John Trusler once noted: “No time like the present, a thousand unforeseen circumstances may interrupt you at a future time.” The English compiler of proverbs (1735 to 1820) perfectly described the importance of being proactive in diamond inventory management and sales for today’s retail jewelers.
This is especially true this holiday season. Given the incredible growth in jewelry sales this year, now is a perfect time to invest in diamonds and diamond-set jewelry inventory for the holiday season and beyond.
As many retailers will attest, consumer buying is up across the country with diamonds and diamond-set jewelry increasing monthly sales figures. “The times we’re experiencing today are unprecedented,” says Asaf Herskovitz, CEO of GN Diamonds.
According to Asaf, the unparalleled times the US and countries around the world are experiencing present “tremendous growth opportunities” for retail jewelers. Governments around the globe are pumping trillions of dollars into the global economy mostly in response to the ongoing COVID pandemic. In the US alone there is $6 trillion of newspending pumped into the economy so far in 2021.
Increases in government spending are putting inflationary pressures on many goods from food and fuel to building materials and common commodities. But the increased cost of such goods, and the ability and willingness to spend disposable income on luxury items, is being offset by other factors.
“What we have learned from 9/11 is when people are scared they get engaged more than ever,” says Asaf. “These days people want to feel good and they buy more jewelry. People are not travelling as much domestically or internationally so they have more disposable income to spend on a ring and a diamond. Additionally, weddings are smaller so their costs are less, again adding to a larger ring budget.”
Exceptional times are unfolding in many noticeable ways with consumer behaviors. Diamond sales are a strong indicator of such trends. The increased interest fancy diamonds are experiencing shows “an uptick of 7 percent” compared to the same period last year. This increase has created a 50/50 split between rounds and fancies, according to Asaf.
“We have never been in a time when rounds versus fancies are 50/50,” says Asaf.
As the holiday season gets underway, diamond sales throughout the year have been fueled by bread-and-butter goods leading with diamond stud earrings. Growth in tennis bracelet sales have skyrocketed. GN Diamond has recorded a 120 percent increase in tennis bracelet sales compared to the same period last year.
“Sales of 2-, 3- and 5-carat [total weight] are common with many women layering these styles of diamond bracelets,” says Asaf. “People are celebrating birthdays and anniversaries with exceptional price point gifts. Yoga pants and diamond bracelets are here to stay in all qualities and price ranges.”
This momentum is expected to carry into the holiday season and the first half of 2022. “We are seeing more disposable income than ever with a 40 percent increase and strongly believe all retail will do well [this holiday season],” says Asaf.
This holiday season retailers should consider going wide and deep on their diamond stud earrings inventory. The demand for tennis bracelets can’t be stated enough given the never-ending stacking and layering trend.
There’s also been an “unusual demand” for straight and graduated Riviera necklaces, according to Asaf. And, fancy shapes such as emeralds and ovals set sideways in engagement rings is a noticeable trend. Fancy shapes in general are enjoying a surge in sales.
“This holiday season we will see fancy shapes continuing to be strong with rounds still in the lead,” says Asaf. “Half-carats to 3 carats will be popular and there will definitely be major growth opportunities for all retailers.”
Good news, however, has to be tempered with not-so-good news. Retail jewelers, however, can avoid inventory outages and shipping delays with a proactive, time-is-money inventory management approach.
For starters, demand for diamonds is outstripping supplies. Demand is up 50 percent while supplies are down 30 percent in the global diamond pipeline, according to Asaf. Much of this is related to workers not returning to their jobs in other countries because of vaccine and work restrictions due to COVID.
This supply and demand dynamic has resulted in a price increase of 15 percent for diamonds. Costs of good will more than likely go up another 15 to 20 percent by the end of the year. Shipping goods has also become problematic.
“FedEx last quarter has reported that costs have gone up by 70 percent because of lack of staffing and increased costs to create a safe environment,” says Asaf. “We are experiencing delays in all shipping categories.”
In looking ahead at 2022, Asaf says: “The [proposed] $1 trillion-plus infrastructure will be tremendously good for the luxury market next year. But retailers need to start stocking diamonds and diamond-set jewelry now to avoid supply shortages, cost increases, and shipping delays.”
Time is of the essence for retail jewelers. Chances are many jewelry store owners have stocked up on their diamond essentials. Examine your inventory and start filling gaps.
Be sure to have the diamond essentials on hand, available at various price ranges and qualities, that speak to diamond jewelry trends – chiefly diamond stud earrings and tennis bracelets for layering and stacking. Invest more than usual in fancy shapes. Consumers are showing great interest in fancies in ways the diamond industry has never witnessed.
“The jewelry industry as a whole is doing very well and has been very resilient in these challenging times,” says Asaf. “Now is the time to step out of your comfort zone and buy inventory, knowing that there is no risk utilizing GN’s guarantee on loose and finished diamond jewelry.”