On Data: 2021 Ended on a High Note, But ...

In a recent webinar with National Jeweler’s Michelle Graff, I joined Peter Smith and Edahn Golan to discuss what business in 2022 might look like. 

An interesting conversation among the four of us ultimately concluded it will be difficult to predict how long the tide will continue to rise for the jewelry business. 

In fact, if the last two years have taught us anything, it is to expect the unexpected, and there is every reason to believe that will also be true this year.

To make matters even more challenging, we now have a dangerous military conflict in Europe to factor into the equation. 

While we hope for continued growth, we must also recognize there are many variables outside of our control that could negatively impact results this year; inflation, supply chain issues, and labor shortages, to name just a few. 

Given this uncertainty, it would be prudent to pay attention to both your own data as well as the broader industry data, and to monitor the trends as closely as possible.

In reviewing the numbers from 2021, we saw independent jewelers’ gross sales increase 41 percent over 2020.  

Number of units sold increased a healthy 25 percent, and there was a 13 percent increase in the average retail sale. 

Diamond products performed incredibly well for independent jewelry retailers, representing nearly half (49.3 percent) of total sales in 2021, with category increases in all the key performance indicators.

Bridal, which includes loose diamonds, semi-mounts, and complete engagement rings, made up 23.8 percent of annual sales, and was up 36 percent in gross sales year-over-year. 

The category was also up 23 percent in units sold and 11 percent in average retail sale compared with 2020.

Loose diamonds comprised 58 percent of the bridal category, with an average retail sale of $6,769, up from $6,148 in 2020.

The Northeast had the highest average retail sale in loose diamonds at $7,400, followed by the Southeast at $7,282 and the West at $7,217.

Moving on to other categories, watches represented 14.9 percent of annual sales in 2021 and, like the diamond categories, was up in gross sales, units sold, and average retail sale.

The category of “services” was 12.1 percent of 2021’s total annual sales and also was up in all key performance indicators. 

While the colored stone category comprised only 7 percent of independent jewelers’ annual sales for 2021, it too experienced double-digit growth, with a whopping 50 percent increase in gross sales, a 28 percent increase in units sold, and a 17 percent increase in average retail sale.

Colored stone rings made up 42 percent of total colored stone categories, followed by earrings and pendants.

The sterling silver and alternative metal categories experienced a 29 percent increase in gross sales, a 19 percent increase in units sold, and a 9 percent increase in average retail sale.

Rolling 12 months, February 2021 through January 2022, showed a 41 percent increase in gross sales, a 25 percent increase in units sold, and a 13 percent increase in average retail sale when compared with the prior-year period (February 2020 through January 2021). 

Looking at jewelry sales so far this year, January 2022 was up 14 percent in gross sales over January 2021. There was a slight decline in number of units sold, 2.6 percent, but a 17 percent increase in average retail sale.

Valentine’s Day sales were strong, with February ultimately up 16 percent in gross sales, up 6 percent in units sold, and 9 percent up in average retail sale when compared with February 2021. 

The diamond categories also performed well in February and were up 19 percent in gross sales, up 7 percent in units sold, and up 12 percent in average retail sale. 

According to Kiplinger’s latest forecast on retail sales and consumer spending, expect retail sales to continue to do well for several months due to improvements in supply chain issues. 

But keep in mind that as the decline in COVID cases continue, we will most likely see consumers shift their spending to travel, dining out, travel, concerts, etc.

So far, 2022 is off to a stellar start, and we’re looking forward to seeing how the first quarter will play out for our independent channel.

In my next On Data column, we will look at the performance of that first quarter.