Specialty Jewelers Losing Share

This is reposted article published in JCK online magazine

millenial-shoppers-1By Rob Bates, News Director
Posted on March 23, 2015

Specialty jewelers are seeing their share of the market shrink, as other channels like online and mass merchants grab a larger slice of the pie, according to a new study of the U.S. diamond market from analyst Edahn Golan.

The report, which can be downloaded here, finds that in the last two years, specialty jewelers—defined as both independents and jewelry chains—held a 43 percent share of the market, compared to around 50 percent in the 1990s.

“The loss of market share is a long-term trend,” says Golan. “If you look at it on a year-over-year basis, sometimes there is good news because the market share improves. But on a long-term basis, you see specialty jewelers losing market share.”

Based on Jewelers Board of Trade and Census Bureau statistics, Golan calculates that the number of jewelry stores dropped 2.1 percent over the last year and has fallen 21 percent since 2007.

Despite this, he feels that independents still play a valuable role in the market.

“I would much rather go to a store where I know the owner and I can talk to them and I can go back three four years later and they know my name,” he says. “To me that’s worth a premium. The question for the independents is: How do they offer special service and make sure customers know that it’s there?”

The study also finds that millennials (defined here as ages 25 to 34) are now the predominant force in the jewelry market, spending an average of $786 per household, 28 percent more than other groups.

But they have different tastes than other buyers, Golan says.

“The trend is: Same but different,” he says. “Millennials may want an engagement ring, but it won’t necessarily be a diamond or a big center stone. It may have a different setting. It’s important retailers recognize they are catering to a group with different needs. But if they do cater to them, they will get their business.”

Other noteworthy facts from the report:

– The holiday season is still the most wonderful time of the year for jewelry sales, though its importance has lessened (a bit). In 2014, it accounted for 26.4 percent—about a quarter—of all industry revenue. Between 1992 and 2007, it averaged 32 percent—about one-third—of jewelry sales.

U.S. fine jewelry sales totaled $68.8 billion in 2014, a 1.4 percent increase over the prior year, and a record.

– Watch sales did better last year, hitting $9.13 billion, a 7.7 percent jump.

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Bringing the Emotion Back

March 13th, 2015 published in “The JA Report”

I think this is a great article that was published in the jewelry industry online magazine, The JS Report, about changing trends in bridal.

The State of Bridal Jewelry Today

EngagementRing_1461385c

How do you reach the millennial bridal customer? That was the question posed to jewelry industry bridal experts during a panel at Women’s Jewelry Association’s In The Know Conference on March 10. The experts included: Phyllis Bergman of Mercury Ring; Miriam Gumuchian, of Gumuchian; Jenny Luker, Platinum Guild International; Amanda Elser, editor at The Knot.

“The concern that I’m hearing all over the industry is that we’ve taken the emotion out of bridal and replaced it with numbers and made it a commodity. We are at a critical time in that we have to bring back the emotion.”

There Is No Denying Social
Millennials shop for bridal on a different way, on social and sharing/hinting to their partners. The consensus for the entryway to bridal jewelry is Pinterest. Elser describes it as “sneaky” — with leaving screenshots, pinning photos, tagging things on Instagram so their friends and partners can see. She likened it to the modern version of folding in corners of magazine ads and photos for boyfriends to see.

Gumuchian agreed: “The millennial doesn’t give a s*** about ads,” she said. “It is more important to see what the acting world, singing world — celebrity is wearing.”

Luker noted that PGI is focusing on experiential websites and media, because younger consumers want to experience a product and the feeling behind it.

The way jewelers can get in on the new media platform to grab younger customer attention include:

  • posting on social media, like Facebook, Instagram and Pinterest
  • featuring a CRM program to followup with customers who come into the store to browse and may not purchase in that visit
  • following trends and featuring “non-traditional” bridal
Men Still Shop In Store
The retail store still plays a very important role. As Bergman explained, the retail store provides affirmation that the customer is selecting the right ring and answers their questions. While the bride investigates and creates wishlists online, “the groom goes into the store” said Elser.What Sells & What Is Trending

  • Yellow and gold metal are coming back, but consumers always go back to classic according to the panelists. Classic styles are still what sells, both Bergman and Elser agreed. But there is a need to sell unique designs within the classic settings.
  • An example of trends within the classic category is stacking wedding rings or mixing and matching metal tones — yellow and white — for the engagement and band.
  • Baguette cuts
  • Vintage rings are a trend The Knot is seeing. “Because there is meaning,” explained Elser. “[Couples] love that story behind the ring and that talking point.”
  • Personalization is also very important to younger customers.
  • For second marriages and beyond, the consensus was that rings are bigger and more ornate or intricate designs.
  • When asked about synthetic diamonds, Bergman spoke about how it is a great concern to sellers of natural diamonds. She emphasized that it is going to help bring back the emphasis on the story and the precious origin of natural diamonds.

