Valentine’s Day exposes both the weaknesses and strengths of the diamond and jewelry market. For a product so driven by the idea of commitment and relationships, the holiday should be a coup for the industry, a second Christmas if you like. At the same time, one cannot help but feel that the industry doesn’t take full advantage of its potential.
The diamond industry naturally looks toward gift-giving seasons and occasions to boost sales. In the clearest example, an estimated one-third of diamond jewelry sales are geared toward the engagement and wedding market, while the typical retailer makes about 30 percent of its annual sales in the run up to Christmas during November and December.
Extending that to other gift-giving holidays, a recent chart published in the De Beers Diamond Insight Report showed a slight bump up in jewelry sales for Mother’s Day in a typical year and a smaller spike around Valentine’s Day.
At least in theory, Valentine’s Day is perfectly positioned in the calendar for jewelry to perform better. For one, it coincides with engagement season in the U.S. Also, fresh after Christmas, consumers might be looking for ways to use those gift cards received in December, or avenues to spend their end of year bonuses.
[two_third]Still, jewelry ranks surprisingly low in consumer preferences for the day. In fact, jewelry barely features as a gift of choice for those planning a romantic night out. A survey by the Georgetown Institute for Consumer Research, sponsored by KPMG, showed that the top five gift categories that women expect to receive for Valentine’s Day are candy or chocolates, flowers, cards, a meal and something non-material, all well ahead of jewelry. Similarly, men expect to receive cards, non-material gifts, a meal, candy or chocolate, or something homemade.[/two_third][one_third_last]
“Still, jewelry ranks surprisingly low in consumer preferences for the day.”
Another survey by Statistic Brain Research Institute estimated that 17.3 percent of consumers planned to buy jewelry for Valentine’s Day, falling behind cards, candy, dining out and flowers in the ranking of most popular gifts. The National Retail Federation (NRF) found that 21 percent of respondents to its Valentine’s Day survey planned to make a jewelry purchase while only 11 percent of shoppers planned to visit a jewelry store to make the purchase.
Part of the challenge may be that Valentine’s Day is not a very widely celebrated holiday. Just 51.4 percent of respondents to the Georgetown Institute’s survey said they planned to purchase gifts at all for Valentine’s Day. And of those, 23 percent of men said they plan on giving their significant other jewelry as a gift, while 4 percent of women had jewelry in mind.
It’s not all bleak however, as the NRF forecasted that jewelry sales would reach $4.8 billion this Valentine’s Day. IBISWorld expects spending on jewelry to rise 5.6 percent to $1.6 billion with total retail spending forecasted to improve 3.8 percent to $19.56 billion this holiday.
Therefore, while jewelry is far from the gift of choice during Valentine’s Day, sales are growing. However, growth is typically driven by low-priced items. Silver jewelry, for example, is said to be popular during the holiday.
“It’s not all bleak however, as the NRF forecasted that jewelry sales would reach $4.8 billion this Valentine’s Day.”