Rapaport Magazine
Markets & Pricing

Valentine’s day spending gives sales a boost

After a strong start to the year, jewelers foresee a shift in the way they do business.

By Lara Ewen
Stores were reporting robust January numbers after a middling Christmas, and some retailers even said they were seeing good Valentine’s Day gift sales after years of consumer disinterest in February jewelry gifting. As the year unfolds, retail is expected to shift even more toward omni-channel, with digitally native brands opening brick-and-mortar stores, and traditional retailers seeing more traction in their online sales. Yet attendance at trade shows is expected to drop, especially given the rise in custom orders.

Seasonal highs

Consumer interest in lab-created stones has been helping boost business at online jeweler Vrai, according to CEO Mona Akhavi. Lab-grown producer Diamond Foundry acquired the company in 2016. “We’re seeing a strong beginning of the year,” reported Akhavi, adding that she was seeing particular success in the fine-jewelry and bridal sectors. She attributed the good sales figures to an increase in consumers who were better educated about sustainable practices and synthetic diamonds.

Sales were also steady at brick-and-mortar businesses. “[I] just went through my 43rd Christmas season,” said Benny McNair, owner of McNair Jewelry in Gadsden, Alabama. “Business has been very good, and it’s been a very strong January. The economy is better, and customers are spending money. Over the last year or two, it’s been good.”

Keith Hurdle, owner of Hurdle’s Jewelry in Boulder, Colorado, said February was looking good, too. “Valentine’s Day [activity] is kicking off a lot earlier, although it’s never a big time for us,” he said. “But Christmas was soft until we kicked off a big sale.”

Shows and no-shows

Looking ahead to the trade-show season, retailers said they weren’t yet sure whether they’d be attending many of them. “We haven’t gone to many [trade shows] in the past, but that doesn’t mean we will not this year,” said Akhavi, adding that she had not yet committed to anything.

Show attendance has been lighter than usual in recent years, according to McNair. “I went to the JA show in New York City in August,” he said. “It was somewhat subdued.” He added that he didn’t plan to attend any shows this year. “I really need to go to the Vegas shows, because it’s been several years, but I don’t enjoy it. I don’t like the heat and crowds, and I have all the suppliers I need.”

Nor will he be at the March JA show or at Jewelers International Showcase (JIS) in Miami, Florida, he continued. As for the Atlanta Jewelry Show in Georgia, “I don’t like [it], although I understand it’s getting better,” he said. “It’s close to me, but it’s still a hassle.”

Hurdle, who went to the February show in Tucson, Arizona, said he didn’t go to many shows anymore. “I just go to Tucson and JCK in Vegas,” he said. “I see my watch vendors at JCK, and even they’ve been cutting back.” A lot of it is due to changing customer demand, he maintained. “We do so much custom work that I don’t need to see my vendors. No one is coming out anymore anyway, and we can handle inventory control here.”

A rosy outlook

Hurdle said he had “never been one for prediction, and I’ve been doing this for 40-some-odd years.” However, he noted, “we’re already seeing our online sales increasing, and we’re going to be remodeling this year.”

Akhavi, too, pointed to growth. Alongside improvement in the lab-grown market, she said, “our business is growing exponentially.”

She plans to open a retail location this spring, in addition to the company’s appointment-only showroom in Los Angeles, California. “We had done a series of pop-up shops this past year that were incredibly successful,” she said. “[We] wanted to meet the demand from clients that are looking for a high-touch experience.”

In Alabama, McNair was equally optimistic. “The economy is good and people are fed up with complaining, and the mood is better,” he said. “So new customers are coming in, and we had a lot of new faces, a lot of referrals. Which is good, because some of the old customers start to get all bought out after a while.”

By the numbers
  • Americans were expected to spend a record $27.4 billion for Valentine’s Day 2020, according to Coresight Research.

  • Of 132 jewelers that Instore surveyed, nearly half reported a rise in sales during the three weeks before the February 14 holiday.

  • Pandora expects revenue to fall 3% to 6% this year following a drop in consumer sentiment in China. The impact of the recent coronavirus outbreak could further hit the jeweler’s sales.

  • Nearly half of women in an MVI Marketing survey said they would most likely spend under $400 for their next jewelry purchase; 15% planned to shell out between $400 and $699.
  • Article from the Rapaport Magazine - March 2020. To subscribe click here.

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