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REAL GEMSTONES GAIN INVESTMENT VALUE

                         

We used to think luxury goods were immune to recessions.  Not any more!  While pockets of sales activity have recently enlivened the luxury sector, there are still major areas of sales trouble for the category. On one hand, some sections of luxury jewelry have been hit hard by the recession. But, at the same time, these same sectors have been remarkably resilient, quick to react to any bright spots in their sales patterns. 

In 2009, the lower end of luxury goods slumped badly, overall, while sales of the high to highest priced, limited-availability pieces improved. That has really helped boost otherwise bleak earnings.  Companies like Harry Winston, Tiffany’s, Chopard, and even De Beers are dealing with shifts in consumer attitudes and buying patterns to which they’ve had to adjust.   And adjust they have!

Jewelers have always stressed the emotional aspect of purchases, linking sales to personal milestones like engagements, marriages, birthdays, and celebrations of all sorts.   But look what’s happened!  The American consumer has abruptly switched from being a spender to a saver, thanks to the many economic woes of this recession.  So:

   Emotion plays a lesser role in purchases today as customers carefully consider the jeweler’s piece as an investment.  Is it truly worth the asking price?  Will it have lasting value?  Will it appreciate in value? 

This means that the luxury sector has to look at how it is selling its goods and, in many instances, restructure its entire marketing strategy. This is not just limited to luxury items.  Look at traditional patterns and you’ll see that as luxury jewelry goes, so goes jewelry in general. Sure, there are factors that differ between high and low end. But overall, a serious marketing change in one part of the industry will affect all parts of the industry.  Almost guaranteed.

 

                                       What’s It Worth?

Now, how do you figure out the present and future dollar value of a jewel?  Well, for gold, you simply check Wall Street’s Gold index on TV, the internet, or published in daily newspapers.  (As I write this, gold’s current price is $1,095 per ounce.  It has soared in value over the course of 2009, and gold “bugs” predict its price will go to $2,000 an ounce in 2010.)

   –Do you happen to have gold jewelry you aren’t wearing, and don’t think you will ever be interested in?  Now might be the time to sell! 

Up until recently, figuring the value of a diamond has traditionally been a more complicated story.  But now, people in the trade can simply check The Rapaport Price List.  This is a publication (subscription) that describes itself as “the industry’s primary source of diamond price and market information.  This list is the international standard used to establish prices in all the major markets.”  Bet you didn’t know that!

Like gold, large quality diamonds and other precious gems have been steadily going up in value.  Having

quick and reliable sales data tends to exaggerate whatever direction prices go as jewelers can easily track the latest sales.  That direction has been decidedly UP.

 

 

                                         Why Should We Care?

Well, many important trends start at the top and flow down pretty quickly these days to affordable retail levels.  For example, right now deep-pocket customers are seeking large stones, often choosing white or yellow diamonds.  The new motive for many buyers may be profit, because they believe these stones will significantly increase in value over the next few years. The immediate effect, however, is that they are boosting sales and setting a trend for Big, Beautiful Gems as the ultimate choice of buyers.  Large CZs, set in heavy gold or silver plate, mimic top-of-line gems and are taking on added sales power. Chunky gold plated bracelets have the look of Rodeo Drive elegance and are likewise on a fast sales track.

 

YOU CAN PROJECT THE LOOK OF REAL GEMSTONES WITH THESE TERRIFIC PRODUCTS:           

Upper clear crystal balances colorful lower emerald cut crystal

 

 

 

  • Sparkling Chrysanthemum Crystal Brooch – Lots of glitter!        

 3-D Filigree flower, layered petals set in antique silver plate

 

 

Most jewelers are not happy to see their fine wares viewed as commodities.  They think it’s crass. They think there is a lot more to jewelry than the weight of the gold or the size of the gemstone.  Those are just the basic materials. Jewelers understandably feel that they are selling art and creativity — extolling the craft, romance, and heirloom appeal of their pricey and artful designs. 

But, as always, the customer is king, and if the customer insists on bottom-line valuation and objective analysis of future appreciation, then that has to be a major part of the sale.  (There remain a number of “purist” jewelers, such as Chanel, whose design director’s wry comment on the current trend is “A stone is more than a commodity.  We are selling the creativity of the product.”)

 

   

 

                             IS THERE A LESSON FOR ALL OF US HERE?

 

You bet!  No one needs to be told to keep track of sales categories and buy more of what the customer wants to buy. If the government is right, and the recession is beginning to lighten up, there should be some subtle sales movement that you’ll want to cater to. Watch what your customer is buying now; you could get a glimpse of some important purchase changes shaping up for the year ahead!

 

HERE ARE SOME GREAT PURCHASE IDEAS THAT GET THINGS GOING AGAIN:

 

 

 

Comments (0) Posted by Mary McGarry on Friday, November 27th, 2009


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