JCK’s 2020 State of the Jewelry Industry Report Results: Unusual, Uncertain, Resilient

It’s an understatement to say that 2020 is a year unlike any other, which makes the results of JCK’s annual State of the Jewelry Industry Report more intriguing—and necessary—than ever. The survey, whose results are typically presented in person at JCK Las Vegas, were originally commissioned at the beginning of 2020—just coming off of JCK magazine’s 150th anniversary in 2019, and just prior to the world-changing arrival of the pandemic. COVID-19 ushered in an era of new challenges for the jewelry industry and the world, so these survey results can’t possibly resemble those of the report’s three-year past.

With that in mind, JCK asked MRI-Simmons, the national research firm it works with to commission this report, to revisit the survey. Updated results were completed in June. Because recent times can’t be compared in typical year-over-year fashion, the report views the data through the prism of pre-COVID and post-COVID. Let’s dive in.

Unlike some other industries, jewelry could not continue to operate on a business-as-usual basis after the arrival of the coronavirus. Jewelry is one of the definitive discretionary purchases, and sales took a hit (global demand for gold jewelry reportedly plunged 39% in the first quarter of 2020) as the U.S. unemployment rate skyrocketed. Of the retailers surveyed, 54% said they had to close their locations temporarily due to the virus, whether in a response to lockdown rules or in an effort to maintain social distancing guidelines. A mere 3% of those asked were able to maintain regular business hours. As states began to reopen, retailers began to adapt to a new normal, some opting to keep their physical locations closed, others taking appointments to keep their customers and staff safe. What’s more, 74% of all respondents anticipate a rise in online and remote business, an aspect of the new normal that may have lasting effects. Still, retailers are showing the power to adapt, and government aid appears to be a lifeline: 79% of respondents said timely payments from the Paycheck Protection Program and other federal stimulus programs helped them to continue operating.

As expected, confidence is experiencing a downturn: Fewer than half (49%) of respondents said they were generally optimistic about consumer confidence and economic growth. The number of respondents who describe the economy as worse than a year ago spiked from 22% to 78% in JCK’s February versus June survey results, and nearly half of those (48%) described the economy as much worse. The JCKJewelry Industry Confidence Index (JICI) saw a decline among respondents describing themselves as optimistic—from 86% to 66%. Concern about the future of the brick-and-mortar business model has increased as well, from 70% in February to 80% in June.

But there’s hope and resilience in the industry yet: 58% of respondents believe that growing their businesses back to their previous strengths would take eight months or more, while 11% predicted they won’t fully recover for two years or more.

Online jewelry sales have long been a source of competition for brick-and-mortar stores in the industry, and that’s truer now than ever: 40% of June respondents said they’d shift their focus to online buying (compared with 20% in February’s results), though businesses with non-sales websites still outnumber those with sales or e-commerce sites (40% versus 37%), and 14% of businesses have no website at all. (In another part of the survey, 56% of those who don’t yet have an e-commerce site said they intend to open one within the next year.) While some retailers worry that digital business will eliminate the personal touch jewelry stores have long been revered for, more than half of retailers in June’s survey (53%) said they plan to depend on digital tools such as online chats, video appointments, and augmented reality apps.

It may be possible to provide a personal touch to customers online, but not without changes to a retailers’ staff. Of the 76% of respondents who are owners, partners, or corporate executives, more than 25% said they have had to furlough staff, while 19% reportedly laid people off. Still, more than half (56%) said they anticipate no staffing changes in the coming year.

The in-store experience was once among the most important priorities for retailers (62% said so in 2018; 34% agreed in February, dropping to 20% in June). However, connecting with clients via social media is now taking its place, with 48% of those surveyed naming social media as one of their top three business strategies. Shifting the focus to online buying is another one of retailers’ top three priorities (40% agreed). Rounding out the top three (also with 40%) is a term that wasn’t even on the February survey‚ ‘clienteling.’ The word refers to actively engaging and communicating with top customers to strengthen the relationship. While the practice has long been a part of traditional jewelry store success, it’s only now becoming a major priority, at least in name. Other key strategies for businesses include changing inventory buying habits (39%) and advertising in nontraditional forms (34%).

The future of jewelry looks different now, with 34% of respondents naming lab-grown diamonds as the area they most expect to see in future sales. Just below that were responsibly sourced jewelry (with 32.4%) and fashion/bridge jewelry (with 32.3%). Colored gemstones also took a dive during the pandemic: 67% of respondents named them as their top expected sales area in February, while in June only 28.5% percent anticipated an increase. Designer jewelry followed at 22% and natural diamonds at 21%.

Speaking of designer jewelry, it’s experiencing a noticeably sharp decline in sales post-COVID: 51% of respondents in the June 2020 survey said sales of designer jewelry have been down—the largest drop among the areas surveyed (comparably, only 19% said designer sales had dropped in the February results). Additional areas struggling include pearls, watches, and charms.

Other jewelry categories are performing better: In the June 2020 survey, 38% of respondents said their custom sales were up from 2019. Custom sales took the top spot in the February 2020 survey, too. This reinforces the sentiment that shoppers are seeking personal, meaningful pieces that they won’t see everywhere else. Bridal continues to perform as well—not even a pandemic puts love on pause—with 23% of June’s respondents seeing increases (though that is a drop from February’s 52%). Colored stones took the biggest dip in percentage points from February to June (60% versus 23%), while diamonds and fashion/bridge jewelry rounded out the top sales categories. In terms of responsibly sourced jewelry, perceived to be of rising importance to buyers, 74% of those surveyed in February said they’re selling it, 51% said sales are up, and 47% reported a rise in consumer interest.

As the industry looks to move forward, it’s inspiring to learn that two-thirds of industry professionals still feel optimistic about the year ahead, despite the fact that fewer than half (46%) of those surveyed believe the overall U.S. economy will be doing better a year from now. “Our business survived the Spanish flu epidemic in 1918,” said one survey respondent. “We’ll survive this, too.”

Download all the results from the 2020 JCK State of the Jewelry Industry Report, here.

Copyright © 1995 – REED EXHIBITIONS AMERICAS, a member of RELX Group Inc. All rights reserved. Reprinted with the permission of REED EXHIBITIONS AMERICAS.Read from the Source

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