Robust Retail Projections
Retail sales projections for the winter holiday selling season and year-end are optimistic as we enter the important fourth quarter spending drive. The National Retail Federation (NRF) just upgraded its retail sales forecast for 2018, expecting sales to grow at a minimum of 4.5 percent over 2017 rather than the 3.8 to 4.4 percent range forecasted in February.
The U.S. Bureau of Economic Analysis, a division of the U.S. Department of Commerce, reported that U.S. consumers spent nearly $77 billion on jewelry and watches (costume and fine) in 2017, up over 2016 by 5% ($73.2 billion, revised data). Data revealed by BEA shows steady incremental growth in jewelry sales since 2011.
Retail sales in the first half of 2018 grew 4.8 percent year-over-year and have been up 4.4 percent year-over-year in the most recent three-month moving average. The NRF now expects gross domestic product for the year to grow at the higher end of the 2.5 to 3 percent range it forecasted earlier.
The upgraded forecast considers government revisions to retail sales, personal income and consumption numbers from 2016 and 2017 that affect year-to-year comparisons, explains NRF Chief Economist Jack Kleinhenz. Total retail sales have grown year-over-year every month since November 2009, and retail sales have increased year-over-year in all but three months since 2010.
Matthew Shay, NRF president and CEO hopes it’s a banner year, but acknowledges that tremendous uncertainty remains as to what extent current trade tariffs will impact consumer spending.
Jewelry Gift Trends
Looking forward to a robust holiday selling season and year overall, Theresa Namie, merchandise manager for Ostbye in Minneapolis, Minnesota expects steady sales and a good fourth quarter industry wide. “Our independent jewelers have planned and adjusted over the last few years on how to sell to the next generation, including social media, online sales and the variety of styles the consumers are asking for.”
Ostbye is promoting products like 10K gold fashion with beaded detail; silver set with emerald, ruby and sapphire; and birthstone stackable bands among its expected 4Q winners. Namie says that bezel-set gemstone solitaire necklaces and bands work well with the trend to layer and stack, as women want to customize how they tell their personal story with jewelry. She mentions that the birthstone bands have been popular not only as fashion pieces, but also for wedding/anniversary and mother/family rings.
Pearls too continue to be a favorite gem to gift, especially for important milestones including weddings, graduations, and birthdays. Kathleen Ross, creative director for Honora, a Richline brand in New York City describes designs that are easy to wear and combine well with other things popular, especially set in silver, although yellow gold is trending. She rates fun and flirty, day-to-night pearl and black diamond designs in the brand’s latest Noir collection among the top trends for fall/winter.
Diamonds continue to be the most popular gift to celebrate love, says Renato Cruz, vice president of product development for Sumit Diamond, New York City. He cites trends for “collectible” diamond jewelry, like stackable rings and matching sets. “Diamonds can be worn everyday, and with today’s stylings of gold and diamonds. They are affordable and can be bought for any occasion.”
Fancy color diamonds continue to offer alternatives for those who love diamonds, but want something different. Jennifer Phelps-Montgomery, designer for the New York City-based MWI Eloquence, hails natural fancy color diamonds an unexpected and beautiful alternative to white diamonds, particularly in spicy hues from peach to cinnamon to brown set in rose and yellow gold. She sees an uptick in pendants, as well as long dangling earrings, and rings and line bracelets. In addition to making great anniversary, birthday, and push presents, she sees the rate rising of women gifting themselves fancy color diamonds.
Classic designs that mix metals, play with negative space and are sprinkled with diamonds or a pop of color make easy gift and self purchases, says Eve Chiles for the silver and gold manufacturer Breuning in Lawrenceville, Georgia. Beaded details, intersecting geometric shapes, chevron and floral designs are trending in cuffs and bands, earrings and pendant necklaces.
Create a gift department, advocates Pam Danziger, president of Unity Marketing, Stevens, Pennsylvania. Author of “Shops That Pop”, she explains that traditional store models arrange merchandise by type, rather than function. And, while typical shoppers know what they’re looking for before they find it, gift shoppers are often not sure what they’re looking for, so the retailer can make that easier by creating a prominent area where great gift ideas are displayed.
Unity Marketing estimates that $1 out of every $10 spent in the typical retail store, and now increasingly with online retailers is on a gift. That translates into about $128 billion spent on gifts in 2017. By creating a full-service gift department retailers can make their store top on gift shoppers’ lists to go when they need to buy a gift, which research suggests is every one to two months.
A strong proponent of taking the guesswork out of gift giving, Ostbye offers retailers easy to sell, current mainstream designs that appeal to a variety of age groups, with display presentations that promote bestsellers, says Namie.
To complement in store displays, Phelps-Montgomery advocates retailers use social media to promote what makes/how to give a good gift, with visual platforms like Instagram and Piniterest that are powerful idea sharing tools.
The key to success in retail today is to not just be a place for people to buy things, but rather be a destination for people to have experiences, says Danziger. Buying and selecting a gift is an experience that challenges most people, yet it is important for them because the gift carries such emotional weight. Making the store a destination for gift shoppers fills a real need.