It's not (at) all bad news for retail jewelersMay 02, 19
In a few days, the May edition of IDEX Magazine will be uploaded, and with it, a new cover story will see the digital light of day. The story will review three generic diamond promotion campaigns: one that was created, but never launched; another that was created, launched and then killed; and a third that was created, launched and is still alive, but not getting the attention it merits.
First, it was a relief to finally stop writing about lab-grown diamonds (LGDs). As I see it, the entire supply pipeline has been giving these products way too much attention and credit in its obsession with this niche product, and its continuous insistence to see LGDs as a major threat to the diamond industry and trade's survival is both emotional and irrational. I wish that just a fraction of that same emotion were channeled toward promoting diamonds...
Therefore, it was good to return, as we did in the April issue to writing about the marketing of diamonds, in particular about generic diamond promotion initiatives. You'll read all about it next week.
However, the beginning of the month is also the time when we look at the performance of the diamond and jewelry market in numbers. The performance of polished diamonds is reported in the IDEX Polished Diamond Price Index, while the US jewelry market - which is still, but not for much longer - the world's number one market for diamonds and jewelry, is covered in the IDEX Research Report.
While April is generally a slow month in the diamond trade, it seems that the market's mood last month was nothing short of apathetic. The US jewelry market is also not flourishing, as the data show.
But do sales numbers and stats for diamonds and jewelry tell us the entire story?
Of course not! Numbers only represent the performance of people - the sellers and the buyers.
So, let's take a look at the sellers.
In April, the Jewelers Board of Trade (JBT) published an excellent set of data on the retail sector in North America (the US and Canada), listing the total number of retailers, wholesalers, and manufacturers, along with new business openings and closures, as well as consolidations, mergers and, of course, bankruptcies.
Here is some encouraging news. While in the first quarter of 2019, the jewelry manufacturing, wholesale and retail sectors lost 864 companies, that pace is slowing down significantly - as much as 68 percent compared to the first quarter of 2018. Also, more businesses opened, fewer were sold or merged (-42 percent), and bankruptcies were negligible. Negative rating changes - one of JBT's most important and appreciated services is its rating system - were down. The number of claims filed with JBT also dropped.
There is no denying that the number of retail jewelry doors keeps dropping. However, the data indicate that those who remain in business are healthier than before. At a time in which online retail business is claiming an ever-larger market share, this is good news. Recent research shows that brick-and-mortar retailers can and do use an online presence to their advantage, and that the one complements the other.
Of course, the data presented in the IDEX Polished Diamond Price Index and the IDEX Research Report will only improve if the down- and midstream markets help their retail clients sell more diamonds. For this to happen, the diamond trade needs to adopt a much stronger, active role in diamond promotion and not leave it up to only the miners. So, there is a lot of work to do!