The latest figures this month showing a decline in the number of active U.S. jewelry companies provides a snapshot of what is happening in the critical American market. Although only 226 businesses closed in the second quarter of this year that ended on June 30, according to the Jewelers Board of Trade (JBT), it was nonetheless a rise of 30% from the year earlier period.
Overall, the figures showed that there are 22,760 jewelry companies active in the US, which is a drop of 3.6% compared with the second quarter of 2023, and down 20% on the previous quarter.
Although the figures are not dramatic, the global diamond and jewelry market pays close attention to what’s happening in America, the most important single player on the global scene.
For many players in the diamond and jewelry industry around the world, the US market is by far the most important and the one on which they concentrate.
The size of the US jewelry market
Figures from various sources put the size of the American jewelry market at around $73 billion in 2023. Rings, especially for the bridal market, comprised the largest part of the U.S. jewelry market at around 40% in 2023.
The decline in the value of US jewelry sales as a share of the global market over the past decade or more has been significant. Certainly, up to the early 2000s, it was estimated to account for close to 50% of worldwide sales. But, as other markets have grown – especially in China – the US has seen its share fall to approximately to 21% as of last year.
The figures for 2023 were likely hit by high inflation in the United States which pushed up prices for jewelry – and all other consumer goods – while simultaneously reducing available purchasing power.
The low and low-medium price range of $1,500-$5,000 accounted for around 33% of total sales value last year, according to Tenoris research. It is perhaps the most stable part of the American retail jewelry sector with both unit and retail value sales declining by less than 1% over 2022, according to the company.
The lower end of the market – in the $750-$1,500 price range – saw the biggest fall in sales with a sales decline of nearly 6% - in an indication that inflation was a major factor for buyers at the lower end of the market. Meanwhile, the $5,000-$10,000 price range – which accounts for 14% of retail sales – posted a decrease in sales last year of close to 3% in both units and value, Tenoris said.
Signet Jewelers sees decline in ranking of top 100 US retailers
A more unusual indicator of the state of the US jewelry market came with the announcement by the National Retailer Federation (NRF) of its list of the top 100 US retailers.
Signet Jewelers, by far the most important American retailer (which also has chains in Canada and the UK), fell to 67th after rating 56th last year, according to the NRF, which provides a ranking of companies based on annual sales.
Signet Jewelers was the only jewelry retailer to make the list and the figure for this year is one place lower than the 66th position it reached in 2022. Among the brands that the company owns are Kay, Zales, Jared and James Allen. Its 2024 ranking is an indication of the American economic situation. Although the stock market has done well and salaries are rising, high inflation has eaten into consumers purchasing power leaving less appetite for luxury items such as diamonds and jewelry.
The decline in Signet’s standing is also in line with a 7% drop in its US sales in 2023 to $7.21 billion in worldwide sales and $6.53 billion in revenue from its American operations. By way of comparison, the company recorded growth of 8% in 2022, with $8.32 billion in global sales and revenue of $7.5 billion in the United States.
“When it comes to retail trends, NRF’s annual list of the Top 100 Retailers shows that the pandemic and pandemic-era spending are starting to ease,” said David Marcotte, senior vice president at Kantar Consulting, which helped create the list of the top 100 retailers.
Which changes can help boost the US jewelry business?
Among the changes are becoming a member of a buying group and trying to discover how AI can help American jewelers become more efficient. This is critical, because the majority of jewelry stores are independents or small chains.
Estimates suggest the number of jewelers who belong to buying groups at about two-thirds. Given the benefits that these groups provide, we would expect this number to rise in the coming years although it should be pointed out that the reasons for not belonging are also powerful since the groups do not fit the style of all jewelers.
Among the benefits are: reduced costs, shipping, inventory balancing, access to trunk shows, educational materials, innovations, and savings on travel. In addition, there are professional networking opportunities and business reviews which help companies by opening their eyes to different ways of operating and navigating this enormous market.
Companies that do not belong to buying groups cite factors such as: wanting to keep their operations secret, the requirements for buying do not allow firms to carry out their own highly customized work, avoiding becoming part of a like-minded group, and wanting to retain their own specific brand.
Meanwhile, among the uses of AI are: analyzing the impact of a firm’s marketing, providing and posting social media deals and offers – as well as responding to reviews, taking care of inventory and book-keeping operations, and providing lists of former customers who can be contacted for new sales opportunities.
Final words…
There’s no doubt that Americans remain attracted to jewelry buying, nonetheless the market continues to increase very slowly.
As with the diamond industry, jewelers need to find their niche markets in order to thrive.
Continuous marketing campaigns are also critical, however with most jewelers being independents or small family-owned chains, investing in such activities is limited for these small and medium sized businesses.
They are understandably occupied with their day-to-day operations, however a relatively small investment in marketing campaigns could bring large dividends.
Abraham Dayan for Rough&Polished
