Consumers Getting Cost-Conscious

November 29, 2022  |  Lara Ewen

Retailers hope lab-grown and colored-gemstone purchases will offset inflation woes over the festive season.

Jewelers expect solid sales for holiday 2022, albeit not the earth-shattering numbers they saw in the previous two years. Concerns about inflation and a possible economic downturn may lead shoppers to spend less, they say, while lab-grown diamonds and colored gemstones may help ease sticker shock.

Holiday prep

Some store owners started their December preparations as early as October. Among them was Steve Samaras, president and owner of Zachary’s Jewelers in Annapolis, Maryland. Even so, he’s only seen a few early holiday shoppers.

“Historically, the season really doesn’t get rolling until the last couple of weeks of December,” he comments, adding that he expects the end of the year to be busy. “We’ve had a fantastic year in 2022. We’re already up over 2021, and that was our best year ever.”

Nicole Black also expects a robust holiday season. She and her husband Ken co-own Philadelphia Diamond Co. in Philadelphia, Pennsylvania.

“We had a great year in 2020,” she relates. “A lot of people in jewelry did well. And 2021 was even better than 2020. And right now, we’re a bit ahead of last year.”

Black, whose business is mainly engagement and wedding jewelry, says holiday sales only account for about 25% to 30% of her annual revenue, and business is steady throughout the year.

“In November, when everybody is starting to think about the holiday season, there will be a lot of gift buying,” she elaborates. “Closer to Thanksgiving, we’ll contact people who are our clients, and people will start contacting us about custom jewelry and special pieces for the holiday season.”

In Madison, Wisconsin, John Hayes was still finalizing his plans in early November.

“We’re actually scrambling to figure out [the holidays] and what we want to do for promotions, because it’s going to be here too soon,” admits the owner of Goodman’s Jewelers. “We’ll do heavier social media, and we just got three new radio spots to use for the holidays. Then there’ll be a couple of print publications that we put holiday-themed ads into, geared mostly toward women. We put some goodies in there to try and entice women to come in and get their husbands to come in, or come in and self-purchase.”

Hayes’s shoppers tend to wait until the last minute. “We typically don’t get really busy until the last 10 days of the heavy season,” he elaborates. “But we have a few people put things on special order or on layaway.”

Diamonds remain a holiday mainstay for Samaras, who says it’s been a good year for selling stones in the 3- to 6-carat range for anniversaries.

“I also can’t believe how many 2-carat diamonds we’re selling to first-time engagement people,” he remarks, adding that fancy-yellow and pink diamonds are also doing well.

“But we’re primarily white diamonds,” he adds. “And no lab-grown. I haven’t taken that leap.”
In contrast, Black has found that lab-created stones are popular with her clients.

“We’ll see solitaire earrings upgraded from 1 carat total to 2 or 2.50 carats, especially because of the price point with lab-grown,” she reports, adding that tennis bracelets and chokers — in both mined and lab-grown — are strong for the holidays.

Hayes, who has expanded his lab-grown offerings, expects these stones to appeal to price-conscious customers.

“We’ve had pretty good acceptance of lab-grown diamonds,” he says. “It’s amazing how much size and quality you can get.”

His holiday sales will likely also include earrings and colored gemstones.

“Bridal is still the strongest, but there’s been more interest in color this year than in quite a while, especially in purple and blue [stones],” he says. “Color covers a nice price range for people. You get a look that’s impressive, but not terribly expensive.”

Year-end forecasts

Samaras predicts a strong holiday period. “We’ll probably get through 2022 without it having too much of an effect on us, but we’re expecting a bit of a downturn in 2023.”

The economy is on Black’s mind as well. “There are some early indications that the economy is slowing, and when it does, luxury goods just get hit,” she says. “But I don’t think the bridal sector will be hurt, because people still want to be engaged.”

This year’s demand may not hit 2021 levels, says Hayes, but he still anticipates a good December. “I’m optimistic. I think we’ll be maybe not quite as strong as last year, but last year was exceptional.”

By the numbers

  • Some 152 US jewelry businesses closed during the three months that ended September 30, compared with 113 in the same period a year earlier.
  • Americans will buy an average of nine presents for their loved ones this year, compared to 16 items in 2021. However, in total, the outlay on gifts, non-gift purchases, and experiences will remain flat at $1,455 versus $1,463 last year.
  • Retail holiday sales will increase 8% this year, above the 10-year average of 5%, according to Bain & Company.
  • E-commerce sales in October were up 11% from September at $72.2 billion, and were on par with the $72.4 billion of October 2021, even with the growth of inflation.

Sources: Jewelers Board of Trade (JBT), Deloitte, Bain & Company, Adobe


Consumers Getting Cost-Conscious

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