Consumers are getting both more cautious and more casual in their shopping as the dust settles after Covid-19.
After seasons of growth, the Covid-19 boom may be letting up, according to jewelry store owners. They report a slight slowdown over the summer compared with previous months, which is normal in most years but novel after last year’s strong showing. Still, bridal is strong, and the coming fall might be a good bellwether for setting post-coronavirus expectations.
Business is beginning to slow for Ted Koester, owner of Herzog Jewelers in Fort Mitchell, Kentucky. “[The] last two years, it’s been phenomenal for jewelry stores,” he says. “But the growth last year and a half or two years isn’t sustainable.”
With travel coming back, his customers are spending money on non-jewelry luxury items, so he thinks business is settling back into pre-pandemic numbers. “You have maybe a month that’s up, maybe a month that’s down. It’s no longer rocket-ship, back-to-back peak months. People are still spending money, but they’re a little more cautious, or they’re spending money in other categories besides jewelry.”
Jean Z. Poh has also noticed some changes. “Women are much more into pieces that can be worn every day,” says the CEO of jewelry brand Cadar, which has robust online and wholesale operations as well as a New York showroom. “The pandemic shifted people’s mind-sets about jewelry. Certain looks have gotten more casual, so we’re seeing a lot more everyday statement jewelry, rather than gala pieces.”
She points to “a larger emphasis on chunky gold pieces and statement earrings,” highlighting hoops and yellow gold among the summer trends. For fall and winter, Poh is seeing a shift toward lariats and pinky rings.
Engagement and gifting going steady
Diamond engagement rings are selling very well right now, according to Scott Sulli, co-owner of Sulli Jewelers in New York.
“Any size, any scale seems to be the most popular right now,” he says. Round stones comprise the majority of his business, followed by cushions.
He points to the pandemic as a reason for the increased bridal interest. “Everybody went through those years of Covid-19,” he comments. “It either made you or broke you as far as relationships. So people that persevered and made it through, that’s why you’re seeing an influx of engagements. There’s an uptick in engagement, and a lot of younger people shopping.”
Self-purchasing and gifting are also strong, Poh relates. “With the economic instability right now, people are leaning really hard into gold. Jewelry gets benefits from that. We see both self-purchases and men purchasing for their significant others.”
Spending is also starting to go up, with the median price point for Poh’s customers at about $6,000. “People are actually spending more on jewelry than they used to,” she says. “Like $20,000 or $30,000 for an everyday ring — not an engagement ring or a cocktail ring.”
That said, she is experiencing a drop-off in the lower price ranges. “Categories like $1,000 purchases — those customers will be impacted by any kind of economic instability, and so they might slow their spending a bit.”
The mood in the market
Sulli believes jewelry shopping may begin to soften as the economy shifts. “Depending on how the economy goes, people spend less money on jewelry,” he says. “It’s not a necessity. People still get engaged, but they might scale down.”
Cryptocurrency fluctuations have also been a factor, adds Poh. “There was a lot of crypto money floating around, and that really boosted shopping and consumerism in general.”
Online sales are a big part of her brand’s strategy, she continues. “Now that the crypto market has taken a hit, sales might be a tick more conservative for the third quarter. But I can’t really make a prediction in terms of large swings.”
People in the upper middle class and higher income brackets are still spending, according to Koester.
“People who have money, have money,” he says. “People who don’t have money, don’t have money. I do think Christmas and the fourth quarter this year will have lower traffic and a lower price point, but I don’t think it’s going to be gloom and doom. People are going to spend less money on an average ticket than they did the for last two years.”
Increased travel is also taking a bite out of jewelry sales, he suggests. “I know people during Covid-19 who bought a $15,000 or $20,000 ring because they canceled their trip to Hawaii. This Christmas or next year, they’ll spend that $25,000 on a trip rather than a ring or a pendant.”
By the numbers
- Fancy-color diamond prices for the second quarter were up 0.8% compared with the previous three months, and 3.1% year on year.
- US jewelry sales grew 19% year on year in July, and were 109% higher than in the same month of 2019.
- July e-commerce spending in the US rose 21% year on year as shoppers shelled out $73.7 billion online. Still, that figure was 1% lower than June’s total and 6% below May’s.
- Swiss watch exports climbed 8% year on year in July to CHF 2.22 billion ($2.32 billion), with shipments to the US increasing 14% to CHF 323.3 million ($338.8 million).
- The number of active US jewelry companies continued to decline in the second quarter, with 161 businesses shuttering compared with 143 a year earlier.
Sources: Fancy Color Research Foundation (FCRF), Mastercard SpendingPulse, Adobe, Federation of the Swiss Watch Industry, Jewelers Board of Trade (JBT)