The Future of the Jewelry Industry in 2015
No one has a crystal ball to predict the future, which can make business planning a challenge. To help make that task a little easier, we recently spoke with leading members of the industry to hear where they thought we're headed in the coming year and beyond. Obviously, everyone can base their opinions only on their own experiences and observations, but in reviewing their views of the future of the industry, you'll see several similaritiesmost notably that the industry will continue its slow but steady growth. So as you read through these musings, think about how their predictions will impact your business, and what you can do now to take advantage of the coming trends.
13 Minute Read
No one has a crystal ball to predict the future, which can make business planning a challenge. To help make that task a little easier, we recently spoke with leading members of the industry to hear where they thought we're headed in the coming year and beyond.
Obviously, everyone can base their opinions only on their own experiences and observations, but in reviewing their views of the future of the jewelry industry, you'll see several similarities, most notably that the industry will continue its slow but steady growth. So as you read through these musings, think about how their predictions will impact your business, and what you can do now to take advantage of the coming trends.
- Ruth Batson, CEO of the American Gem Society in Las Vegas
- Alan Bell, president of Rio Grande in Albuquerque, New Mexico
- Liz Chatelain, owner of MVI Marketing in San Luis Obispo, California
- Cecilia Gardner, president/CEO and general counsel of the Jewelers Vigilance Committee in New York City
- John Green, president and CEO of Lux, Bond & Green in West Hartford, Connecticut
- Ben Janowski, owner of Janos Consultants in New York City
- Dione Kenyon, president of the Jewelers Board of Trade in Warwick, Rhode Island
- Lee Krombholz, owner of Krombholz Jewelers/Just Like You Designs in Cincinnati
- Joel McFadden, owner of Joel McFadden Designs in Red Bank, New Jersey
- Wendy Yothers, incoming chair of the jewelry design department at the Fashion Institute of Technology in New York City
Custom Design Trends
Green: "I think we're going to see customization continue to grow. The design world is going to continue to evolve and become more important. As CAD and as the speed of the process continues to get faster, it's becoming a bigger part of most retail businesses. [Custom design doesn't take] much longer than custom ordering a production piece."
McFadden: "I think we can expect a lot more growth in customization. One of the big changes consumers have become aware of is the time frame for custom. Instead of a custom piece of jewelry taking three to six months, it's now three to six weeks. Technology, CAD in particular, has made customer delivery time viable. And customers are much more aware of this technology and how the industry is using it."
McFadden: "I've been seeing a lot of customers who want to recycle their jewelry. They don't want to buy materials. Many think the prices of gold and diamonds go up and down too much, and they don't trust the value of the material. It's also a non-consuming ideology. They don't want to dig more materials out of the ground."
Krombholz:"I think custom design is going to continue to grow until it hits the ceiling for businesses and they can't take on anymore work. [Our operation is] at the max for custom design. We can't find the crafts people to do quality custom work. There's a real need to find young people to come into the industry and train in the bench area. If custom is going to continue to grow, we need to have skilled people coming into our industry. Education will be critical."
Kenyon: "We're headed for a year of not-wild growth, but the kind of slow growth in line with [current] U.S. economic growth."
Green: "We're in an improving jewelry market [in the United States], albeit it's moving more slowly that we would like. It's not the roaring mid-2000's anymore, but growth will continue."
Chatelain: "Much depends on the state of unemployment. It's currently going down, which is good. More people are working, and more people are making more money. By next year I think you'll see the bigger companies raising their lowest wage earners up. When they do that, there's a snowball effect, and they'll raise wages for their next three levels up. Everyone's wages will be increasing, which will be good for jewelry because mass market consumers will be in the mindset to give and celebrate."
Kenyon: "The U.S. economy is the most stable in the world. It's growing slowly but it's stable, unlike Europe, which is going backward, and China, which is slowing down. Anyone making jewelry for export might experience a slowdown if they're exporting to the European or Chinese markets."
Janowski: "Unforeseeable geopolitical events aside, next year is going to be a better year. The American economy is slowly continuing to grow. We will see better business."
Batson: "Our members are still cautious, but optimistic, about 2015. The retailers in our membership are seeing slight increases for this fiscal year, but I think they're relying more and more on trusted brands and a wide range of price points. Our members have adapted, and have picked up market share from other independents that have gone out of business. In general, they're fairly positive about the market."
