How to Stand Out in the Jewelry Industry
While the jewelry industry has indeed survived tough times, it has certainly taken some discernable damage over the past few decades.
During the most recent economic recession, many jewelry retailers and manufacturers failed to adapt to the changing marketplace, and what was once estimated to be around 40,000 U.S. jewelry retailers is now estimated to be around 15,000.
That decrease in numbers is scary, but it’s only through the past that we can estimate the future. As we summed up in our “Future of Jewelry” article, there has always been a demand for jewelry and there will always continue to be.
This does not, however, mean that jewelry retailers and manufacturers can maintain current operations in a static-like or idles way with no strategies for the future.
There have been countless reports created regarding the state of the jewelry industry, its recent trends and future market projections. Depending on the source material, one could have different ideas as to where the industry is headed. However, in aggregate, I’ve noticed a few crucial similarities while reading various jewelry industry reports that I’d like to share with you:
Fine Jewelry and Costume Jewelry
While jewelry is coveted and aesthetic, at its core it’s a non-essential item. This means that generally speaking, it’s placed among a supplementary class of items that consumers will put money aside for only when they have extra disposable income.
During tougher economic times, jewelry’s usually not high on consumers spending lists, and this was seen recently. What some people may not have realized though, was that the global recession generated consumer interest in an industry segment that had been previously disregarded or overlooked– costume and fashion jewelry.
Costume jewelry (jewelry not made of precious/semiprecious metals and stones) was often considered a lesser entity in the hierarchy of fashion. Stigmatized as inauthentic or cheap, in the past many people went out of their way to assure others that their jewelry wasn’t costume jewelry.
But a new trend has emerged, and reports indicated a drastic rise in the purchase of costume jewelry by consumers during the recession. Again, this seems commonsensical; people had less disposable income but still wanted to indulge in non-essential apparel, making costume jewelry an ideal choice.
Over the past few years, costume jewelry has increased its presence in the marketplace, now making up an estimated 10% of jewelry sales.
This may not seem like a staggering amount, but it is substantial. Costume jewelry has shifted in the perspectives of the new age consumer from something less valuable to something less expensive.
It has also had a far-reaching influence on the industry as a whole, or at the very least, is indicative of an industry shift…
Market researchers noticed that costume jewelry’s rise in popularity meant that different types of jewelry were beginning to mean different things to different people.
This statement seems obvious and redundant but for a long period of time, and for a sizable portion of the population, fine jewelry was usually purchased to indicate wealth, to be given as a gift, or was purchased for engagement purposes.
The categories, however, began to shift.
Now much of the fine jewelry segment is being sought out not necessarily for gift giving or strictly for special occasions, but simply because it's seen as a viable option for people who were previously unable to afford its luxury. Now that fine jewelry’s “special occasion” restriction seems to be lifted (though it is still purchased and worn for those traditional reasons), consumers are purchasing and enjoying it for any number of reasons.
This surge in fine jewelry is exciting, but as alluded to earlier, it’s going to require attention and accommodation on behalf of manufacturers, designers and retailers. Analysts across the industry have seen connections between the jewelry industry and the apparel industry over the past few decades, especially in the way of “internalization and consolidation”.
As industry expert Peter Smith claims, “retailers will have to make a very clear decision about what they want to be--either entirely and expertly price-driven, with all the attendant challenges of being the low-cost provider, or they must fully and completely embrace the high end of the landscape, with great quality, differentiated products delivered in a very focused way and a great customer experience”.
The different reasons for why people are starting to buy fine jewelry is going to require the differentiation of your jewelry products.
What makes your jewelry unique, what does it offer that the competition's doesn’t and what is your jewelry’s overall image?
In an industry that's fiercely competitive and highly fragmented, the answers to these questions are critical.
Emphasis on Product Branding Lines
This is a salient topic that I’ve seen mentioned throughout jewelry industry reports. Branding, it would seem, is something that’s self-evident. We come in contact with thousands of advertising messages everyday and are exposed to a multitude of branded products.
But why is it that we support certain brands over others, what makes us identify with one company over any and all of its competitors?
The main objective of branding is to leave a lasting impression in customers’ minds, to connect your company/products with a certain image and to spread awareness of your services. In this evolving marketplace, it’s becoming more important than ever.
Read any industry publication or market projection report and you’ll notice that each uniformly emphasizes the necessity of branded jewelry in order to stay relevant and competitive in this new jewelry marketplace. Numerous sources claim that without branded jewelry, the likelihood of a retailer or manufacturer surviving is slim. One market research group found that, “most (jewelry executives) expect that the branded segment will account for 30 to 40 percent of the market in 2020”.
They’ve correlated the growth of branded jewelry with the corresponding growth of different emerging consumer groups. This, in conjunction with the jewelry industry’s expected consolidation, will make branded jewelry the most sought after market segment.
In order to stay relevant and make an appeal to consumers, whether it’s through logic or emotion, your jewelry must have a specific essence, feeling or reputation; in other words, it must have a brand.
This is a huge reason for why costume jewelry became trendy; because it was properly branded and marketed. Additionally, branding is why many jewelry retailer leaders have started celebrity endorsed or designed product lines. Even if a customer doesn’t necessarily prefer that specific product line, the brand has differentiated itself from other competitors and has established a connotation with quality, elegance and/or renown.
A Changing Industry That's Projected to Grow
The compound annual growth rate of the market in the period 2014-19 is predicted to be 4.6%.
This industry shift towards branded jewelry will make it hard for smaller niche jewelers to establish share of voice, especially given the likelihood of industry consolidation and internalization (as seen in the apparel industry).
As bigger manufacturers and retailers buy up smaller ones, niche artisans will find it harder to get their message out to consumers. This can, however, also been seen as a positive.
Smaller jewelry retailers and designers can embrace the smaller and personal feel their brand represents and can use this to make deeper and fuller connections with their client base. Change is often alarming, but when prepared for properly, it can be greatly beneficial.
While the jewelry industry has seen peaks and valleys recently, overall it has stabilized and is projected to have slow and consistent growth. Keeping in mind the trends of related industries, as well as the jewelry industry’s previous cycles, retailers and manufacturers should feel confident in their endeavors.
By finding your niche, differentiating your products and facilitating the correct impression with your clients, the future can only hold success and prosperity!