First half of 2019 proved difficult for US jewelry and watch sellers

(IDEX Online) - Things were not  - yet - looking up for retail jewelers during the month of June. Now half-way through this calendar year, retail jewelers, both the independents, or the Mom & Pop stores as they are often called, and the retail jewelry chains, continue to see less foot traffic and therefore less sales. While in May 2019 watch sales were still positive, in June they dropped 2.7 percent, while jewelry sales tumbled 9.1 percent, compared to the same month in 2018. The Jewelers Board of Trade reported that at the close of 2018 there were 25,102 jewelry companies active in the USA, of which about 3,625 were wholesalers and 2,503 manufacturers. In the US, the jewelry business as a whole provides employment to about 165,000 individuals. 

Looking at retail sales in general, the jewelry sector is among the few retail sectors that continue to see a slump in sales. Retail sales rose 0.7 per cent in July, compared to 0.3 percent in June. Online retailers, grocery stores, clothing retailers and electronics stores all are doing well. Other sectors such as sport goods and equipment are, like jewelry, still suffering from a slowdown.

Both independents and chains see sales drop further

In June, the specialty jewelers or independents, i.e. family-owned retail jewelry operation, and the - larger - chains continued to underperform compared to the same month of 2018.   The independents saw sales drop with as much as 13.3 percent compared to June 2018 while for the chains, total jewelry and watch sales dropped 8.1 percent. 

Looking at the upcoming holiday sales season, jewelers have good reason to worry. From September 1, 2019, diamonds, gems and jewelry imports from China are subject to a 10 percent tariff, affecting some $13 billion worth of goods that are expected to be imported toward the holiday season. A coalition of US jewelry industry leaders have been trying to avert the verdict but in spite of their efforts, which included a high-brow delegation led by David Bonaparte of Jewelers of America (JA) to Washington in July, jewelry products were not included in the products exempted until December from the 10 percent tariff hike. 

US jewelers hope their performance will improve toward year-end

Specialty jewelers had a hard time, again, in June. The steep drop in sales, 13.3 percent compared to the same month in 2018, was unprecedented, as can be seen in the chart below. However, in the retail landscape they are operating in, market developments are not as bad as they seem. In a report released by IHL Group, named "Retail Renaissance - A Growth Story," which was quoted extensively by the National Retail Federation (NRF) it was pointed  that brick-and-mortar retail stores "are definitely not going away. For each company closing stores, 5.2 are opening stores. For every segment of retail, there are more companies opening stores than closing stores. Even the much-maligned department store category has more brands opening stores than closing them," the report said. This offers opportunities for retail jewelers, who, operating within their local communities, can improve their storytelling, enhance their profiles and reputation. 

For the first time in this calendar, watch sales were also down, dropping 2.7 percent compared the parallel month in 2018.

 Outlook

Looking at the bigger picture, however, it is clear that change is needed to attract the consumers' attention and make sales. The National Retail Federation said that consumer expectations are evolving and that retailers must clearly invest heavily to improve the in-store experience. Quoting from a recent survey, the NRF said that two-thirds of consumers say that technologies such as augmented and virtual reality, smart dressing rooms and in-store navigation apps have improved their in-store experiences. The NRF, however, emphasized that the smaller retail operations, of which the independent jewelers are part and parcel, remain the strong basis of the consumer market easy to forget that retail is an industry dominated by small business: "98 percent of retail is made up of small businesses. This segment's vibrance is encouraging because it represents the future of our industry. There might well be a small business opening its first store today that will become a dominant player in the next decade. The retail landscape 10 years from now will likely be one where stores still play a vital role in the shopping experience," the NRF noted.