Jewelry Industry Confidence is High
Kiplinger’s latest forecast on retail sales and consumer spending for 2018 is bright. Excluding gasoline and autos sales, retail is expected to grow 5.1 percent, up from 4.2 percent in 2017, according to the Washington, D.C.-based publisher of business forecasts and personal finance advice. E-commerce will have another banner year, growing 15 percent, while in-store sales are up 3.3 percent—the best showing since 2014.
Optimism is high in the jewelry industry, reveals JCK’s first State of the Industry Jewelry Report, shared during JCK Las Vegas in June. More than 500 jewelry professionals were surveyed—mostly retail jewelers, with a sampling of wholesalers, manufacturers and designers—and 88 percent are optimistic about the next 12 months for the jewelry business.
In fact, 57 percent polled are feeling good about the state of the general economy, with 46 percent describing the economy to be better now than it was a year ago (only 20 percent believe it’s worse). Over 40 percent forecast better conditions a year from now, versus 22 percent who think things will get worse.
As for challenges, 47 percent cite online competition to be the most prominent. Three out of four retailers say they are concerned about the future of brick-and-mortar stores. Some 46 percent of jewelers sell goods on their store’s websites, and 55 percent say e-commerce has increased their business. Nearly 60 percent report e-commerce to be less than 25 percent of their business intake. Hopeful, more than 80 percent report social media marketing to be a top business practice, and 90 percent plan to increase their efforts.
Allison Peck for the NYC-based Color Merchants is excited with 4Q expectations. “What we’ve seen so far during this show season is that buyers are ready to purchase, so I think it’s a good indication of what’s to come.”
Some Trends Revealed
Among the standout trends in JCK’s report alternative engagement rings ranked as the No. 1 product trend in 2018 for nearly one third, with 66 percent considering them to be in their top three.
Buyers, Peck says, are more open to new styles and trends that keep everything fresh and exciting. “We’re finding that interesting pieces are selling across all categories,” she says, citing a pick up in the semi-precious gemstone category, specifically in fun shapes and settings.
Nineteen percent say they sell lab-grown diamonds, and of those 78 percent expect sales of the product to increase this year, with 62 percent of sellers reporting a rise in sales over the previous year.
Lab-grown diamonds were among the most asked about products at JCK Las Vegas, says Cora-Lee Colaizzi, director of marketing and catalogs and senior merchandiser for Quality Gold. The Fairfield, Ohio, based manufacturer launched its True Origin lab-grown diamonds at the show. “Consumers like new options and are drawn to the choice and price points lab-grown diamonds offer. Younger consumers raised on the advancements in technology and choices afforded by them are approaching this category with an open mind.”
Responsibly sourced jewelry is big with 73 percent of respondents reporting that they have sold it in their stores, 49 percent say sales are up, and another 49 percent see an increase in consumers’ concerns about responsible sourcing. Moreover, 59 percent report an increase in sales for custom design work.
The female self-purchasing segment is growing as well, with 65 percent of respondents citing an increase in sales for that segment, with 71 percent of female self-purchasers spending more than $500.
Michael Benavente, managing director for Bulova, New York says he expects to have a strong fourth quarter due to the momentum that has been building all year with double-digit growth across all channels of distribution. “Our sell through at retail has been fueled by our new introductions in automatics, our franchise collections such as Precisionist, Curv, Marine Star and Rubaiyat. Our stories have been resonating with consumers as told through our music partnership with the Recording Academy’s, Calum Scott and our #tuneoftime project.”
New unisex bracelets, couture models, re-imagining iconic designs are attracting new consumers, Benavente notes. “The economy continues to be strong and creating new jobs, so as long as this trend continues, combined with all of our initiatives, we remain bullish for a strong growth year in 2018 and a great Q4.”