After a landmark year in 2021, independent jewelery retailers faced the difficult task of navigating the murky waters of economic uncertainty, supply chain dilemmas, and ever-rising costs of living.
The annual goal-setting call, a tradition for many companies, has become a forum for voicing concerns and speculating about the industry's future amidst such turmoil.
But revisiting those conversations now in early 2023 and 2024, with easing global recession fears, slightly lower interest rates, consistently low unemployment, and budding consumer growth, , a pattern of cautious optimism has emerged. Confidence.
So what does this mean for retail so far in 2024? January was a mixed bag for independent jewelers.
Despite a 5% decline in unit sales, total sales increased 1% as average retail sales increased 6%.
This mixed performance prompts a deeper look into the decline in sales, as this trend predates the pandemic and is expected to normalize marriage rates and diversify consumer spending after the 2021/2022 “overcorrection”. It may be related to
The strategic shift to higher-priced products appears to be a sign of hope, allowing jewelers to maintain, if not surpass, previous year's peak sales.
The diamond sector, considered the heart of the industry, experienced its own fluctuations in January.
Although the number of units sold for the month fell slightly by 3%, average sales prices increased by 4%, ensuring a moderate growth in total sales of 1%.
Notably, the diamond bridal segment, which includes full diamond engagement rings, semi-mounted, loose diamonds and diamond wedding bands, shines, with an expected 2% increase in unit sales and 1% increase in total sales. This is probably an omen. There is renewed consumer interest in both natural and lab-grown diamonds.
Engagement rings and diamond bracelets, in particular, outperformed the rest of the diamond sector, posting strong total sales growth of 14% and 15% respectively, a testament to their timeless appeal.
Unfortunately, the month was not encouraging for all categories.
Diamond loose total sales decreased by 7% in January, but unit sales increased by 6%. Average retail sales fell by 12%.
Pearl jewelry also faced hurdles, but some retailers managed to offset the decline in unit sales by increasing average selling prices, resulting in a 1% increase in total sales.
Both colored stone and sterling silver jewelry have struggled to maintain their positions in the face of changing consumer tastes and spending priorities.
Meanwhile, the market for precious metal jewelry (platinum or gold, without stones) remained relatively flat in January, with a 4% increase in average retail prices offsetting a 4% decline in units sold.
Fashion rings made from precious metals emerged as the standout category, with sales increasing by an impressive 27%. Along with this, the number of units sold has increased by 8% and the average retail price has increased by a staggering 18%, highlighting its growing popularity and value in the market.
Watch sales increased by just 1% in total sales, with a 9% increase in average retail prices offsetting a 7% decline in units sold.
Custom jewelry gained traction, with sales up 86% and average retail price up 95%.
Overall, service revenue increased 42% despite a 5% decline in unit sales.