Did a troubled 2017 promise growth in 2018?

| February 13th, 2018

Did a troubled 2017 promise growth in 2018?
"Did a troubled 2017 promise growth in 2018?"

Is the diamond industry moving forward? Is it on a growth track? Is it taking steps that would lead it to capture market share from other luxury goods, greater share of wallet, or at least improve its margins? Looking at 2017, it was somewhat better than 2016, which in turn was an improvement over 2015. Yet an uneasy feeling is lingering around, reminding us that “better” is conditional at best.

Although diamond jewelry retail sales were not very good during most of 2017 in the US, there were improvements in China and India, the second and third largest diamond jewelry consumer markets. The midstream of the diamond pipeline had a tough year, but not as bad as the previous one. Miners found that they too need to be innovative, and took steps in that direction.

Retail

In the last two weeks of December, a sudden surge in sales took place, especially felt in the US market and in trading centers. Independent specialty jewelers reported that last-minute sales were higher than expected. In response, many retailers were quick to pull goods from wholesalers in Mumbai, Israel, and Antwerp.

Consumer demand was largely characterized by purchasing higher price point diamond jewelry items from specialty jewelers, mainly independents, while those looking for a low-cost item turned mostly to department stores and online retailers. The latter did better than usual, capturing a growing market share of the lower-cost diamond jewelry category. According to Mastercard SpendingPulse, online jewelry sales started early in November and were especially strong, thanks to heavy promotions. Overall, it estimates jewelry sales rose 5.9% year-over-year, outpacing overall holiday retail sales growth, which stood at 4.9%.

Amazon reported a record holiday season, without disclosing specific figures. Remember that Amazon is a volume player, especially in jewelry, with many of the jewelry items it sells of very low value. Fine jewelry best sellers were mostly below $50.

Strong online jewelry sales during the holiday season were not limited to general merchandisers such as Amazon. Signet reported online sales of $210.5 million, up 47.7% year-over-year, an important turn from the poor performance that hurt the company during the 2016 holiday season.

Signet-Jewelers-2016

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Source Edahngolan.com

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