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Jewelry Expenditure Rises amid Stunted Growth, Millennials Stepping Off the Plate

Jewelry Expenditure Rises amid Stunted Growth, Millennials Stepping Off the Plate
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According to a new survey of the US consumer market, even though Americans increased fine jewelry and watch purchases in 2014, the rate of growth declined. This reaffirms other indicators that while 2014 was a year of growth, it was a stunted growth.

According to the 2014 Mid-Year Consumer Expenditure Survey, in the period between July 2013 and June 2014, the average consumer expenditure on jewelry and watches increased 2.4% year-over-year (2013-2014 vs. 2012-2013).

In 2013, the average consumer expenditure on jewelry and watches stood at $612 per household. According to the latest survey, the average expenditure per household increased to $615 during the second half (H2) of 2013 to first half (H1) of 2014 period.

Jewelry and watch sales increased 1.8% year-over-year in H2 2013, whereas in the following six months (H1 2014), the rate of growth slowed to 0.6%.

Jewelry Expenditure: A Ray of Light

This decline in the rate of growth is a worrying trend; however, it does hide some good news. Based on the survey findings, not only is spend on jewelry and watches maintaining its share of wallet, it is possibly even increasing.

The fact that total expenditure by Americans did not increase much in the period may explain why spending on jewelry was stunted. It also must be kept in mind that the jewelry industry is not a very large one (Americans spend more on pet food than on jewelry), and the margin of error in the survey is large enough to swing real share of wallet in either direction – growing or shrinking.

Millennials Lose Spending Power, Boomers are Back

The steady yet slow growth of the American economy, which suffers from a lack of growth in salaries, seems to have impacted Millennials in particular.

Total spending by this age group fell 3.8% year-over-year. No wonder then that after a period of being the biggest spenders on jewelry, the 25-35 age group spent near to average in the 2013-2014 period compared to 28% above average in 2013 alone. This means that the sharp drop in purchasing took place in the first half of 2014.

On the other hand, the 45-54 age group, the tail end of Baby Boomers and the early Generation X-ers, are enjoying above average income per household and are spending 87% more year-over-year on jewelry and watches.

Although jewelry spend is based on taste and fashion, consumer habits in 2014, at least during the first half of the year, suggest that, as always, the economy plays an important role in deciding how much we are spending on jewelry. This is not to say that the jewelry pipeline is powerless – on the contrary. Much can and should be done to boost interest in jewelry.

Jewelry Expenditure Rises amid Stunted Growth, Millennials Stepping Off the Plate - Edahn Golan

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Comments 6
  1. The last sentence of the blog is key. The diamond industry when DeBeers was in charge promoting diamonds and developed products and programs around selling diamonds has been lost. None of the major players have picked up the ball and the consequence has been a focus on electronics, retirement, and vacations.

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  3. The market is monopolistically competitive in my opinion. I am Raj Kotecha representing a diamond manufacturing from Surat. Do we have a common interest which will serve to unify the entire industry?

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    Dear Vivian, not in a month, but in six months plenty has changed and now I can add that the change is even deeper. The report published in March reported that the 25-35 age group was the top spender in 2013 – the year with the latest demographic expenditure data available at the time. In April I could already report that based on the mid-year data (which covers July 2013-June 2014), this age group was spending less on fine jewelry and watches.

    This age group exhibited a rise in interest and spending on this category and then abandoned it for other products. Now that I have the full year data for 2014 (soon to be released), I can add that they have indeed moved away from this category. The reasons might be economic, cultural or a combination of the two.

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