Jewelry: A Cross - Generation Purchase
October 09, 06
Young Consumers Only Bought Engagement Rings Older Consumers Purchased Jewelry As A “Life Cycle” Purchase By the time consumers reached age 50, demographers theorized, their children were gone from home, the college bills had been paid, the first and second mortgages were paid off, and the boat / beach cottage / mountain home were paid in full. Thus, consumers had ample discretionary income for luxury purchases.
For most of the second half of the previous century, America’s best jewelry customers were middle-aged consumers. Year after year, the group of shoppers aged 45-54 spent more on jewelry than any other demographic age group in the U.S. (see graph on the right, left-hand bar).
While there has also been a market of young consumers who bought jewelry, it was represented mainly by engagement ring buyers in their twenties (men typically marry at age 27 and women typically marry at age 25 in the U.S.). However, once the engagement ring was purchased, these couples rarely visited their family jeweler. Other costs related to their household formation – furniture, automobiles, children, education – typically chewed up most couples’ household budgets.
Because jewelry historically has been bought by older consumers who had reached an age where they could afford luxury goods, demographers theorized for years that jewelry was a “life cycle” purchase related to age. They said that jewelry demand was driven by both age and income.
For many years, demographers predicted that the conspicuous spending Baby Boomers, who comprise roughly 30 percent of the U.S. population, would become a huge consuming group for jewelry and other luxury goods right around the time they hit age 50. The first Baby Boomers hit age 50 in 1996, and will continue to turn age 50 at the rate of about 11,850 per day between now and 2016.
Jewelry Spending Trends By Age Are Shifting
Unfortunately, the Baby Boomers didn’t get the message that they were expected to make heavy jewelry purchases beginning at age 50. Further, other age groups defied traditional trends, and have begun to purchase jewelry at different times in their life from their predecessors. Research from the Department of Commerce, based on the Consumer Expenditure Survey, shows several trends as illustrated on the graph below:
No matter how you analyze the new data from the U.S. Department of Commerce, there are some unmistakable conclusions:
All ages buy jewelry - Virtually all consumers, regardless of age, buy jewelry.
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- Age 25-34 - The propensity of consumers aged 25-34 to purchase jewelry has risen consistently for the past six years. These young consumers have the second highest jewelry expenditures per household in the U.S., driven primarily by engagement rings and jewelry as gifts. By generation, this age group represents mostly Gen-X’ers and a few early Millennials.
- Age 35-44 - While this group of Gen-X’ers’ per-household spending is just above the national average, the market size – defined as the total households in the age range times their jewelry expenditures - is the largest in America.
- Age 45-54 - This group, comprised of Baby Boomers, has been a disappointment in terms of per-household jewelry expenditures. However, aggregate jewelry spending by this group of consumers represents nearly 20 percent of the total jewelry market in the U.S.
- Age 55-64 - Consumers in the age range 55-64 have shown a sharp increase in their jewelry purchases. Not only are their per-household expenditures on jewelry the highest of any age group, but this market consumes about 22 percent of all jewelry sold in America.
- The only two groups that are not significant jewelry buyers are consumers younger than age 25 and consumers who are over 65 years old. These buying patterns of these two groups are essentially unchanged over the past decade.
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Demographers had previously segmented consumer groups with a propensity to purchase jewelry using traditional generational monikers - Baby Boomers, Gen-X’ers, Millennials, etc. Usually these generational monikers correlate to purchasing trends. For example, Gen-X’er’s are generally not recreational shoppers; they prefer to “live simply.” However, for jewelry, it appears that generational segmentation is not particularly meaningful. The table above outlines information about the key generations in America.