Improving Clarity According to US Census Bureau data, total adjusted 2016 US retail jewelry stores sales were $32.54 billion, a 3.5% increase from 2015’s $31.45 billion. The total received a boost from a 4.5% increase during December and higher prices on jewelry and watches. Total adjusted jewelry store revenues for the first five months of 2017 were $13.82 billion, a 3.2% increase, compared to the January–May 2016 period, which totaled $13.39 billion. The number of U.S. jewelry retailers, as of the end of 2016, were 20,124, or a decrease of 5.7% from 2015. During 2016, 1,269 jewelry stores closed, an increase of 43% compared to 2015.

Reasons for Optimism In a survey of American Gem Society (AGS) members, 57% expect to expand their business during the next five years. Optimism is due to a strengthening economy, consolidation in the industry and the “Real Is Rare” advertising campaign. 187 US jewelry retailers, wholesalers and manufacturers ceased operations during Q2 2017, a decrease of 56% from the 428 that closed during the same 2016 period. Store openings have also declined from 60 during Q2 2016 to 22 during Q2 2017. According to National Jeweler’s State of the Majors report (October 2016), Signet Jewelers (#1) generated almost twice as much sales as its nearest rival, Walmart (#2), for their last fiscal years, at $5.8 and $2.54 billion, respectively.

Future Flaws Consolidation is a trend in the jewelry retail market, with large chains expanding and many small independents closing their businesses. Industry insiders expect this to strengthen the market because of economies of scale in buying and increased marketing savvy. Jewelers are now finding it more difficult to obtain funding for inventory purchases because of changes to banks’ lending policies. The closure of department stores, a major sales channel, as well as independent stores struggling to stay relevant to their customers is impacting the jewelry industry.

Shine On, You Crazy Diamond (and Gold and Watches)! According to National Jeweler, demand for gold jewelry increased 4% during Q2 2017, following an increase of 3% during Q1 2017. De Beers reported during August 2017 that rough-diamond sales increased 8% during its sixth sales cycle, the first increase during 2017 since the first sales cycle. Sales of watches decreased by 5% during 2016, but there was hope of an upturn. Almost half of watch distributors said they were optimistic (45.0%), with 36.4% neutral and 18.2% pessimistic about 2017.

Bridal Ring-a-Ding-Ding According to The Knot, the average price customers spent on an engagement ring increased 5%, from $5,871 during 2015 to $6,163 during 2016. The Wedding Report’s 2016 average was $3,407, a small increase from $3,386 for 2015. During 2016, the average price of a wedding band decreased less than 1% to $1,242. According to Brides magazine, rose gold; vintage styles; colored diamonds, including black and colored gemstones; unique halo settings; intertwined or split bands; east-west settings; and stone clusters were the top engagement ring style trends.

Where Consumers Shop for Jewelry According to a 2017 study from PwC, more global consumers (49%) preferred buying jewelry and watches in-store compared to online (32%). More than a third, 37%, preferred to use multi-brand Websites for online jewelry purchases. Of those who wouldn’t buy luxury jewelry online, the biggest reasons were that products might not be genuine, 31%; they prefer the in-store experience with a salesperson, 29%; they need to see and touch products, 46%; and stores are nearby, 15%. As Millennials become a larger part of the jewelry market, women are buying more diamonds for themselves or as gifts for other women rather than mostly men buying and giving them to women as gifts.

Advertising Strategies To capitalize on consumers’ preference to buy jewelry in-store, emphasize knowledgeable and helpful salespeople and the opportunity to see and try on items. Tap into Millennials’ social consciousness by marketing and selling ethically sourced diamonds and gemstones. Co-promote and host in-store events with a fashion clothing brand or store to show colored gemstone jewelry and how they can be worn with various fashion and accessory combinations.

New Media Strategies Use Facebook’s sponsored stories to show potential customers that their friends like specific brands and your store. Run promotions for customers who check in on Facebook at your store to increase foot traffic and sponsor check-ins for an additional branding opportunity. Use Instagram ads to show photos and videos, but also to showcase your company’s culture to connect with potential customers. Test specific ads targeting young adult Latina-Americans.