A RICH 50-PLUS MARKET LOVES TO BUY JEWELRY
Cher turned 50 a while back. Al Gore just reached this milestone. By any reasonable measure, these aren’t “old” people. They’re people in the prime of their lives.
And they’re just part of a whole herd. As Baby Boomers slide fighting and denying into middle age, nowadays one American turns 50 every 7.5 seconds.
“Every generation resists aging, but the boomers are going to rage against it,” says Barry Feig, president of the Center for Product Success, a marketing and research firm.
This is a generation that’s giving a whole new definition to the phrase “growing old.” In a marketing world that adores youth – just consider where the big TV advertising dollars are directed – it would be easy to brush off the over-50s as has beens. But that would be stupid.
First of all there are a lot of them. The boomers, who began to hit their 50th birthday in 1996 and will continue to do so until 2014, number about 80 million – or close to one-third of the entire U.S. population. By and large, they’re very concerned about their health – and their appearance.
They’re well heeled, too. The Census Bureau reports that Americans aged 55 to 64 have more disposable income than those under 45. Further, a report by Mendelsohn Media Research of New York, quoted in American Demographics, shows that close to one in five of Americans classified as “comfortably rich” (annual household income of between $100,000 and $249,999) are over 55 and one in four of the so-called “super rich” (annual household income of more than $250,000) also are in the 55-plus group. Yet another government study, this one from the Bureau of Labor Statistics, shows that those over 65 are likely to spend more on gifts than do those under 35.
Older Americans also like jewelry. Roughly one in five of all people who bought a piece of fine jewelry or a watch in October, November or December last year was 55 or older, according to JCK’s study of consumer buying habits, conducted quarterly by Chilton Research Services. And many of them spent generously; about one in five of the jewelry purchases made by these older Americans was valued at $1,000 or more.
For jewelers, that’s the good news. The not-so-good news is that these shoppers chose department stores as the No. 1 location to make a jewelry or watch purchase, with jewelry stores coming in No. 2. Discount stores ranked quite a way behind as the No. 3 choice. Some experts say the readiness to shop in department stores reflects the big role that women now have as jewelry shoppers, either for themselves or for others. The argument is that women have always been more at home in a department than in a specialty store, and that they’re used to the convenience of shopping for different items in one location.
Who are these over-50 shoppers and what do they want?
Besides being well-off and very health conscious, they’re also well educated and well informed. They place a premium on information and are as likely to shop the Internet as to shop competing stores. They’re highly value conscious and not notably loyal to any brand or any particular shop. They’re very time conscious. Above all, they want excellent service.
Since these days that’s a commodity in very short supply at typical department stores, the jeweler who offers first-class service might do well to target the 50-plus market – especially 50-plus women – as a way to cultivate some fine new business.
JEWELERS’ MARKET SHARE DROPS IN FIRST QUARTER
Not unexpectedly, shopping for jewelry and watches fell off in the first months of this year. Jewelers, who captured just about half of all sales in the busy pre-Christmas months of 1997, lost some of their share of business in 1998’s first quarter. Department and discount stores showed gains. On the plus side for jewelers, consumers continue to regard the single-store, locally-owned independent as the place they’re most likely to find honesty and integrity – even if they don’t always shop there.
Just about 12 in every hundred people bought jewelry or a watch in the first quarter – which, small though it may be as a percentage, still adds up to more than 30 million purchases.
Rings were the most popular purchase in the January-March period, with diamond rings topping unadorned precious metal bands by a slight margin (we did not ask which metal was favored). Earrings were the next most popular buy, followed by the necklace/pendant category. Among consumers who chose a colored stone, garnet emerged as the favorite (presumably reflecting its role as January’s birthstone), followed by opal and ruby.
Watches had a good three-month record, being outdistanced only by rings as the most-purchased item.
The current study shows a definite tightening of the first-quarter purse strings by customers at the jewelry counter. Almost half of all purchases were for $100 or less – compared with one-third of all purchases in the final three months of last year. Moreover, in the recent quarter only about one purchase in 100 was for more than $2,000 – compared with almost five in 100 in the months before Christmas. Although women outdid men by almost a 2-to-1 ratio as jewelry and watch shoppers, men were much more likely to pay the big dollars.
By age group, the biggest spenders were those between the ages of 18 and 34 (8% of all their purchases were for $1,000 or more) and those between 45 and 54 (9% of whose total purchases were for $1,000 or more).
About one-third of all jewelry and watch purchases were made in jewelry stores in the first quarter this year, down from almost half in the final quarter of 1997. Department stores’ share of market rose to almost 25% from 17% in the pre-Christmas quarter last year and major discounters’ share rose to 18% from just about 14%.
SILVER JEWELRY SALES HAD STRONG 1997 GROWTH
U.S. retail sales of sterling silver jewelry totaled about $2.5 billion last year, a gain of 15% from 1996, according to a report from Silver Trust International, the marketing arm of the silver industry. The sales represented 60 million individual pieces.
This was the fifth successive year in which sales of sterling silver jewelry showed double-digit percentage increases.
“Silver jewelry’s favorable price points, perceived value as a precious metal, strong fashion message and ever-expanding assortment of designs contributed to its long-running popularity,” says Linda Meehan, director of the Silver Trust. “What was once considered by many in the industry as a cyclical fad has become a long-lasting classic.”
Neckwear, particularly chokers, followed by earrings, rings and bracelets/cuffs were the strongest-selling product categories.
The trust says that high-end designer silver jewelry and lower-priced pieces directed to the teen market fared better than the middle sector. Men’s jewelry and personal accessories showed good gains in 1997 and are expected to grow further this year, the trust adds.