Positive Forecasts for Holiday Sales
After all consumers have been through, they owe it to themselves and their families to have a better-than-normal holiday.
The National Retail Federation confirmed its forecast that holiday sales during November and December will increase between 3.6 percent and 5.2 percent over 2019 to reach a total $755 billion to $767 billion.
The numbers compare with a 4 percent increase to $729 billion in 2019, and an average holiday sales increase of 3.5 percent over the past five years. They include online and other non-store sales, but exclude automobiles, gasoline and restaurants.
“We know this holiday season will be unlike any other, and retailers have planned ahead by investing billions of dollars to ensure the health and safety of their employees and customers,” NRF President and CEO Matthew Shay said in a statement. “Consumers have shown they’re excited about the holidays and willing to spend on gifts that lift the spirits of family and friends after such a challenging year. We expect a strong finish to the holiday season.”
In fact, business at retail for August, September and October exceeded, in some cases by double digits, over 2019, shares Michael Lerche, President and COO of Goldstar, the New York-based diamond jewelry manufacturer, a leading supplier to major retail jewelers. “This resulted in additional orders for this fall, and although we cannot make back what we lost from March to June, our year will not be as bad as we thought it would be back in the early summer.”
Bruce Pucciarello, CEO of Novell, a subsidiary of Continental, in Rahway, New Jersey, concurs with this trend. “Fortunately, our Core business rebounded quickly after the spring, and then some. So, business has been very good. I would not have forecasted this back in March.”
He reports the Core Novell business grew in its precious metal band division, and its new partnership with Continental has opened new markets. Valuable for the company has been the ability to stock and manufacture Continental’s extensive product collection at a highly functional domestic drop-ship facility.
Given the pandemic, there is uncertainty about consumers’ willingness to spend. But Jack Kleinhenz, NRF Chief Economist, anticipates consumers, after all they’ve been through, feel that they owe it to themselves and their families to have a better-than-normal holiday.
“There are risks to the economy if the virus continues to spread, but as long as consumers remain confident and upbeat, they will spend for the holiday season,” Kleinhenz said in a statement. While the beginning of the year was challenging for everyone with a nationwide lockdown, COVID’s impact on the consumers’ psyche has presented opportunities for those in the jewelry business, says Lerche.
In fact, data from the NPD Group reveals that jewelry sales, which were down some 30 percent through the summer, have recovered in recent months, with the holidays expected to give jewelers a big lift. About 30 percent of annual jewelry sales typically are made in November and December, according to historic data from NPD, providing jewelers the chance to get back on track this holiday season for the year.
CNBC reported on Nov. 25 that major retailers like Signet and Tiffany are driving sales this holiday season by encouraging jewelry purchases as a romantic gesture, Zoom accessory, or way to add sparkle to a very challenging year.
“It’s going to be up to the retailers to really coax and swoon the gifter to recognize that jewelry is the gift that’s going to soothe all of the pain that we’ve had to endure,” Marshal Cohen, senior chief retail analyst at The NPD Group told CNBC. “The feel-good, ‘I love you’ part of that equation. That now has to become a bigger part than it has ever been before.”
Pucciarello agrees, describing the sale, now and in the future, reliant on jewelers “listening to the customer, feeling the customer, and helping the customer understand what they know about what makes what they do so special.”
Creative jewelers have proven to be resilient this year, finds Neil Shah, of Shah Luxury, New York. Servicing independent jewelers, Shah describes his retail customers as adjusting to the new normal with customer centric services like curbside pickup, home delivery, virtual appointments and events, and more personal connections with core clients. “Independents especially have the ability to respond and adapt more quickly to change than the larger retailers.”
But the larger jewelry chains have stepped up their virtual game. Signet Jewelry, including Jared, Kay and Zales, reports training more than 300 employees as virtual jewelry consultants who can help customers pick out engagement rings and special gifts without going to the store.
Undoubtedly, those with a solid online footprint have been better able to weather store closures by facilitating sales online.
“As a manufacturer with a strong retail distribution network, many of the setbacks we experienced in the spring with our brick and mortar retailers closed, were counter balanced by strong demand on our [their] and our own e-commerce sites as consumers found alternative ways to shop,” tells Jeffrey Cohen, President Citizen in New York.
In fact, the NRF expects online and other non-store holiday sales will increase 20 percent to 30 percent to between $202 billion and $218 billion, up from $169 billion in 2019r.
But despite the pandemic, and the consequent growth in online sales, consumers still prefer to shop for jewelry in store, finds De Beers Group research of 500 US consumers during COVID. More than 62 percent would prefer to buy diamond jewelry at a physical store, even the case with digital-savvy Millennial and Gen-Z consumers, 59 percent of which prefer the in-store experience.
The survey finds consumers appreciate safety measures including limiting number of customers in store, providing hand sanitizer, wearing face masks, and cleaning jewelry after handling.
Kristie Nicolosi, president and CEO of The Kingswood Company, believes jewelers are incorporating “a new level of clean” into their customer experience and communications that’s reassuring.
“In the age of COVID, everyone is even more concerned with hygiene,” says Nicolosi for the Columbus, Ohio manufacturer of jewelry care products. “People want to keep their hands, and those things that adorn them, clean on a frequent basis. While the pandemic doesn’t have many positives, it has presented a wonderful opportunity for jewelers to connect with customers, and educate them on the safe cleaning of their jewelry, and offer the products they need now.”