Christmas Forecasts: Kind of Scary
Warning: This will not be a cheery post.
So the forecasts for what this holiday will bring are not so looking so hot.
Here is the International Council of Shopping Centers predicting that sales will only increase one percent this year. Neilsen is predicting only a .03 percent rise. And despite considerable talk the “Great Recession” has ended, there are several ominous omens, including falling consumer confidence and rising unemployment.
Keep in mind that, whatever happens with overall holiday sales, jewelry is its own entity. Even if the holiday season comes out fine, the jewelry industry may not be able to take advantage of any sales gain. Last Christmas, jewelry did worse than other products, including products in the luxury sector.
I don’t want to wallow in negativity here. That doesn’t help anyone. Consumers still love jewelry, and many will buy it for Christmas. There has clearly been a boost in industry sentiment over the last few months, at least compared with the dark days of January through March. And there are some note-worthy things happening out there. Whatever one thinks of De Beers’ Everlon campaign, it’s a new idea, and, if it’s advertised enough, it should raise awareness of diamonds and jewelry in general. Sterling, whose “Jane Seymour” line was one of last year’s few bright spots, apparently has a new line (“Love’s Embrace”) this year too. Hopefully Zale’s hiring of Richard Lennox will mean some interesting ideas out if Dallas.
But this industry has had such a horrible year that it’s likely everyone is going to play it ultra-safe this holiday, cut back on advertising (which manufacturers never did much of what to begin with), and offer the same-old. Which, I fear, will only lead to the same old results.
What is everyone’s sense of this holiday?
Weisfield commented:
The new Open Hearts by Jane Seymour is landing in Sterling stores...I thought we'd just have the "peace" designs, but there are several very sellable "angel" designs too. All silver, with some diamond accents in some pieces. Waiting to see what Love's Embrace looks like...
Hedda Schupak commented:
Everything I'm reading and hearing points to continued frugality on the part of consumers. Until employment picks up, don't look for retail sales to pick up. But for those who can splurge a little, it won't be on the same old, same old. If people are shopping in their closets, the only way to compel them to buy is to offer something exciting that's not already in there--and that doesn't mean offering a similar style in a different color. It means offering something different, period.
I'm seeing a lot of huge costume jewelry being shown on runways, in fashion magazines, and in fashion stores. The good news is that it's calling attention to jewelry. The less-good news is that the looks are likely to be cost-prohibitive in all-fine materials. But jewelers who are willing to take a chance on design-driven merchandise in less-costly materials can do well with it (i.e., rethinking bridge, sterling silver, chunky color, and freshwater pearls.) It's not going to bring in the ca-ching of diamonds but it can bring in foot traffic that might later buy diamonds.
Luis de Agustin commented:
If a diamond were something you fry an egg on, Everlon might help. Fewer Better Things, now that’s the making of a timely, right value and finely evocative campaign.
Luis de Agustin
notwarrenbuffett commented:
Potentially as bad in jewelry as last year. Why? This holiday season small business has been impacted by lack of credit and layoffs. When Lehman exploded and the market was filled with uncertainty last holiday the impact was immediate and hit the middle to upper middle square on. This holiday the low income to upper middle will take care of the kids (Walmart-$10.00 toy zone idea)and everybody will do with less or without. The US High income is looking to first protect their wealth and then put capital at risk to grow. Banal and non-existant national jewelry advertising will be coupled with GOB's and inventory liquidation sales.
Johnny commented:
Yeah, but Everlon will only be a bright spot if the marketing gets out there in time and I don't know if it will.
The Everlon lines were only offered through separate channels and those carrying them are now competing with those who are not. A lack of a unified style front will put store against store in a way previous industry campaigns have not.
I think its a bad idea for the industry to speak with multiple voices. A much better campaign for this Christmas would have been to throw some weight behind "Fewer Better Things."
Kevin Lugosi commented:
Good article. Things are legitimately still pretty hard, especially if you didn't exactly have the best-paying job to begin with. The whole Everlon campaign actually dragged me in, though, and I managed to pick up my sweetheart this piece: kranichs.com/products/Everlon/neckpiece-5040. It's one of the diamond knot necklaces, and she loves it. So, you know, buying isn't dead as long as men will need to buy things for women, heheh.
