Year in Review, a Look Ahead
With the all-important winter holidays left to unfold, the National Retail Federation forecasts a 3.7% increase in overall retail sales for the shopping season. While price remains paramount, consumers also want options that save time and add value (i.e. free gift wrap and shipping, gift card with purchase, price-matching). It cites greater consumer reliance on digital shopping. About 46% of holiday browsing and buying will happen online, so retailers with omni-channel offerings will benefit most. Bain & Co. expects overall year-end sales to grow 1% to 3%.
Total U.S. fine jewelry and watch sales are expected to grow about 2% in 2015, forecasts Euromonitor International, likely to reach nearly $80 billion In 2014, overall sales were $78.1 billion, up 1.5% from 2013 (a year of above average growth at specialty jewelers and general merchandisers), according to the 2014 U.S. Jewelry State of the Market Report released by Jewelers of America in March. Sales are predicted to rise 4.8% during the next five years to reach $120 billion by 2019, forecasts Research and Markets in its Jewelry, Watches & Accessories Retailing in the U.S. released September.
After a good start to the year, sales slowed following the JCK Show leaving jewelers with a backlog of inventory entering the holiday season. “It’s not reluctance on the part of the retailer; the consumer is not carrying through,” says Todd Wolleman, Color Craft, New York. “People are still cautious.”
While jewelers report fewer transactions, fewer people buying, they cite higher average ticket prices, says consultant Kate Peterson, president of Performance Concepts, Montgomery Village, Maryland. But she forecasts holiday sales for jewelry will end up ahead, as the country is on the tail end of the economic recovery, with greater self and nicer gift purchases expected.
Optimistic holiday sales will be up, Michael Lerche, president and CEO of Goldstar Jewellery, New York, expects year-end sales at least even but likely more than 2014. He notes that the stock market is up, wages are up, unemployment is low, and although world events have people on edge U.S. consumers historically are not frightened from shopping. “With the holidays upon us, we really won’t know how the year ended until the dust settles in January. If the holidays prove to be successful it makes up for any downturn. For the jewelry industry, the Christmas season accounts for 40-50% of overall sales. It’s still a big gift item.”
Make Your Mark
To standout in this tough market, jewelers of all sizes realize they need to carve their own niche with unique brands, collections and proprietary lines, says Robert Herskovits, MJJ Brilliant, New York. “Even the majors that have traditionally stuck to classic styles and were not especially brand-focused are paying more attention to developing special collections, and have been quick to pick up new trends in bracelet, earring and ring designs. With everyone fighting for commodity, they realize they have to differentiate. It’s a much more branded arena for retailers.”
Bridal remains No. 1, says Lerche, with diamond bridal the driving force in the jewelry industry. “Fashion diamond jewelry sales are soft, except for classic styles with a twist in pendants, studs and bracelets.”
For MJJ Brilliant, Herskovits cites new takes on timeless styles as bestsellers, like line bracelets that are flexible, bangles and cuffs in special tubing that can be manipulated. Also popular are ear crawlers and jackets, and new rings in open designs with negative space. Top sellers for the diamond jewelry brand Tache USA, says Valerie Fletcher, vice president of design and product development, New York, include: stackable bands, especially very skinny wave and twist looks instead of traditional straight bands; men’s rings, especially fashion forward looks; insert rings in stylish designs; crosses outsold hearts for the first time, both vertical and horizontal styles; and circle pendants are trending over triangles.
Two-stone jewelry will likely be the big winner for the holidays, says Lerche, thanks to Sterling’s new “Ever Us” national ad campaign. He believes the trend will expand beyond bridal to fashion—pendants, earrings and bracelets set with diamonds as well as color stones. Maren Pfister, merchandise manager, Ostbye, Minneapolis, Minnesota notes that in addition to sentiment and messaging, two-stone jewelry is compelling because the look is relevant and timeless.
Moreover, color has become an important category for jewelers to specialize in. Wolleman believes Pantone’s influence is significant across industries, especially in fashion and accessories, and as the ultimate accessory, fine jewelry set with gemstones will continue to benefit. He cites color a key growth area in bridal as well. “Color has the rarity factor, fashion connection, and personalized meaning—offering something for everyone.”
Wearable tech/smart jewelry will likely make a big splash for the holidays and be the category to seize in 2016. The Financial Times forecasted in a Nov. 5 article that wearable tech would be the big seller in the run-up to Christmas, thanks to a huge leap in public awareness about fitness trackers and smart watches. “Wearable tech has a future, particularly for independent jewelers,” says Liz Chatelain, president of MVI Marketing, Los Angeles. “If we don’t grab it and make it everything it can be, we’ll lose it to Best Buy. Curate a selection for your customers. It will get people in store, especially millennials.” Herskovits advises jewelers be early adopters as innovative companies are looking for partners. He cites women most interested in products that have fashion style and functions that help them get through the day (i.e. reminders, ways to stay in touch).
Chatelain also reports that millennials are open to man-made stones, a space to watch in 2016. “They like the idea because they don’t have to worry about where it came from and think the technology is cool. Millennials don’t have a history and romance with diamonds like their parents and grandparents.” Moreover, retailers can expect marriage equality to evolve wedding jewelry trends and traditions, says Rony Tennenbaum, designer of the “Art of Contemporary Love” brand, EMA Jewelry, New York. “With same sex marriage, new protocols are forming. There are new dynamics, new opportunities for diamond rings for brides and grooms.”
Grab the Business
Jewelers who know their customers, merchandise accordingly, and actively go after the business are succeeding in today’s highly competitive market. Peterson advises jewelers consider what they’re doing everyday to gather client intelligence to develop good, buildable customers.
Get smarter about your finances, inventory, and customer engagement, advocates Neil Shah, Shah Luxury, New York. “Use tools like the Edge to manage these aspects and learn from them. The No. 1 thing for jewelers moving forward will be connecting with consumers on an emotional level, and they need all the information they can get about their customers to succeed.”
Wolleman suggests jewelers curate customers’ jewelry wardrobes to see what they have and what they need. “Gain access to their jewelry collection—offer to clean it, fix it, see what’s missing, and help style them. Play a more active role in the collectible aspect and maintenance of their jewelry wardrobe.” Peterson advises sales associates become personal shoppers for their customers, to take the burden off them to make gift decisions and remember occasions.
Time is the most valuable thing a person can spend, says Danziger, who advocates retailers align their brand, products and services with consumers’ need for fun and recreation. “All things equal, consumers will shop online for the convenience. So, your in-store experience must offer them more than products to buy, but also an experience that will make their time spent worthwhile.”
To that end, Jay Gerber for WR Cobb Company, East Providence, Rhode Island advises jewelers leverage technology in store to provide a level of sophistication to the shopping experience. “Having accessible technology like a tablet or digital kiosk will not only create appreciation of your business, but also showcase your website and present your virtual inventory.”
A must for 2016, Chatelain stresses how critical mobile will be. “The growth of mobile has been rapid, from zero to one third of ecommerce in 18 months that’s substantial.” If you don’t have mobile access shopping as part of your ecommerce, she says you’re behind the times. Gerber notes that 40% of male and 33% of female millennials would buy everything online if available. “And, when they aren’t buying online, they’re researching products and companies, 60% of which is done on a company’s website.”