Understanding the Changing Market

The face of America is changing. The past 10 years in particular have seen significant changes in both cultural and demographic makeup of the United States. These shifts are critical for jewelers—indeed, all merchants—to understand.

Prior to 1960, most immigrants to the United States came from Europe. Since 1960, the majority of immigrants have come from places other than Europe. At the turn of the 20th century, most immigrants were eager to assimilate; today, that’s not always the case.

These shifts have changed the profile of the typical jewelry consumer. Traditionally, the typical customers for fine jewelry and watches have been urban/suburban Caucasians, ages 25–54, middle to upper income, and most often a man buying a gift for a woman. While this is still a strong demographic—with its top tier getting both older and wealthier—there are important changes taking place.

The Jewelry Information Center recently commissioned a white paper on the changing demographics of the jewelry market. It notes that according to research from Pam Danziger of Unity Marketing, the typical jewelry shopper is still overwhelmingly (87 percent) Caucasian, with a mean age of 42, and has an annual income above $50,000. What differs from earlier demographics, however, is how much jewelry is now sold to women buying it for themselves—accounting for 60 percent of the total market, Danziger estimates.

JIC identifies three other key growth markets besides women: young people, gay and lesbian, and various cultural groups. For example, a separate study by GQ magazine says Generation X men have shed their “slacker” image and are now outspending their baby-boom counterparts by 19 percent across all product categories—and are more likely than boomers to pay a premium for luxury goods, including jewelry (41 percent more likely than boomers to pay a premium) and watches (50 percent more likely to pay a premium). And that’s not even taking into account the Millennials, born after Gen X and now entering adulthood.

The JIC white paper says today’s teens and preteens also have far more money to spend than previous generations. Data from Mediamark Research says the typical 12- or 13-year-old has a monthly discretionary income of about $125; by age 16, that increases to $375. The study didn’t separate fine from fashion jewelry, but jewelry in general ranked No. 5 of the top 10 items teens plan to spend money on, and No. 7 of the top 10 things they had recently bought.

Among the best ways to take advantage of these trends:

Understand the relationship of socioeconomic status versus ethnic heritage on shopping habits. Many jewelers feel the right message and the right product will appeal to consumers regardless of ethnicity. To some degree, they’re right. Certain brands do transcend ethnicity, and research also suggests that ethnicity becomes less influential in shopping behavior as the consumer’s socioeconomic status rises; i.e., education, income, home ownership, age, and lifestyle are more important elements than ethnicity for targeting consumers.

Consider regional differences in tastes and buying habits. Jewelers have known for many years that tastes vary across America in general—what’s favored in New York may not necessarily sell in Dallas, and vice versa—but this is also true among seemingly similar ethnic groups. Just like the general population, what appeals to Hispanics or Asians in one city may not appeal to the same group in another city.

Make sure your media choices appeal to the demographic in your area. Media channels vary by group and also are changing by generation. Hispanics, for example, are heavy radio users. According to an Arbitron survey, Hispanics are more than twice as likely as other groups to be in the top quintile in radio listenership, but they’re not for TV, magazine, or newspaper consumption—even though, according to Allied Media Corp., the number of Hispanic newspapers has grown from 355 in 1990 to 550 today, and the number of Hispanic magazines grew from 177 to 352.

African-Americans, on the other hand, are heavy magazine readers. According to Allied Media data, more than 85 percent of African-American adults are magazine readers, and there are 250 newspapers and other print publications targeting African-Americans in the United States. African-American adults receive an average of 11.9 magazines per month, compared with 9.1 magazines for all U.S. adults.

According to data from interTrend Communications, 78 percent of Asian-Americans consume both ethnic and English media, with 12 percent consuming only ethnic media. Filipinos and Koreans are heavy TV users, while Vietnamese and Chinese are heavy radio listeners compared with other Asian groups. Overall, print has the deepest penetration into all Asian groups except Filipinos.

The gay and lesbian market, while heavily concentrated in just 15 major metropolitan areas, is a force to be reckoned with for retailers in those areas. Unmarried couples, including unmarried same-sex partners, make up 5 percent of all U.S. households, and they’re typically an upscale, highly educated audience—attributes that often translate to high spending.

And, of course, it’s no longer news that younger consumers are far more likely to use the Internet to get information than older consumers. Today’s teens are less likely than previous generations to get their news and information from so-called traditional media like network television or newspapers. Indeed, the Internet is playing a powerful role in the jewelry shopping experience—even if only as a source of preshopping research and information for customers who still want to taste and touch the jewelry before they buy.

Keep sight of good retail fundamentals. The truism of knowing one’s market is never more essential than when trying to target new cultural groups. One survey respondent commented that many retailers don’t do nearly enough due diligence to understand the subtleties of the markets they’re trying to capture.

Market Demographics
[in Millions]

Source: U.S. Census Bureau
Caucasian Northeast Midwest South West Total
Total of Caucasians 32.2 40.8 56.0 32.9 161.9
Women, 25–54 9.2 11.6 15.9 9.5 46.2
Women, $50,000+ 1.4 1.1 1.5 1.3 5.3
Women, some college+ 7.8 9.5 12.9 9.0 39.4
Men, 25–54 9.0 11.7 15.9 9.8 46.4
Men, $50,000 3.8 4.2 5.2 3.8 17.0
Men, some college+ 7.4 9.1 12.6 9.0 38.0
Hispanic Northeast Midwest South West Total
Age 18+ 3.60 2.00 7.80 9.70 23.0
$75,000+ (household) 0.22 0.12 0.40 0.55 1.3
Some college+ 0.91 0.45 2.00 2.20 5.5
African-American Northeast Midwest South West Total
Age 18+ 4.20 4.40 13.00 2.10 23.8
$75,000+ (household) 0.33 0.29 0.69 0.18 1.5
Some college+ 1.50 1.60 4.30 1.00 8.4
Asian-American Northeast Midwest South West Total
Age 18+ 1.60 0.87 1.40 3.80 7.8
$75,000+ (household) 0.22 0.11 0.17 0.51 1.0
Some college+ 0.86 0.50 0.80 2.10 4.3