US market unfolds changes and potential
The jewellery week in Las Vegas is often considered the weathervane of the US jewellery market. The low attendance of the 2017 edition reassures us challenges and uncertainties are lingering. Industry practitioners interviewed by Hong Kong Jewellery, nevertheless, look forward to the future with hope and opportunities amidst drastic changes.
The US market has changed at a rapid pace over the last five years. Besides famous brands, consumers are also very interested in unique, high quality designs for daily wear, said Ori Zemer, principal of ALOR, California-based fine jewellery and watch brand. Well-known for its cable designs, the company has invented tooling that allows them to set trends with unique look and styling. “For us, bangles have always been the strongest category. With the use of cable it is very easy to stack, mix and match and to be universally worn with any outfit. Our new chokers give a youthful and on-trend look that can be worn by any age,” Zemer revealed.
Technological and communication development have made a vast amount of information available to end-consumers. Today’s customers have more options to choose from, but with less loyalty towards individual brands or designers. Although there are various touch points between jewellers and customers such as trade fairs, Zemer stated that they have shifted to promote products and communicate with clients via the digital world, and recorded a huge growth in online sales this year. “If we do not adjust then the customers will go somewhere else…Our social media accounts explore the entire world of ALOR and allow our customers to take the ride with us through our designs and creative processes,” he added.
Los Angeles jeweller Lord Jewelry is specialised in handcrafted jewellery for connoisseurs who value fine art and high fashion. Designer Sinork Agdere observed a rise of demand for one-of-a-kind jewellery in the US market. He also acknowledged the advantages of savvy jewellers’ omni-channel strategies for sharing information, developing brand identity, and building better customer relationships. “Online shopping has become very popular and it is one of the main factors that have driven market change,” he said.
Miami-based Budda Mama offers handmade jewellery inspired by Buddhism and Eastern traditions. Co-designer Dakota Badía noted that unlike previous years, the market is picking up with reviving buying sentiment and the company has experienced sales growth this year. Regarding the effectiveness of their online and social media presence, she said it is “constant and instant gratification”. Everything online is accessible 24/7, and social media has helped with brand awareness and attracted more clients.
When consumers become more knowledgeable and better-educated, consequently they prefer better products at better price points. “Price has become a driving factor. Retailers are squeezing manufacturers and wholesalers for better margins and lower MSRP (manufacturer suggested retail price)”. All those create subpar products in the market, according to Ori Zemer.
Canadian bridal jewellery designer Noam Carver holds the same view. He commented: “Creating price-sensitive products is crucial; however, they deserve as much attention as high price-point items. Design and quality should not be sacrificed, if they are, you won’t be around when the market picks up and higher price points are in demand.” He believes that the resurgence of fashion jewellery and low price-point collections has greatly affected the market in general in recent years. In regards to the spending habits of consumers nowadays, he sensed that they are more focused on disposable fashion jewellery and want fresh looks that can be switched up quickly.
In partnership with Paul Raps New York, Taly Diamonds and Krainz Creations and inspired and mentored by Elizabeth Taylor, US fashion icon and supermodel Kathy Ireland debuted her new line of ethically-sourced, handmade jewellery Diamonds by Kathy Ireland during Luxury 2017. The brand offers a 65-piece collection including engagement rings, wedding bands, patent-pending earrings, necklaces and bracelets, at US$2,000 entry price point.
Ireland told Hong Kong Jewellery that while diamond jewellery has generated ongoing strength in 2017, the price war continues. “You simply cannot win the war by lowering prices every day. Somewhere, someone will always sell for less. Please don’t let it be you”. She thinks that the biggest change in the current industry is that branded jewellers are winning the market share. “Without a brand, you cannot have a point of difference. No one will pay more for something they perceive to be generic,” she stated.
Men’s jewellery is one of the fastest growing market segments in recent years in the fine jewellery industry, mainly because of the increase of male self-purchasers. William Henry is a fine functional jewellery brand for men with a broad network of over 500 independent retailers in the United States and abroad. Company CEO Dave Boechel revealed that many jewellers have realised that selling men’s jewellery is an effective way to grow their business without detracting revenue from their current product categories. The company continues to grow in importance and sales in 2017. Regarding customer preferences, over 80 percent of their sales are men’s bracelets, which are an easier and more customary choice for US customers.
Almost every player in the jewellery industry is investing and improving the quality and flexibility of their production chain and the online experience they offer to their clients, said Boechel. He thinks that although the market was tough in 2016 due to the slowdown in consumption ahead of the presidential election, main drivers of luxury remain the same, namely design, craftsmanship, intrinsic value and exceptional customer services. “The key is to assure these sales drivers are always effectively-communicated,” he emphasised.
The only constant – bridal jewellery
As De Beers pointed out in its Diamond Insight report published in June 2017, the bridal sector constitutes 28 percent of the US jewellery market, showing that this traditional area is still the backbone of the industry. During the market recovery, bridal jewellery remains the only constant category that defies market trends and fluctuations, becoming a primary growth engine.
This year has seen an incredible growth for Noam Carver as the brand places emphasis on brand building, designs and customer services. Brand owner Noam Carver stressed that the US bridal jewellery market continues strong growth with a focus on branded designer collections that tell stories. “Bridal jewellery is a perennial product, a must-have. A strong market will contribute to higher ticket purchases and a weak market will result in lower ticket purchases. Either situation, bridal is still being purchased,” he noted.
Millennials account for one of the largest generations in history, as they move into prime spending years; an increase in overall bridal jewellery consumption will be seen, Carver projects. Millennials are the target consumer group of Diamonds by Kathy Ireland. According to Kathy Ireland, the brand is disruptive by offering affordable bridal jewellery in high quality, plus world-class craftsmanship and after-sale services. She believes that bridal jewellery is a profit-margin driver and millennials will “absolutely make bridal jewellery purchases”.
ALOR launched its bridal line in May 2017 with two collections – ALOR Down The Aisle and ALOR Ecoearth,incorporating the brand’s cable DNA. While the former utilises mined diamonds, the later applies “eco-friendly and sustainable” synthetic diamonds. With warm reception of their bridal collections, Ori Zemer said that the US society loves weddings, which is a tradition that has been around for thousands of years. “As such, bridal jewellery market will continue to thrive”.
Opportunities and trends
“Direct-to-consumer is the biggest opportunity. The continued development of the ease of purchasing online makes it much easier for end-consumers,” said Ori Zemer. “Technology is moving at a fast pace, practitioners must set up a digital strategy to be able to capitalise on the opportunity.” Regarding future trends, he forecasts that demand for chokers will continue and come on stronger for 2018. Long earrings, especially oversized hoop earrings for mix and match, statement necklaces with oversized symbols will be in vogue.
Lord Jewellery’s Sinork Agdere believes that high quality products always stand out from the crowd. In the near future, he foresees that branded jewellery will claim a higher share of the market. “The US market is strong and robust, there are ups and downs however its resilience is what makes it so special,” said Noam Carver. “There is always room for another competitor but the competition is fierce and unforgiving.” He has confidence in the brands that are willing to adapt to the current market trends.
As customers are increasingly discriminating, practitioners cannot do exactly what they did 20 or even five years ago and expect grow, said Dave Boeckel of William Henry. While men’s jewellery still has not yet been exploited in the United States, he expects to see a growing number of players and products in the category in 2018.
The US jewellery market is unlimited if change is embraced and people stop resisting the reality that we have a younger customer, says Kathy Ireland. As Elizabeth Taylor often said, “something wonderful is about to happen”, Ireland feels that is true for the US market.