samuel B. was one of many suppliers in The Plumb Club pavilion presenting an array of tools and resources to help retailers be successful including no-hassle stock balancing, deferred payments, user-friendly displays, virtual try-on applications, consumer credit card program, custom design platform online, training, and more.
Top Jewelry for Holidays
Retailers are covering all the basics, shares Fletcher. “We are seeing higher than usual orders for our best sellers and classics in both gold and silver, fashion basics, core bridal and anniversary programs.”
She cites trends seen in holiday orders: the minimal mix, mini studs and mini hoops are strong, and are worn in mix and match multiples; and light layered necklaces and skinny stack rings complete the trend. “Another trend is more of a ‘boyfriend’ look,” Fletcher adds. “Miami Cuban link, paperclip chain, ID plates, padlocks, discs, and signet rings are hip, casual, and cool. In youth jewelry it’s all about engravables, emojis, and enamel.”
Meaningful jewelry is always a winner, including mystical and religious symbols, notably infinity symbols and birthstone jewelry. Pearls remain a favorite in classic modern styles with diamond accents.
Lab-grown diamonds continue to capture an ever-growing consumer base for both bridal and fashion fine jewelry. Cora-Lee Colaizzi, director of marketing and catalogs and senior merchandiser for Quality Gold, expects lab-grown diamond stud earrings to be the holiday gift favorite.
The current situation with shipping delays, and the post office slowing down its delivery, may be beneficial to brick-and-mortar jewelers, cites Fletcher. “Shoppers may not feel confident buying online and hoping for on-time delivery. Jewelers who are well stocked and staffed will benefit.”