Nearly one third of consumers purchased fine jewelry or watches as a gift this holiday season, according to survey of active jewelry buyers. However, the numbers show tremendous opportunity for some 70 percent more consumers to buy fine jewelry or watch gifts that brands and retailers need to work harder to capture.
At least 30 percent of the untapped market—in similar polls from September to November—were unsure they would purchase fine jewelry and watches for the holidays, open to the idea given the right merchandise and marketing, according to the Jewelry Consumer Opinion Council (JCOC.net) e-panel of 2,842 panelists of the polled Dec. 26, 2005 to Jan. 3, 2006.
“We’ve seen in our research that consumers don’t know what’s appropriate to buy or spend,” says Elizabeth Chatelain, CO-CEO of MVI Marketing Ltd. of Paso Robles, California creator of the JCOC.net. “Our industry needs to present a united front of accepted gifts to receive and when. DeBeers has tried to do this over the years with items like the ‘Sweet 16 pendant,’ but as an industry we did not follow the message, and it tends to hurt us during the holidays when so many non traditional jewelry purchasers are looking for how to spend their money.”
Chatelain said that the most notable item in the latest survey is the fact that fewer consumers than expected purchased fine jewelry as gifts for themselves during the holidays. Less than 20 percent of JCOC.net respondents made a holiday self purchase, compared to the more than 40 percent back in September who believed they would buy jewelry for themselves while shopping for others. “In November, research showed that half of all jewelry purchases made that month and specifically during the Thanksgiving weekend were self-purchases,” she said. “But the trend did not keep up throughout the holiday season. It seems too many consumers were not reminded by the sales staff that they may want something for themselves.”
Of the respondents who did buy fine jewelry or watches for themselves during the holidays, a quarter spent $300 or more, while the bulk spent under $200. In fact, the most popular price points for fine jewelry gifts for others fell below $200.
The range dropped from September when JCOC.net respondents were likely to spend anywhere from $100 to $1,000 on holiday gifts for others. As of November, nearly half revealed they did not even have a holiday shopping budget, after reporting in September they would likely spend the same or more on jewelry gifts this season.
In the end, about a third each spent more, the same, and less than they did last year.
“Retailers need to ensure there is a selection of merchandise for the under $200 segment of the market, but also attempt to up-sell in order to increase revenues,” explains Chatelain, who notes that since shoppers did not have defined holiday budgets the opportunity was there to sell fine jewelry at higher prices. She speculates that the selection and price points available were not what many consumers anticipated, resulting in lower than expected priced points ultimately selling at retail.
The biggest recipient of fine jewelry this season was the spouse/significant other, according to more than one-third JCOC.net panelists who bought jewelry gifts.
Diamonds and precious metal jewelry with no gemstones were the big winners, with yellow gold the most common metal purchased. Earrings were the best selling jewelry type for more than one-third, followed by necklace and watch.
Department stores, national jewelry chains, and mass discounters captured a bulk of the holiday business, according to JCOC.net. Although in September national jewelry chains and local independents led the list of expected favorite retailers for holiday fine jewelry shopping. “It appears price and convenience were important factors for holiday purchases,” says Chatelain. “Department and mass discount stores had the advantage of reaching unplanned self-purchasers, as holiday shoppers there were searching for gifts for others.”
The Internet continues to grow in importance, with nearly 20 percent of all fine jewelry purchases in December made online, reports JCOC.net. “We’ve seen in our research that online jewelry purchases would continue to grow on their own, but would also be helped by the fact that more brink & mortar retailers now have e-commerce capabilities,” says Chatelain. “With this trend in place online sales will grow at double-digit rates.”