Retails trends that could change the way you sell jewelry

Anti brandJWT intelligence reported emerging trends to watch for in 2015. JCK reporter, Rob Bates, does a great job in relating these trends in his JCK blog post that I repost here:
8 Retail Trends That Could Change Your Business

By Rob Bates, News Director
Posted on January 20, 2015

From nonbrands to BuzzFeed retail, technological advances and changing demographics could shake up how jewelry is marketed and sold in the coming year, according to JWT’s annual trend report.

Among the trends Lucie Greene, worldwide director of JWT Intelligence, sees as possibly affecting the industry:

The rise of the high-level affluent woman.

What Greene calls the “Arianna Huffington generation”—women in high-level positions who prioritize their careers—will eventually change how luxury goods are marketed and purchased.

“There are women reaching high-level management, even in emerging markets like China,” she says. “The impact on luxury is quite interesting. Jewelry is typically being marketed from men to women for occasions. But when you have women shopping for fine jewelry, the language and also the category needs to change.”

She finds that the “very expensive men’s watches that are usually aimed at male buyers are now being marketed to women.”

Celebrating singles.

Looking at demographic data, more and more Americans are deciding not to marry.

“The future is really singles, and that is across all different age groups,” she says. “The highest divorce rate in the U.S. is the over-50s. That is being led by China, and its famous Singles’ Day, but also it is starting to be adopted in the U.S.”

Being single is no longer looked at as being isolated and lonely, she says.

“Now single is considered being very social,” she says, adding that she is seeing much more self-spending on traditionally gifted luxuries.

Entertainment merging with retail.

“With the advent of Internet-connected television, entertainment and gaming is all becoming online and interactive,” she says. “That makes it seamlessly linked to commerce. A lot of retailers are using entertainment as a way to engage consumers. Amazon, one of the biggest e-tailers in the world, is producing original entertainment. To me, the next step is to make it very shoppable.”

She says that apps already exist that can let you buy products that appear on-screen.

Brick-and-mortar are now more about the brand experience.

Many physical retailers are now demonstrations of the brand experience, rather than places to shop, she says.

“Stores are becoming Disneyland,” she says. “It’s all about the entertainment. Lululemon is hosting yoga classes where they sell their items. Apple is hosting Q&As with creatives who use the iPhones. [U.K. department store] Selfridges has its fragrance lab where you go into a darkened room and they take you on this journey. Stores are just becoming places to hang out. With mobile, at this point, it doesn’t really matter where the transactions take place, as long as they take place.”

A change in how retailer space is used.

With online likely to keep cutting down the overall number of stores, many traditional retail-only malls are now becoming “mixed use,” with space for offices, pop-up stores, cultural events, even residential housing. Meanwhile, urban outlets are becoming “fewer but more massive,” Greene says, to offer more immersion in the brand experience.

BuzzFeed retail.

BuzzFeed is the site known for quizzes like, What kind of cat are you? As consumers continue to seek out personalized products, some e-tailers are using similar quizzes as a way to increase user engagement and offer customized items.

“Anti-brands.”

“We are seeing in our data that millennials are rebelling against the idea of fashion trends,” Greene says. “The trends have become relentless and overexposed.”

That is why fashion is experimenting with “genderless fashion” and “anti-brands,” which pride themselves on not advertising.

“[Eyeglass brand] Warby Parker says, ‘We haven’t spent a lot on advertising,’ ” she notes. “That is really resonating. Right now, consumers can find information about any brand. There is this awareness of how much sunglass producers are paying for their license. Warby Parker is really the antidote to that.”

Another example: Everlane, a clothing e-tailer which states up front how much margin is being made on each item, as well as where all the items come from.

“It’s a way of demonstrating complete transparency,” she says. “People are skeptical today when it says Italian leather, because it isn’t always from Italy. So not only this is more responsible, but it’s a good way to demonstrate your item’s quality.”

Luxury on mobile.

While this sounds obvious, Greene points to data that 40 percent of luxury brands have minimal or no online or mobile presence.

“There is now no upper limit to how much any luxury consumer will spend on their phone,” she says. “You have $3 million transactions going through the Christie’s app. E-commerce for luxury is the new emerging market.”

Tiffany Debuts First Same-Sex Ad

530x343xtiffanyTiffany and Company is keeping it relevant with the first national print ad featuring a same-sex couple. Bravo Tiffany!

Here is an article in the jewelry trade magazine JCK. http://preview.tinyurl.com/n2p97v5

Recycled diamonds

The recycling of second hand diamonds has become a big business! I know in my store, the prices of diamonds from cutters and dealers has become too much for many modern engagement customers. I have been buying and selling second hand modern diamonds as well as old mine cut and old european cut diamonds for years.

A world market in second hand diamonds has emerged and is growing rapidly! There is a large selection (called a tender in the diamond trade) will be auctioned early next month in New York by White Pine Trading.

“We afford buyers a large-scale platform featuring a broad assortment of diamonds, and we consolidate large quantities of goods and allow buyers to bid solely on what they want to purchase,” said White Pine Trading LLC CEO Benjamin Burne.

“[S]ellers will have the opportunity to leverage the depth of our experience, as we offer advice and sorting services designed to help maximize value. Additionally, we will actively work to qualify buyers that will pay sellers competitive industry prices.”