Chatelain: "The very highest end of the market will do well, and the lower end of the market is also projected to do well. The medium price points ($200 to $1,000) are expected to increase maybe 3 percent next year, but not much more."
McFadden: "I think the industry is surviving and will continue to grow. It will be slow growth. The cost of operating a business is going up, but if the price of metals continues to come down, it could boost the industry. I think we'll see some independent retail stores closing, but custom jewelers will take over to fill what's lost in the closings."
Bell: "It looks like the economy is going to continue to expand. With employment levels where they are, and the long desired increase in wages manifesting itself in 2015, it's a virtuous spiral upward. I'm optimistic that the economy will continue to move in the right direction, which will help everyone. 2015 should be a great year."
Consumer Buying: Category Trends
Janowski: "While [bridal] has been a critical and well-developed category, marriage rates have begun to decline. People are getting married later and later, or not at all. [According to the Pew Research Center, the median age at first marriage has never been higher for brides (26.5) and grooms (28.7). They also report that just 20 percent of adults ages 18 to 29 are married, compared with 59 percent in 1960.] At the same time, birth rates and immigration are both down. There's been a huge change in how people deal with their lives, and this will have an effect on bridal. Bridal will continue to be important, but it's changed. To be successful, especially in the face of much greater competition, companies will need to develop the image that they're the destination for that type of product; they need to build their image as being a bridal store."
McFadden: "While the drop-off in marriage rates could be a problem for the jewelry industry, I think it's less of a problem for custom design. Marriage is a sign and a symbol of an emotional commitment. For customers who don't value the emotional symbolism of marriage, they're not the type who would go to a custom jeweler. For couples that value the emotional ties, they are committed and more likely to get a wedding set custom designed specifically for them."
Kenyon:"With Baby Boomers and Millennials making up the bulk of the buying public, charitable, cause-related jewelry could grow next year. Millennials are concerned with social issues, and "health-related causes are close at heart for Baby Boomers, as they get older and lose loved ones. But people of all ages like to feel like they're doing good. They want to buy something and know that something they're wearing is doing good. It's a niche market that might not be explosive in growth, but it's one I'd pay attention to."
Chatelain:"I expect to see a lot more wearable tech jewelry. Already there are bracelets that light up to alert wearers of a cellphone call or message, and rings that can unlock car and house doors. It's pretty exciting stuff. Most of the companies in this market are start-ups and still in the process of securing funding and perfecting the technology part of their products. But by next year, I expect to see more of it available at retail."
Yothers: "Wearable tech jewelry is still in the conceptual stage but it's a little closer to implementation. Inventors have wonderful ideas, but the design is tertiary. The pieces function but they're ungainly and ugly. As jewelry makers we know about how people move and wear jewelry, and we understand the emotional and functional contexts of jewelry. Makers need to team with engineers to help with the practical and aesthetic applications for wearable technology. Actual work is happening, and stuff is evolving. I would not be surprised if there are ground-breaking innovations this [coming] year."
Batson: "The Millennial group has a strong desire to purchase estate jewelry with a story and a history. They're interested in refurbishing their grandmother's jewelry. They also have a desire for one-of-a-kind custom pieces, so estate and custom design are doing very well."
Krombholz: "Vintage will continue to be popular. In our store, vintage, both as a design style and as actual jewelry, has been very strong. Our store is based around fine jewelry, and new fine jewelry is more expensive than vintage or estate jewelry. Clients like the combination of a fine piece of jewelry at a more reasonable price."
McFadden: "Couples in same-sex relationships are a massive market for jewelry, and they're growing. They understand and value the emotional symbolism of marriage, and many are finally getting married because they legally can."
Kenyon: "Online buying is forecast to become 20 percent of total jewelry sales by 2020. While this will continue to creep up, I do think that consumers are still going to want to take delivery of a fine, unique piece of jewelry in person."
Bell: "There are a couple of trends that I think will impact the business next year. The first is the price of metal. Prices have come down a lot in the last year. Both gold and especially silver are at price points that make the retail prices more affordable. This bodes well for higher volumes of jewelry being sold. The second trend is that the distance between the makers and the consumers keeps getting compressed. This is beneficial to makers, who now have the world at their doorstep if they want it. The ability of makers to directly reach a consuming audience through the internet will be favorable next year and into the future."
Consumer Buying: Trends in Metals & Gems
Green: "Although there hasn't been a rise in demand for bridal, ladies are buying more yellow gold. If the price of gold stabilizes, I believe we'll see continued growth in yellow."
