“It’s no longer chic to be chic,” analyst says
While jewelry sales have risen over the last few months, the high end of the market is showing weakness, according to Sarah Quinlan, senior vice president and group head of market insights for MasterCard Advisors.
Quinlan says high-end spending has been hurt by the August volatility in the equity markets, a decline in U.S. tourism due to the strong dollar, and the reemergence of so-called luxury shame.
“It is no longer chic to be chic,” Quinlan says. “People are choosing not to display their wealth, even as we see the traditional wealth effect from the real estate values and the equity markets being high.”
Jewelry will continue to show gains this holiday, Quinlan predicts. While more consumers are opting for experiential spending—such as restaurants and travel—jewelry “crosses over into that category,” she says.
“Jewelry is a good, but it’s also an experiential and a memory,” she says. “You have the memory of receiving it.”
She says that while apparel sales are down, “jewelry feels permanent to people, as opposed to fashion trends that go in and out.”
But her data doesn’t show any drop-off of jewelry shopping among millennials.
“They are indexing like everyone else, but they are staying in their mid-tier range,” Quinlan says.
MasterCard Advisors produces SpendingPulse, which issues reports on retail spending culled from MasterCard spending data and estimates of other payment methods.
SpendingPulse projects an overall 4 percent gain in consumer spending this holiday, higher than some other forecasts. It estimates that e-commerce spending will grow 7.2 percent in the fourth quarter. That is on par with last year, but below the double-digit increases of years past.
It has also found:
– Consumer confidence is holding steady: 45 percent of consumers report they are as confident as last year, 30 percent were more confident, and 25 percent were less.
– Black Friday remains the biggest spending day of the holiday season, but its dominance has waned as more retailers open on Thanksgiving.
– The Saturday before Christmas is the other top shopping day. It is also consistently the biggest shopping day in December.