As reported On INEX website, In his 2011 diamond pipeline, industry analyst Chaim Even-Zohar estimated that recycled diamonds sold back to the jewelry sector came to about $1 billion last year, which represents 4.4 percent of all polished diamonds sold at polished wholesale prices.

White Pine buys recycled, polished diamonds of all sizes and grades, either loose or in second-hand diamond jewelry. It re-polishes chipped, damaged or poorly cut diamonds, which it then either uses in jewelry or offers for resale.

It is harder work for retail jewelers to find the most popular shapes, sizes and cuts in second hand diamonds, but when available, these diamonds can represent the only great deals in the industry!

Bravo to Tiffany’s!

I was in NYC earlier this week and had a chance to take a look at Tiffany’s new metal, Rubedo. The sale clerk identified the metal as a combination of silver, copper and gold. The price points that they are achieving suggests that is more silver and copper than gold, but is it ever beautiful. A bold statement in rose color and a sterling price point. Well done Tiffany! You get my “Keep it relevant” tip of the hat!!!!

Why Diamonds Are A VC’s New Best Friend

The following article is re published from article released by “Business Insider”

http://www.businessinsider.com/online-jewelry-industry-booming-2011-7

If in 1999, investors weren’t convinced that shoppers would buy a diamond ring online, the gleam is certainly in their eye today. eCommerce has been one of the most active segments, with 67 merger and acquisition transactions topping $6 billion thus far in 2011 vs. $180 million in the same period in 2010 according to investment bank Petsky & Prunier.

Within eCommerce, one of the segments which is gaining traction and investment favor is jewelry. Since late 2010, Gemvara, Stella & Dot, Baunat and BeachMint have all secured major funding rounds ranging from $4 to $40 million. And jewelry is an active segment in the fast-growing fashion flash sale business which includes such heavily funded websites as the Gilt Groupe, which recently raised $138 million, Beyond the Rack, Hautelook, Ideeli, Modnique, Rue La La, and My Habit.

The VC funding activity in jewelry is supported by research from Forrester, which includes jewelry as one of the fastest growing eCommerce segments through 2014. As a product category which initially started slow online (when compared with books for computer equipment), jewelry is now enjoying strong growth for several reasons:

Increased Shopper Confidence: Twelve years ago, investors were skeptical if shoppers would flock online to buy big ticket items. But the growth of eCommerce since the late 1990s has proven that consumers will buy anything online which they used to buy in-person. Through mechanisms like merchant reviews and based on an overwhelmingly positive shopping experience, shoppers, who first dipped their toes into online commerce with the purchase of a book or a T-shirt are now willing to place their trust in online merchants in the same way they trust a local shopkeeper.

Customization: A big benefit for online jewelry retailers versus local jewelers is the ability to create customized jewelry based on shopper requests. With most local jewelers buying directly from a few wholesalers, they usually don’t have the design and manufacturing contacts to create and manufacture customized jewelry. Furthermore, a one or two store operation usually lacks the scale in order to make such an operation profitable, and the wholesalers who supply their jewelry are focused on selling existing (and not customized) jewelry through their pipeline. For an online jeweler, customization can be a point of differentiation around which the company was developed. And in the same way that local jewelers historically built their business by knowing the tastes of their local clientele, online jewelers have established their businesses based on the ability to source jewelry from a broad range of international suppliers to improve cost efficiencies and create product differentiation.

Product Selection: As with customization, product selection is another area where local jewelers face challenges when competing with online jewelers. All an online jeweler needs to do to add a new product is to upload a picture and description of the product. A local jeweler, on the other hand, must physically obtain the product and then merchandise it in-store. The ease in which new products can be added and removed enable online retailers to add and then tweak entire product lines with ease, facilitating much more fluid merchandising opportunities. This issue is magnified when it comes to loose diamonds. Online stores can hold a virtual list of diamonds, thus enabling them to exhibit tens of thousands of loose diamonds for sale. Needless to say that no brick and mortar store can hold such inventory.

Improved Product Displays: In 1999, most online shoppers accessed the Internet through a dial up modem. Today, with almost all shoppers using broadband Internet,and advancements in 3D imaging and graphic displays, shoppers can really see how the ring or necklace will look.

Better Customer Service: One of the reasons for the improved shopper confidence is undoubtedly the improved customer service. In 1999, most shoppers had to log off an eCommerce website and their dial-up Internet service in order to free up their phone line to make the phone call to call customer service, if the website even published a number to call. Today, most online retailers offer shoppers a range of options, including real-time chat, FAQs and toll free numbers to customer service, all available 24/7, and often in several languages. Along with these pre-shopping services, online shoppers also benefit from free shipping from many online retailers on many items, and very liberal return policies.

Though social and mobile shopping applications are also helping all online retailers, including jewelers, it’s the aforementioned improvements in online retailing which are driving the newfound interest and investment in online jewelry companies. Yes, Ms. Monroe certainly had it right, but watch out girls, diamonds just may be an investor’s new best friend.

Read more: http://www.businessinsider.com/online-jewelry-industry-booming-2011-7#ixzz1SVJVK14f