Diamond Jewelry Market Grew 6% in 2006, JWT Says
By Rob Bates -- JCK Online, 6/1/2007 2:00:00 AM
Despite the hype over Blood Diamond, the U.S. diamond jewelry market grew again last year, JWT, De Beers' U.S. marketing agency, reported recently.
Overall retail sales of diamond jewelry increased by 6.1 percent in 2006, to $35.2 billion, a $2 billion increase over 2005's $33.2 billion. The growth was largely fueled by a 9.1 percent growth in the average price of pieces sold. Overall transactions slipped 2.7 percent. JWT executives told JCK there were a variety of reasons the average price increased, including an increase in commodity prices like gold. In addition, David Sisson, JWT's director of market intelligence, notes the company's new “beacons” are “designed to get a higher average price.”
But Sisson said he didn't think the decline in pieces sold was the result of Blood Diamond and the hype surrounding it. “The piece decline was pretty standard throughout the year and didn't just happen in the fourth quarter,” he said. “We've done some steady polling of people for the last three months, and we have seen no erosion in people's desire to buy diamond jewelry.”
Richard Lennox, director in charge of the De Beers account at JWT, says that while Blood Diamond is gone from theaters, the trade should not be complacent. “We have to redouble our efforts and make sure we truly can say to the consumer that diamonds are symbols of love,” he says.
Executives note the diamond industry is facing increased competition for consumer dollars, especially from electronics like iPods and plasma TVs. “There is evidence that women are more interested in a new BlackBerry or phone than a new piece of diamond jewelry,” says Claudia Rose, JWT's director of business strategy. As for the year ahead, Lennox says, “I think it's going to be another tough, challenging year. The economy is uncertain.”
The biggest bright spot of the year was the good initial results for Journey diamond jewelry—which outperformed three-stone jewelry in its first year. “We are expecting great things from Journey this year,” says Sisson.
Among other highlights of 2006, diamond right-hand rings enjoyed double-digit growth for the third straight year, increasing by 10 percent; the total value of the diamond engagement ring category grew 8 percent; and three-stone rings saw a 14 percent increase in average price.
