It would take a silver bullet to slow the growth of silver jewelry sales. Annual sales increases have grown from 7%-10% in the very early 1990s to at least 10% now, says the Silver Trust International, with the 1994 total expected to hit $1.6 billion.
The best news for jewelers? Much of this growth is occurring in the higher end of the market, the segment traditionally carried in fine jewelry stores. The sterling silver jewelry market comprises three major segments: mass, bridge (so named because it bridges the gap between mass and designer) and high-end designer sterling. Price points are roughly $10-$50 for mass, $50-$150 for bridge and $150 up into the thousands for high-end.
Silver Trust Director Linda Meehan says price levels overlap and that designer cachet and distribution channel are more important than price in determining which market segment can claim a piece of jewelry. "The Elsa Peretti sterling collection at Tiffany's is not a bridge collection," she says as an example. The collection includes sterling heart key rings for $32 and pendants for $60, but it would never be considered anything but high-end because the Tiffany and Elsa Peretti names are closely associated with the luxury market.
Not surprisingly, high-end and some bridge silver lines are sold in jewelry stores, the bulk of bridge goods are sold in department stores and mass-priced sterling moves mostly through mass merchandisers such as Kmart and Wal-mart, catalog showrooms such as Service Merchandise, mall kiosks and off-price stores such as Marshalls and T.J. Maxx. But silver jewelry crosses distribution channels just as it crosses price points. Sunstone, a well-known manufacturer of mass-priced sterling, has a huge base of independent jeweler customers, says Helayne Stein, sales support supervisor.
The Silver Trust doesn't break silver jewelry sales figures out by department or jewelry stores. However, Meehan says department stores are the primary sellers of all sterling silver jewelry, followed by jewelry stores. A rapidly growing segment of the silver jewelry market is going to television shopping channels.
Sunstone President Michael Brown says many guild-type jewelry stores are successful with silver jewelry because their experience selling sterling flatware and giftware has taught them how to create silver displays.
At Schwarzschild Jewelers, a guild operation based in Richmond, Va., silver jewelry sales have increased 40%-45% in the past three years. During that time, the company closed one store and greatly expanded the silver jewelry section in a newly remodeled store in the Regency Mall, says Peggy Sincock, jewelry buyer. This store now generates almost 50% of Schwarzschild's silver jewelry sales.
Meehan finds no reason why one type of outlet should do better than another at selling silver jewelry. "If one is promoting a good product at a good value, there's no reason not to make money."
Fashion accessory or fine jewelry? Silver is both. For consumers who want designer names at an affordable price, silver is the best option among the three precious metals.
Silver jewelry is often the way new customers get acquainted with Schwarzschild Jewelers, says Sincock. "Core" customers also buy sterling, considering it a fun, fashion-oriented purchase that allows them to choose a bolder style they'd never consider in gold. "How our customers perceive silver jewelry really depends on the customer, not on the product," says Sincock.
Like apparel, branding is important in sterling silver jewelry. "People want to buy quality and buy a name," says Meehan. Examples are the 1928 and Sunstone mass-priced brands, Bayanihan and Leonore Doskow bridge brands and David Yurman and Lagos designer brands.
"Designer branding is a strong selling point," says Byron Brantley, chairman of Sterling Moments Distinctive Silver Jewelry, which specializes in designer silver jewelry. His two stores – one in Louisville, Ky., the other in Cincinnati, Ohio – carry about 50 designer brands, some nationally known and others local. Though he offers some basic, non-branded sterling, he finds customers really want to know something about the artist who designed or made the piece.
Who buys silver? The buying demographics for silver jewelry haven't changed since JCK's 1993 report on the market. Women still buy more than 90% of all silver jewelry sold, and 60%-70% of their purchases are for themselves, estimates Meehan. This holds true across price points.
How do they buy? Silver jewelry sales are largely impulse-driven, says Brantley. Both his stores are in shopping malls, which traditionally rely on browse traffic and impulse purchases to help boost sales. "A little treat is a relative thing," says Brantley. "A realtor closes a big deal and wants to reward herself. Maybe she wants to buy a big treat like a new car, but that's not quite realistic so she buys a $2,000 designer silver bracelet as a `little treat.' To another woman, a $50 pair of hoops is a treat."
Teenagers fuel the low-end of the market, but jewelers shouldn't ignore them. Meehan stresses that teens have socioeconomic classes just like their parents, with purchases ranging from $9.99 to as high as their allowances and after-school earnings will allow. And it's never too early to capture the trust of someone who soon will have adult purchasing power.
Hear this: About a third of all silver pieces sold are earrings, says the Silver Trust. Retailers and manufacturers interviewed by JCK also cite earrings as the leading product category in unit sales.
Next come necklaces. Collars and David Yurman pieces are big sellers in the high-end category, link necklaces are popular in the bridge category and a pendant on a chain or cord is the low-end choice.
But the hottest look among silver customers of all ages is mixed metals. "Customers love being able to wear the jewelry they like together instead of wearing all silver or all gold," says Brantley. So far, say retailers, the look is silver and yellow gold; silver with pink gold hasn't caught on yet.
But perhaps silver's biggest selling point is its close alignment with the apparel fashion industry, says Diana Shiel, also of the Silver Trust. Silver jewelry responds to the whims of fashion faster than gold and platinum because it doesn't require as big a financial investment by jewelry designers and manufacturers.
