Record Spending on Jewellery
In 2014, jewellery and watch sales totalled $78.08 billion, up 1.5% from 2013, according to preliminary figures. Specialty jewellery retailers posted a 1.1% increase in sales, to a record $33.61 billion in 2014. In 2014, overall fine jewellery sales in the US totalled $68.8 billion, rising 1.4% year-over year. Watch sales increased 7.7%, to $9.13 billion in 2014. These figures are a modest improvement over 2013, a year of above average growth in fine jewellery and watch sales at both specialty jewellery stores and general merchandisers. In 2013, watch and jewellery sales improved 6.3% from 2012, and forte jewellery retailers witnessed a 7.8% increase in sales to a record $33.25 billion in 2013. The performance of jewellery and watches has outdone inflation, most other retail sectors and even the US economy in 2013. So while jewellery sales have continued to grow in 2014, hitting yet another record level, the rise in jewellery demand has weakened, and the rate of growth has slowed from 2013.
Sales Decline Holiday
Overall jewellery sales in the US market totalled $21.75 billion during the November– December Holiday Season, a decrease of 1.4% compared to the January–November period of 2013, and sales by specialty jewellers decreased 4.7% in the period. A reason for the decline seems to be a shift in purchasing habits. More jewellery was purchased throughout the year, somewhat de-emphasizing the importance of the holiday season for jewellery sales. This has large implications for jewellery retailers.
Average Spend on Jewelry
On average, each US household disbursed a record $612 on fine jewellery and luxury watches in 2013, with overheads on fine jewellery alone averaging a record $434 per domiciliary. While total expenditure is growing, expenditure per item is not keeping pace resulting in a trend of buying more for less.
What Jewelry Are Consumers Buying?
Diamond jewellery, due to its higher price and continued popularity, is the largest jewellery category, as measured by revenue. According to the annual Cost of Doing Business survey by Jewellers of America, 37.9% of sold merchandise is diamond jewellery, with loose diamonds the second largest category with 16.5% of sales. Together, diamond jewellery and loose diamonds constitute more than half of retailers’sales.
High-profit stores place a great emphasis on diamond jewellery and loose diamond sales. At these stores, the two generate 57% of their revenue. At stores with small turnover, diamonds and diamond jewellery are still the most important revenue drivers; however, other sources, such as repairs, are more dominant revenue streams.
Diamond jewellery and loose diamond sales represent less than 42% of revenue at stores with annual sales of up to $1.8 million. This indicates that to improve profitability and turnover, it is important to increase diamond sales. At high-turnover stores, those with more than $5 million in business annually, watch sales are an especially important component of their product offerings, representing 27% of their revenue stream.
Diamonds are an important component of the jewellery business, and retailers not only keep diamond jewellery on hand, but loose diamonds as well, mainly, but not entirely, for their bridal offering. Loose diamonds are also used to replace diamonds that are lost from jewellery items and for upgrades. It’s not uncommon for customers to be interested in replacing a diamond set in a loved jewellery item, such as a ring, with a nicer or bigger stone.
A high volume of loose polished diamonds traffic through the United States, with only some of them remaining in the country. In 2014, the US imported $24.16 billion worth of loose polished diamonds at an average value of $2,023 per carat (p/c). Yet, $20.93 billion worth of polished diamonds were shipped, leaving a net of $3.23 billion worth of polished stones in the country.
The 2014 figures are an increase over 2013 when $22.81 billion worth of polished diamonds, carrying an average value of $1,852.61 p/c, were imported. Net polished diamond imports were $3.71. By cultured import value, Israel is the largest basis of polished diamonds imported into the US, with $9.25 billion in 2014. India is the second leading source with $7.68 billion, followed by Belgium, with $4.0 billion.
Together, these three countries were the source of nearly 87% of gross polished diamond imports. The on-going 13% of imported polished diamonds derived from 70 countries, most of the shipped goods with an estimated total value of less than $100,000. Even though US approvals on Zimbabwe, the US imported 231 carats of polished diamonds from there worth $3,204.