In 2020, the average US household purchased $475 worth of jewelry, up 9.8% from 2019. The sharp rise in spending on jewelry was one of the most outstanding outcomes of what was otherwise a very miserable year.
What makes this finding even more remarkable is that the average total expenditure by US households actually declined 2.7% to $61,334, based on the latest Consumer Expenditure Surveys. This means that although people spent less overall, they spent much more on jewelry.
Average income per household edged up to $84,352 in 2020. With the average expenditure declining, US consumers saved more of their income, yet allowed themselves to splurge on jewelry.
This is the second year in a row that average expenditure on jewelry has increased. In 2019, it rose by 9.2% against a rising economy and a booming stock market.
Spending on Jewelry: Top Spenders
The profile of those spending the most on jewelry tells an interesting story about American society and economics, especially in the Year-of-the-COVID.
According to our analysis, the largest spenders were people aged 45-54 with a pre-tax income of $200,000 or more, living in the largest US cities. This demographic is employed as managers and professionals and holds a master’s, professional, or doctoral degree. And, they tend to be white.
This is also the profile of people least affected economically by the pandemic.
That said, this group was far from being alone in their increased appetite for jewelry.
Top Jewelry Buyers: Age
The 45-54 age group spent on average $792 per household. This is also the age group that had the largest increase in spending on jewelry, up 113% year on year.
In 2019, the top spenders were 25–34-year-olds. Their on jewelry spending fell more than 20% in 2020, and for obvious reasons – a halt in weddings due to COVID-19 and social distancing.
In 2020, the average age for men at first marriage was 30.5, and for women 28.1 years old. This is part of an ongoing rise in the average age of marriage.
Other age groups that increased spending on jewelry in 2020 were 35-44-year-olds, and people 65 years and older.
Top Jewelry Buyers: Income
By income, the top income bracket of $200,000 and more has always been the group spending the most on jewelry. In 2020, they averaged $2,255, nearly 7% more than in 2019.
Even though historically they have been the leading spenders on jewelry, it seems that the gap between this group and others is only growing. In 2016-2017, the +$200k income group spent nearly triple the national average. By 2020, it jumped way past triple the national average to 375%.
Surprisingly, the income bracket that increased their spending the most on jewelry in 2020 were those with the lowest incomes: less than $15,000. This group’s jewelry expenditures leaped a massive 475.2%.
One common explanation for this is that many in this bracket have undeclared income, often in cash. That said, their average expenditure per household was just $204 or 1/11th of what the top income bracket spent.
Other Key Findings
By education, those reporting that they were not high school graduates had the largest jump in spending on jewelry, up 130.3% compared to 2019. They spent $171.
By occupation, those working in groups or closed spaces – such as clerical, sales, and fabricators – reduced expenditures on jewelry.
Another demographic that reduced jewelry spending were those living in rural areas, down 55% to $320 per household. Almost all urban areas saw a rise in jewelry expenditures, mainly in urban areas with populations of 250,000 to 1 million, which jumped 91.5%.
Putting It in Context
Once again, we see that when people feel that life is in peril – when they feel under a threat, be it economic, due to a natural disaster, or even security related, they turn to jewelry. Not exclusively, yet very consistently.
The rise in spending on jewelry while consumers’ overall expenditure shrank is good news for the jewelry industry on all fronts. It underscores the value people put on jewelry. This is a reversal of the trends we saw in past years, such as in 2014, when the survey found that spend on jewelry fell on average 23%.
The news is especially good because the rise in jewelry sales has extended deep into 2021. To date, jewelry sales in the US has risen more than 32% compared to 2020.
And yet, we need to take this good news with a grain of salt. The drop in travel, avoidance in populating stores and shopping areas, and early signs of rising inflation, as well as lingering concerns of the future may have prompted consumers to seek solace in jewelry, but this situation will end all too soon.
And when it ends, we should expect a decline in jewelry sales. At the very least, we will see a decline in share of wallet.
Another reason for caution is oversaturation. At some point, attention will gravitate to other expenditures. The ongoing rise in house purchases and prices is one example. The S&P/Case-Shiller seasonally-adjusted national home price index rose by an amazing 19.84% in the 12 months ending in August 2021.
The US inflation rate is rising quickly, hitting a 13-year high of 5.4%. Rising prices may also tend to impact consumer demand.
As a piece of practical advice, the rise in jewelry spending underscores the importance of jewelry to our lives. So when planning jewelry or diamond marketing campaigns, focus on that role.
For more specific demographic analytics and the data behind these trends that you can use in planning your marketing, please contact us.
About the Author: