When the economy turns south, the jewelry industry overreacts. It begins at retail and rolls back into manufacturing and distribution. Retail jewelers have responded to the recent downturn by not buying.
The continuous grind of the 24-hour-a-day news cycle, political campaigns focused solely on the negative, the downturn in housing combined with the mortgage problem, and rapidly rising prices of gasoline and various commodities including food are enough to make anyone wonder when and how this economic mess will end.
In the jewelry industry, there are significant underlying strengths that support demand. Two of the most significant are the number of marriages and the number of anniversaries celebrated every year. This year there will be 2.4 million weddings. Upwards of 85 percent will result in the sale of a diamond engagement ring, and virtually every wedding will see two wedding rings purchased. And increasingly, the wedding ring segment of the business will be diamond wedding rings. Prices for both product categories have been on the rise.
While the anniversary segment of the business is harder to quantify because of the divorce factor, we know that the vast majority of people who divorce subsequently remarry. Over the past 30 years the number of weddings has ranged between 2.2 million and 2.4 million annually. We also know that marriages and anniversaries are distributed throughout the year, with peaks in May and June as well as in September and October.
More than 2 million engagement rings will be sold this year and nearly 5 million wedding rings. Approximately 138 million people will celebrate wedding anniversaries. These two events are very important in people’s lives and are ideal occasions for jewelry gift giving. These opportunities are not discretionary gift-giving occasions. Products will be purchased to recognize these events. The question is, Where will they be purchased?
Times like these force you to look at every area of the business’s operations, including products and pricing, price points and assortments, promotion, sales training, store hours, and display. Times like these require a fresh look at everything and a refocusing on basics. Face it, we all become complacent. We forecast sales in an ever-rising straight line. Reality has a way of coming around to teach us the lesson again. Now is the time to think about change and implement new directions based on the bedrock of the business: engagements, weddings, and anniversaries.
A final thought: One big mistake jewelers make in times like these is to stop buying. Now is the time to identify your best sellers and make sure they’re never out of stock.
There are those who make things happen, those who watch things happen, and those who say, “What happened?” Be someone who makes things happen!