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New year, new sales goals! Let’s uncover the latest jewelry retail trends to watch for this year to fuel your sales growth.
But first, how’s the jewelry industry this year?
The global size of gems and jewelry is expected to grow with a CAGR of 1.9% over the forecast period of 2020-2025. Further, the outlook for the diamond industry remains positive despite the ongoing challenges of geopolitical instability and the lack of support for lower-end brands, among many others. The Bain & Company, in its Global Diamonds Industry 2019 report, expects 2020 to be somewhat a positive year for the industry, especially if jewelers re-design their operations based on the positive trends of heightened demand for transparency and social welfare.
Nonetheless, online sales channels are continuously growing, jewelry e-commerce is moving quickly, especially in China and the USA, and marketing spending is dramatically increasing. But are jewelers spending on the right investments?
This year, spending on business infrastructure that does not support the sales goal of the company should be eliminated so you can divert the finances and energy toward decisions and strategies that do. Adapt or die, they say.
One of the ways of ensuring this alignment is keeping up with the jewelry retail trends. Shift away from what’s out and embrace what’s in to keep your products and brand the center of your customer’s attention. The jewelry retail trends may change annually or get modified as innovations and technology as well as your customers’ preferences are never stagnant. Let’s see what this year has in store for jewelers like yourself!
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5 Jewelry Retail Trends to Watch This 2020
1. A heightened focus on sustainability, transparency, and the environment
The issues of transparency, environment, and sustainability have been circulating for some time now. In fact, Martin Rapaport tackled this in his ‘Synthetic Ethics’ talk at the annual Rapaport Breakfast at JCK 2019. There, he discussed the good side and the bad side of lab-grown diamonds including the steps that the natural diamonds industry should take to counter the invasion of lab-grown diamonds.
As a natural diamond jeweler, you probably already know the impacts of lab-grown diamonds on your sales, but if you’re still wondering if it would really hit you, yes it will, as younger jewelry consumers have long been demanding ethically sourced, environmentally responsible, and transparent trade practices. As a matter of fact, it’s not true that millennials killed the demand for diamonds. They are still buying; they’re just not buying the way you expected them to. A 2019 Lab-Grown Diamond Consumer Research by MVI Marketing revealed that 70% of 1,000 polled consumers said they would consider buying lab-grown diamonds not only because of the cost but also because they believed that by doing so, they are helping save the earth and advocate social justice for indigenous laborers.
As a response to this trend, jewelers can adopt practices
that promote transparency and traceability. For example, acquiring traceability
programs or technology to express and evidence efforts to be transparent.
The blockchain system is the gold industry’s solution to this demand for transparency. It works with strict supply chain cooperation, which when done procedurally would allow traceability of supply from the mine to the consumer. The challenge here lies in the simplification of the process to make it efficient and less time-consuming.
Overall, transparency could increase the confidence of your consumers, especially those who are willing to invest in the value of natural diamonds but are put off by the possibility of unethical practices.
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2. The rise of self-purchasing females
We’re all for girl power!
Long before this trend arrived, Beyonce (and the rest of Destiny’s Child!) had been singing about women’s economic independence, so this trend is very much welcomed.
Question: tell me what you think about me? I buy my own diamond and I buy my own rings…
Independent Women, Destiny’s Child
Yes, more and more women are buying their own diamond and jewelry pieces. MVI Marketing’s Luxury Self Purchasing Female (SPF) Study Report 2020 revealed that 14% of high-income self-purchasing females (1/3 of 1,011 polled participants) spend more than $6K on jewelry or watches while only 13% of them buy rings for themselves. This figure is considerably low compared to the 25% of the other SPFs from different income brackets who spend on rings for themselves. Overall, the study showed that the majority of the SPFs spend over $400 on jewelry.
There are different reasons why these women buy jewelry for themselves. See below.
- To reward themselves for achieving a goal
- Just because
- It’s their birthday
- A holiday present
What this trend shows us is a major shift in motivations for jewelry purchases. Right now, it’s not only solely focused on relationship milestones, but it is also evidence of stronger female economic independence. Such a trend could be attributed to other factors like late marriages and the reverberating theme of self-love and women empowerment.
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3. Branded vs. non-branded jewelry retailers
The competition between branded and non-branded jewelry retailers is said to be getting stiffer and stiffer this year, especially with the shift from developed to developing economies. For example, Brazil, China, India, and UAE among many others would be the most relevant to the industry now and in the coming years. Jewelry consumers will come from these emerging economies and because these consumers are accustomed to brands and would highly likely lean toward luxury brands, they will dictate the competition between the two retailers. In fact, luxury brands have been bullish on the retail of watches, accounting for 60% of the sales in the watch market, but McKinsey & Company analyzed that branded jewelry would rise from 20% to about 40% of sales this year.
Monobrands like Pandora benefit from this trend because they already have an established brand identity and consumer trust; however, non-branded jewelry retailers, don’t despair. Find a way to differentiate your brand from others and stick to that. Establish your own identity, offer unique, well-curated products that capitalize on local pride, and take advantage of different marketing channels.
4. The shaping up of internationalization and consolidation
If you’re an independent jeweler, you’d likely hold your own in this dynamic and fast-growing industry as long as you’re able to capture not only the attention but more deeply, the hearts of the local consumers, you have a healthy balance sheet, and you know your brand. However, those who would need more than these or lack any of these might find themselves exploring more options to stay afloat.
In consolidation and internationalization, the industry will see more international brands/groups acquiring smaller businesses, local and independent jewelers, or core players consolidating. In fact, industry experts, as McKinsey & Company reported, observed that the ten largest jewelry groups would double their market share this year by simply acquiring small local jewelry retailers.
Late last year, we saw how Paris-based LVMH, Bulgari owner, has agreed to buy Tiffany & Co. at $135 a share amidst the latter’s declining profits and annual sales in China and the USA. LVMH’s acquisition of the American luxury jewelry icon, would expose the former to the diamond and branded jewelry category and would provide them with more access to American luxury consumers.
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5. Multichannel marketing
This year, marketing efforts are expected to get more extensive than ever with jewelers and marketers alike adopting multichannel platforms to share brand and product information, attract attention through visual presentation, establish brand identity, and strengthen customer relationships.
In fact, having just an online presence is no longer enough as jewelers start to extend their operations by putting brick-and-mortar stores. As discovered, jewelry consumers still prefer tactile experiences when shopping for jewelry due to unresolved trust issues. However, incorporating digital media into their shopping experience gives more edge to jewelers. After all, consumers are, first and foremost, turning to the internet to research the product. McKinsey reported that two-thirds of their polled participants admittedly resort to online research before heading to the store while two-thirds use social media for advice and information. Indeed, the online world has become their primary source of information.
Reconfiguring the way you approach multichannel platforms is critical to the success of your sales and marketing team. This is because, to bring foot traffic to your jewelry store, you must first romance consumers online. Woo them with your studio-quality jewelry images and videos so they feel compelled to see the piece in the flesh. Showing them poor-quality jewelry images and videos would make you lose shoppers in a matter of seconds, especially when options abound online.
These jewelry retail trends convey more demanding customers
and competitive competition. And these are reasonable demands that jewelry
retailers should embrace to better position themselves in the competition. Take
the challenge and go back to your brainstorming sessions.
What other jewelry retail trends have you observed? Let us
know in the comment section below!