Holiday forecasts expect retail sales to grow at least 7% in November and December over the year same period in 2020, and 11% over 2019.
From JA New York and the Independent Jewelers Organization (IJO) in Kansas City to Couture and JCK in Las Vegas, in person trade shows that took place this summer reported strong sales and optimistic feelings for a robust holiday season.
“Business in general has been great,” reports Harry Shah, account manager for Shah Luxury. “We’ve had the best eight months we’ve had in eight years!” Extremely satisfied with business at the JCK Las Vegas Show and activity in The Plumb Club Pavilion, Shah is expecting the holidays this year to be very busy.
Jonathan Cohen, president of IBGoodman, saw no one was wandering the aisles browsing at the show or The Plumb Club Pavilion. “Four out of five people who came to our booth bought,” shares Cohen, who says that he did not expect to meet new customers at JCK as the company did.
If jewelers made the effort to attend the show they wanted to see what’s new and needed product, found Kathy Grenier, vice president, business development for the pearl house, Imperial, of the serious buyers at JCK. “Jewelers figured out what to do to meet the challenge and have thrived,” she cheers.
Imperial CMO, Josh Bazaar, also expects the 2021 holidays to be a winner, citing that the IJO show in early August was a huge success for the brand, as was JCK. “There are a lot of people with a lot of disposable income to spend, and there is so much opportunity for fine jewelry and pearls, which embody hope, love and enduring value, to continue to shine.”
Jewelry Sales Will Soar
Holiday forecasts from four different firms — Bain, Deloitte, KPMG, and Mastercard — expect retail sales to grow at least 7% in November and December over the year same period in 2020, and 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 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
“Jewelers have had a good year, but are still cautious, and concerned about access to product because they’re having trouble getting what they need,” tells Cora-Lee Colaizzi, director of marketing and catalogs and senior merchandiser for Quality Gold. “We have the products. We invest and reinvest in our stock and we didn’t stop when COVID hit, we kept on going.” Quality Gold has more than 200,000 SKUs available for delivery.
Colaizzi shares that a big draw for buyers at JCK was the supplier’s six-month deferred payment program, allowing them to get product upfront that they pay for in January.
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.”