The Case for Jewelry

"People have bought enough candles for the home. Now they're wanting things for themselves."

By Sarah Krall -- Gifts & Decorative Accessories, 12/1/2000

Fine, art, and fashion jewelry have already assumed a strong gift industry presence, playing a feature role in the usual tableaux of candles, decorative accessories, stationery, personal care items, and collectibles at gift shops and at trade shows. But an emerging trend points to this category entering a phenomenal growth period that is expected to last through 2010.

The entire jewelry industry has experienced record-breaking success over the past several years. At the top end of the market, rough-diamond sales by the South African De Beers company topped an all-time high of $5 billion in 1999. At the other end, Piercing Pagoda, a mall kiosk jewelry retailer, added 500 new stores over the past two years. During last year's holiday shopping season, Tiffany & Co. experienced a November and December sales leap of 27 percent, while Zales swelled 16 percent. Among smaller jewelry retailers, about half the members of the American Gem Society reported posting gains of more than 20 percent. "These are the largest sales increases in 10 to 15 years," noted the society's executive director, Robert Bridel.

According to Ken Gassman Jr., a retail stock analyst with Davenport & Co. in Richmond, Virginia, sales at jewelry stores in this millennium's first decade will nearly double, growing at least 7 percent annually during the next four years and reaching a cumulative growth rate of 197 percent by 2010! What's the reasoning behind this optimistic outlook? The country has enjoyed the longest peacetime expansion in history, unemployment is at a 30-year low, and household income growth has accelerated. Also, 77 million Baby Boomers (those born between 1946 and 1964) will reach their peak earning and spending years during the coming decade. They'll have milestone birthdays and anniversaries to celebrate, and their offspring's marriage rates will peak in 2003 and stay strong until after the Boomers begin to retire in 2011. The ascent of women in the ranks of corporate America and the growth of the female self-purchase market are other indicators favoring jewelry sales. "Between now and 2009, demand for jewelry will be stronger that at any other time in recorded history," Gassman predicts.

The "Me" Decade?

Some industry players feel that the nesting emphasis on the home, so strong in the '90s, has refocused itself on the person. Patty Nulph, of Folk Art International in Tacoma, Washington, says, "It was so me, me, me in the '80s. In the '90s, people were getting married, having babies, and buying homes. People have bought enough candles, they've gifted enough candles. I think we're seeing people wanting things for themselves [again]."

And fashion designers are prominently featuring jewelry in their runway shows. Angela Kenyon, owner of Miss Zula's in Missoula, Montana, notes that fashion mores have dictated that "women are going back to being feminine again, and we're seeing a huge resurgence in jewelry." Just as any skirt length is acceptable these days, many types of jewelry styles are evident, each tailored to a different look. "The jewelry that's coming back is so individual that you can wear a glass line, or a sterling [silver] line. It's completely up to you," Angela explains.

Unlimited Outlets

This growing audience for jewelry has meant a growth in jewelry outlets, with gift stores expanding inventories of baubles, bangles, and beads. And there appears to be enough demand to go around. Elizabeth Florence, spokesperson for the New York-based Jewelry Information Center, a trade association, notes that, "Because there's such a variety of jewelry consumers, traditional jewelry stores are not threatened."

Mary Strope, manager of craft marketing for the Handmade section featured in several George Little Management gift shows, concurs that a gift store customer is different from the one who visits a traditional jewelry outlet. "The type of jewelry we see in the regional shows would be considered fashion [as opposed to fine] jewelry, although some of it is quite high-end," she remarks.

Over the past few years, vendors have seen this trend develop as their buyers have changed. Karen Duclos of Frederic Duclos in Huntington Beach, California, witnessed a modification in the profiles of her customers. "In 1984, we were selling 90 percent to the apparel market. Now it's about 40 percent gift stores and galleries, 40 percent fine jewelers, and 20 percent apparel. Gift stores have undergone an incredible revolution in the last ten years, they've upgraded their merchandise to a gallery level."

Folk Art International's Patty Nulph says, "The big shift is that I'm selling to gift stores and galleries that weren't buying before."

No One-Size-Fits-All

Within gift outlets, the type of jewelry sold varies. Miss Zula's, which opened a year ago and has already moved from a 400-square-foot space to a 1,500-square-foot one, sells jewelry in the $25 to $50 range, as well as hair accessories, handbags, hats, candles, bath products, and glassware. Angela Kenyon feels that the jewelry her store sells "is very fun. It makes you look great, but it's not saying, 'look at me, what a huge investment I've made.'"

The jewelry selections at Falling Water Books and Collectibles in Ann Arbor, Michigan, however, start at $4 and go up into the thousands, with most pieces in the $600 to $800 range. Owner Jim Johnston says, "We've been increasing jewelry as a gradual evolution since we opened our doors [in 1988]. Part of it has been by request, but you can tell what customers want just from when they ask, 'Do you have any such-and-such?'"

Choosing Your Jewelry

Your jewelry selections should augment your existing merchandise and should be introduced at a rate you're comfortable with. Karen Konzuk of Konzuk Metalwear in Toronto, Ontario, has clients that include museum shops and gift stores. "Many of these are shy at first, just meeting my minimum. Then when they experience a good response, they order more."

Karen Duclos recommends that you carry enough of any one line to make a strong impression. "The stores that only buy to meet my minimum never do as well. They don't have enough pieces to make a statement. So I would recommend [that] stores choose fewer vendors but to represent them appropriately."

Coach your staffers to champion the lines you are selling. Get them to build up both the store's presence and the line's brand name. Angela Kenyon says she loves to find and promote women artists and "make things happen for them, too."

How you display your wares also makes an impression. Since they carry upscale product, Falling Water Books & Collectibles keeps the jewelry in cases in a centrally accessible location.

Angela Kenyon's selections are "all hands-on, on different kinds of tables. [In most jewelry stores] you have to ask to see anything, with us it's 'try it on!' We always have alcohol swabs to clean the back of earrings. Some pieces," she points out, "are in cases. We don't want to have to worry [about them] all day long."

There is, laughs Kenyon, one downside to carrying jewelry: "Polishing!" She then inquires rhetorically, "But then how can there be any downside to completing an outfit?"

Watch for continued coverage of this hot category in Gifts & Dec.