Chatelain: "Pink gold. The trend started in Europe, where pink gold was highlighted in every jewelry boutique. This will filter through different designers here in the U.S., and finally to more mainstream product. Tiffany already has an anniversary gold that's pink, and more U.S. designers have started highlighting pink gold. Eventually we'll see it more available at mass market price points."
Janowski: "Alternative materials have made jewelry really exciting. I've been seeing some really wonderful and creative stuff made from base metals, plastic, and many other materials coming out of all manufacturing centers, especially Italy, China, and Thailand. It's not fine jewelry, but the line between fine and fashion jewelry is blurred. Now you'll see bronze plated in gold or platinum, and looking great but selling for bupkis. A lot of manufacturers have shifted into that realm and are bringing great skills and abilities to the field."
Janowski: "We're confronting a steady decline in the world production of diamonds. De Beers, for example, has carefully managed what it's taking out of the ground, seeking to maximize price. Its Botswana mines probably only have another 20 years of life. There is some production coming in from Canada, Russia (now the largest producer), and elsewhere, but the gap between production and demand is growing wider. How is supply going to be met? Part of it will be man-made diamonds. Retailers will be showing consumers a natural diamond versus a man-made stone, and the price difference between them, which will be growing. They have many selling points: the stones could be made in the USA, they're not conflict stones, and they didn't harm the environment. People need to start thinking about this issue now."
Kenyon: "Lab-grown diamonds will be an interesting topic next year. I expect to see some debate over synthetic versus real, and whether or not there's a consumer preference because it's easy to prove provenance of lab-grown diamonds. I expect this will appeal to Millennials."
Janowski: "Fine color is disappearing, and good color is expensive. As mines are played out and governments restrict the opening of new mines, the lack of lower-priced fine color is going to become more and more of a problem. Recycling old stones will help, but the price of color is going to continue to be high. But despite the higher prices, I believe fine color will trend well next year. Rarity is a virtue."
Green: "Color has become acceptable again, and we're going to see some growth as long as the prices don't keep going up at a rapid rate. Fine color in particular has gone up tremendously. If pricing continues to escalate, color growth could stop. We could get to a saturation point and customers will go with lower priced options."
McFadden: "My custom design customers are looking for unusual colored stones. They're no longer motivated by sapphires, rubies, or emeralds; they want an unusual stone with cool design elements around it. The internet has opened things up for customers, making them aware of designs and elements they never knew were possible in jewelry. Today's customers know what they want, they just need to know if you can make it."
Legal & Financial Trends
Gardner: The Federal Trade Commission will probably issue updated guidelines regarding the labeling of jewelry products: "These guidelines could impact the way manufacturers label combination gold and silver products. It could impact how colored gemstone dealers disclose and describe treatments of colored stones, and it could impact pearl dealers and how they provide information on their products. We do expect a decision to be made [in 2015]."
Gardner: "I'm seeing an increased interest by the government to ensure our businesses are sourcing materials in a responsible way. The government isn't just interested in the environmental impacts of how companies are sourcing their materials, but also whether or not they're implementing anti-money laundering rules, dealing with legitimate companies, and how money is being used and where it's going."
Kenyon: "Capital is going to continue to be scarce. There aren't too many banks lending to the industry because there are risks around doing business with precious metals and stones. Some companies in the industry have been reluctant to become fully audited or disclose a lot of what banks would like disclosed. The industry can do some things to become transparent, including improving the quality and timeliness of financial reporting, simplifying corporate structure, and demonstrating compliance with all regulations that apply to their businesses."
Kenyon: "Our statistics show that the pace of consolidation has picked up a bit this year. Some of it has to do with the availability of capital to support or grow a business in light of reduced financing availability; some of it is succession driven. This can benefit companies with strong capital bases. I don't see this trend changing next year. While I expect to see more consolidation, there's still plenty of opportunity for those who are creative and run a strong business to succeed."
The award-winning Journal is published monthly by MJSA, the trade association for professional jewelry makers, designers, and related suppliers. It offers design ideas, fabrication and production techniques, bench tips, business and marketing insights, and trend and technology updates—the information crucial for business success. “More than other publications, MJSA Journal is oriented toward people like me: those trying to earn a living by designing and making jewelry,” says Jim Binnion of James Binnion Metal Arts.
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