Deborah A. Yonick, our US columnist, has worked with and currently freelances for leading gems and jewellery publications.

Gem bead jewellery from Eve Alfille

US retail jewellers, at presstime in mid-December, reported solid business for the holiday season. Although reluctant to reveal anticipated sales gains, many retailers expect high single- to low double-digit increases for the fourth quarter and year-in-total over 2003.

“Our expectations for the holidays are high,” said Mark Michaels of the 12-unit Michaels Jewelers in Waterbury, Connecticut. “The stock market is strong, the economy is moving forward, and oil prices are headed down. People are feeling optimistic and spending again.” Susan Eisen of Susan Eisen Fine Jewelry, El Paso, Texas concurred: “I expect to be up 10 per cent because of larger diamond sales.” She noted that the holiday season started out quiet, then erupted. “Everyone woke up and all converged at once.”

Many retailers reported a lull in business prior to the presidential elections in early November. For Mark Mazzarese, president of Mazzarese in Leawood, Kansas, business was slow in October. “A lot of people were torn over the elections, there was negative advertising, and the issues were all over the place. People didn’t feel like shopping. As soon as the elections were over they came out and sales have been on the upswing.”

But some jewellers, such as Eve Alfille of Eve Alfille Designs in Evanston, Illinois, were waiting in mid-December for the Christmas rush to begin. “Traffic this year is sparser,” described Alfille. “For the first time in years, we’re still in the red. Hopefully, in the last two weeks of the season we’ll break even. Election years are always bad; this one was the worst. My Democratic customers are depressed. The stock market, which for my fairly well-heeled clientele is an important factor, is not all that favourable, nor is their confidence in the economy.”

Best Sellers

Rings from Susan Eisen

Diamonds remain a holiday favourite for most jewellers. Eisen said all types of diamonds were selling. “Our own diamond brand ‘Forever Fire’ is allowing us to educate our customers about fine cuts without being dependent on one brand alone, giving us more control of pricing, stock and memo goods. We have long-term relationships with most of our diamond vendors and the respect and value we share always comes through at Christmas time.”

According to Mazzarese, three-stone diamond jewellery has become the new basic in everything from engagement rings to pendants and earrings in all shapes. He also noted that diamond hoops are still in fashion. And the diamond right-hand ring is opening new markets. Jewellers also cited diamond watches and bracelets as good sellers for the holidays.

Tiffany

Merritt Mayher, president and CEO of the two-unit Shreve, Crump & Low in Boston, said square and traditional emerald cuts are diamond favourites. She also noted sudden demand for pear and oval shapes. Added Elizabeth Parker, of Curt Parker Jewelers in St. Louis, Missouri, “One-carat marquise diamonds are flying out the door. I’ve sold more in the last month than in the previous 10 years.”

	Multi-sapphire bracelet from Michael Babinski.
	Hearts on Fire 3-Stone Rings.

Many jewellers reported strong interest in colour diamonds, particularly yellow, pink, blue, black, and champagne, especially as accent stones or in pave designs with white diamonds. “Some of our wealthy customers have been snapping up my new collection of black and white diamond necklaces in the $10,000 to $20,000 range,” said Alfille.

Mayher also cited demand for blue and fancy sapphires, particularly pink. Mazzarese said that in addition to more interest in fine sapphires, rubies and alexandrite, he had seen rising demand for tourmalines in pink and green. Michael Babinski, owner of Foxfire Jewelers in Woodinville, Washington, has been doing wonderful business with multi-colour sapphire princess-cut tennis bracelets, retailing for $4,000 to $5,000. “We’ve complemented the bracelet with a suite of multi-sapphire jewellery including earrings and a necklace that are selling well.”

But Alfille said she is selling fewer gem bead necklaces this season than last, even though they are priced mostly under $200. She reported that gemstone rings, a speciality and usual favourite, haven’t been selling well either. “One new phenomenon is that more of my customers are shopping for gems on the Internet, I think for the thrill of the chase, even though I have a large inventory to show them.”

Deborah Hutcheson, owner of Charles Hutcheson Fine Jewelry in Reading, Pennsylvania, said yellow gold is making a comeback in big, chunky styles that are Indian-influenced. Moreover, watches with gems and colourful bands are popular for ladies. And sales for dress watches in diamonds for both genders are robust.

Brand Recognition

Fancy colour diamond jewellery from Harry Kotlar

As branding has become the wave of the future for the diamond and jewellery business, MVI Marketing of Paso Robles, California posed branding questions to 2,360 members of its Jewelry Consumer Opinion Council (JCOC) in October.

Recognition of most brands of diamonds and jewellery was very low, but more than 89 per cent of respondents were familiar with the Zale brand. Cut and clarity of diamonds were most important to JCOC members, with brand name least. In the diamond buying experience, guarantees and certifications were most important, with brand name least. Although more than half would not pay a premium for branded diamonds or diamond jewellery, more than one-fifth would spend over 10 per cent. Price, craftsmanship and quality are critical; which celebrities are wearing the brand, the ability to meet the designer and packaging are least important.

The study revealed low recognition of jewellery brands. “With the exception of Zale, Hearts on Fire, Tiffany, Vera Wang and Mikimoto, most consumers were unfamiliar with any diamond, gem, pearl or jewellery brand,” reported Destin Gillham, research manager for MVI Marketing, creator of the JCOC. “What consumers did indicate was confusion between the retail store name and jewellery brand. Often, if consumers bought a diamond from a chain store, they believed it was a “chain store” brand. Consumers strongly associated branded jewellery with retail chains. It’s unclear how consumers define a brand, but they’re likely to consider where they purchased it to be synonymous with the item’s brand name.”

Gillham said few consumers recognise a brand’s value in the jewellery purchasing process. “If a manufacturer or retailer can establish a recognised brand and develop a positive image, it’s advantageous. Consumers are seeking a high-quality, consistent product and will pursue a brand that delivers that, but will not be tempted to purchase jewellery simply because of superficial devices like packaging.”

Looking to the future, savvy luxury marketers should prepare for the paradigm-shifting changes already taking shape -- the age of experiences (2010-2020), advised Pam Danziger, president of Unity Marketing in Stevens, Pennsylvania and author of Let Them Eat Cake: Marketing Luxury for the Masses -- as well as the Classes.

“Right now we’re mid-way through the luxury decade, and if marketers aren’t already tapped into the luxury market they may be a little late,” explained Danziger. “With Americans’ standard of living so high, consumers are hankering to satisfy higher-level emotional needs. For more Americans with an excess of material goods, self-actualisation will become the ultimate goal. Our culture is moving beyond the pursuit of material things. In the search for more meaning, people discover that experiences are the source of their greatest satisfaction.”

According to Danziger, the “Me Generation” will morph into the “We Generation”. The future focus will be inside, rather than outside, so consumers will crave products, services and experiences that develop their mind, body, heart and soul. “Luxury marketers who’ve learned the lesson of selling to consumers’ experience will be well-positioned to evolve their business model in the new age of experiences.”