In addition, the fact that silver is the first to pick up on the latest trends in apparel, art, media and music makes it the jewelry of choice for trend-watchers. "Silver has become a statement, not just an accessory," says Shiel. "It's a form of expression." It worked especially well for the biker and grunge antifashion looks popular a few seasons ago, as well as the minimalist waif look.
"As we move further into the '90s, silver has become part of the reaction against color," she says. "The white of silver has become the `no look' look and has melted into the minimalist `no jewelry' feel in fashion."
Brantley says the fact that prominent fashion designers such as Calvin Klein and Donna Karan are using silver cloth and accenting with sterling silver jewelry has boosted its appeal and made it "the metal of the Nineties."
Value: Sterling silver jewelry also benefits from the consumer shift toward value. Consumers who would spend $100 or more on costume jewelry during the roaring Eighties are turning to affordable fine jewelry instead. They like the handmade, unique and affordable qualities of designer silver.
Consumers also have shown a global awareness and appreciation of ethnic differences in food, fashion – and jewelry.
In addition, silver is perceived as being fresh, clean and modern, the color of youth, energy and an optimistic future. Shiel laughs about the shift in attitude toward silver, which was once considered to be an "older woman's metal" because it accents gray hair. Nor is silver today considered just a summer metal that women take out with their white shoes on Memorial Day and put away on Labor Day.
The value and fashion factors have caused some retailers other than jewelry, department and mass-merchandise stores to take a look at silver. It's being sold increasingly at specialty apparel stores such as Banana Republic, Ann Taylor and The Limited. "I think it's a very smart growth area for them," says Meehan. "Women buy accessories where they buy clothes." But she doesn't foresee specialty apparel chains usurping jewelry or department stores' segment of the market.
Future of design: Silver is very specific when it comes to trends, says Shiel. Part of the reason is that it's shown at accessory markets five times a year instead of just two or three times like most other fine jewelry.
Another reason is regional preference, says Karen Duclos of the design firm Frederic Jean Duclos. "What sells in New York may not sell in L.A., but a year or so later may sell in the Midwest," she says. Size is typical of regional preference, says Duclos. Generally, consumers in Florida and Texas like their jewelry big, those in the Midwest prefer medium proportions and those on the two coasts favor smaller sizes, especially in earrings.
Overall, silver jewelry design is leaning toward clean, unfussy designs. New looks include futuristic, bold, polished. Texture, the reigning trend in other precious metal jewelry, is on the way out. However, Shiel cautions the move from textured to polished is still on the showroom level and is just now starting to register with consumers. "We forget that we [industry professionals] see trends so quickly at market," she says. "The consumer can be a few seasons or even a few years behind."
Shiel suggests these overall trends to watch:
· Silver and pearls. This is going to grow, especially with
seed and freshwater pearls. (Schwarzschild's Sincock cautions about the differences in cleaning pearls and silver.)
· Lots of pale gemstones such as tourmaline, quartz and amethyst. Pinks will be especially popular.
· Lots of crystal, including gem-like glass crystals and New Age aura crystals.
· There's still no market for silver and diamonds. Cubic zirconia usually substitutes for diamonds in silver jewelry.
· Belt buckles are a growing category. Shiel says a number of big-name jewelry designers offer them, including David Yurman, Lisa Jenks, Rick Cameron, Stephen Burlingham, Barry Kiesselstein-Cord, Angela Cummings and Stephen Dweck. Western concha belts are a classic.
· In the youth market, waist chains are popular, especially if threaded through a vest. This is in response to the bare midriff trend in apparel, says Shiel. Also look for ankle bracelets to make a comeback, along with ID bracelets, biker padlocks and nuggets worn on rawhide necklaces.
Specific design trends are concentrated in three areas: glamorous/feminine, bold/futuristic and cultures. Here's a look at each one:
· Silver aged for a museum quality.
· Intricate, delicate looks achieved through filigree, mesh, cutouts, engraving and etching.
· Small charms.
· Greco-Roman influences in columnar shapes.
· Nature in the form of leaves, laurels and flowers, especially roses, sunflowers and pansies. Also fleur-de-lis motifs.
· Delicate long chains, bracelets and choker length necklaces with small charms.
· Lariats and bibs.
· Clean lines, geometric and sculptural collars, cuffs, bangles, disc- and sphere-shaped pendants and rings.
· Silver and Lucite.
· Clean, small and large hoops, large discs and sculptural earrings.
· American Indian designs are classic, but also enjoy periods of increased popularity, such as now.
· Morocco, Latin America and the Orient.
· Surface treatments such as tarnishing, oxidation, cutouts, granulation and manipulation to create the look of ancient civilizations.
· Silver mixed with weathered worn wood and stone beads and natural rawhide.
· Large cuffs, long necklaces and earrings, waist chains, dangling charms or beads and snake chains.STERLING ADD-ON SALES
Gift and vanity items are a primary growth area for the silver market, says Linda Meehan, director of the Silver Trust International. Furthermore, they fit ideally into the product mix of a jewelry store. "Jewelry-store owners are really missing an opportunity if they don't offer silver items in addition to jewelry," she says.
Meehan cites picture frames as probably the single largest-selling silver gift, with silver Christmas ornaments a growing category. Other options include desk accessories and vanity items.
Silver gifts are appropriate to mark any occasion at any time of year, says Meehan, including births, birthdays, weddings, bar mitzvahs and confirmations. "Growth is phenomenal in sterling baby gifts," she says. "It's being taken over by catalogs, but it's an area where a jewelry store can do big business."