When it comes to average retail tickets, what went up before the financial crisis inevitably came back down in its wake
“It used to be that a woman could spend $10,000 on a better piece of jewelry and not think about it,” says Belinda Coffrin, owner of Coffrin Jewelers in Sarasota, Fla. But since the Great Recession began, her clients have been doing a lot more thinking and about half as much spending. “Ten thousand dollars was a comfortable price for people before the recession. Now, $5,000 is the new comfort zone,” she says.
The sweet spot—the magical sticker price that aligns so perfectly with your customers’ expectations and desires that their wallets practically pop open by themselves—has been a moving target in recent years, rising and diving with the fickle economy.
Certainly, average ticket prices are still below what they were before the recession. And there are too many variables—including a store’s locale and how high or low end its inventory is—to concretely ascertain just how much shoppers are comfortable spending on any given jewelry purchase.
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But the majority of retailers interviewed for this article, including those who say their store’s sweet spots have been on a slow ascent in the past two years, cite numbers that fall 30 percent to 50 percent below the highs seen before the Lehman Brothers collapse in September 2008.
At Robert’s Fine Jewelry in Houston, for example, $1,500 is the average sweet spot, down from $2,000–$2,500 prerecession. “People are still being cautious,” notes owner Bobby Wizig.
Retailers who always have catered to a less affluent clientele—or have stores in areas the recession has left relatively unscathed—have seen less yo-yoing in their sweet spots.
The ticket price that moves most of the fine diamond jewelry at Shelia Bayes Fine Jewelers in Lexington, Ky., is $4,500—because “Lexington wasn’t really hit with the recession,” claims owner Shelia Bayes. “It’s a town full of established families. It’s a little bit more insulated than other places.”
Colonial Jewelers in Frederick, Md., always has done well with pieces priced $500 and below—a fact the recession hasn’t altered.
“Small diamond jewelry, pendants, and smaller solitaire stud earrings are what we sell the most of,” says owner Jeffrey Hurwitz, adding that the sweet spot for bridal ring center stones has dropped since 2008 from about $5,000 to closer to $4,000. (“But we’re almost back to pre-2008 levels. The price was even lower than that for a while.”) The $500 range, which typically includes silver and smaller gold pieces, “is in that ‘impulse purchase’ area,” says Hurwitz. “It’s where you always have the least resistance.”
Price resistance—still a huge hurdle for many independents—isn’t always as simple as shoppers not having the extra dough for indulgences such as jewelry. Sometimes it’s an emotional issue. “Even my customers that have good money are more conscious of what they’re buying and how much they’re spending,” says Coffrin. “One lady who I know has money said to me recently, ‘I almost feel guilty spending so much with so many people out of work.’?”
Bayes, who’s successfully mitigated recession-born profit dips by bolstering her once-tiny bridal business, says shoppers are now more difficult to please: “I think people want to spend, but they want something that looks more unique. Not cookie-cutter.”
And of course there’s the fact that the economy is still fueling devastating unemployment numbers: 8.1 percent nationally, at press time. And though luxury fashion categories historically have proved more resilient than midtier and lower-priced fashion and accessories categories, the recession has at this point been so lengthy, its negative effects on consumer mood and spending habits have straddled the retail scaffolding.
All these factors make giving consumers exactly what they want even more crucial.
Shelia Bayes, Shelia Bayes Fine Jewelers
Bridal has been the savior of many stores in recent years, with many retailers citing a slight rise in the category’s sweet spot. “We do a huge bridal business,” says Sherry Smith, owner of Fletcher Smith Jeweler’s in Conway, Ark. “And we’re beginning to see an upward trend in what people are willing to spend.”
The new engagement-ring norm at Robert’s is $10,000, up from about $8,000 before the recession. “People will always buy engagement rings, and the prices of diamonds and gold have gone up in the past two to three years so things are more expensive,” says Wizig.
In fashion jewelry, retailers name stackables (especially bangles and rings), silver, slice looks, and colored diamonds as their strongest sellers. At Coffrin Jewelers, earrings and men’s watches still are selling briskly, as are silver items by Elle Jewelry and Breuning.
“Anything rose gold is doing amazing for us,” notes Bayes, who also has seen an uptick in the sale of intricate silver pieces from John Hardy. Wizig, meanwhile, has had luck with artisan-like rings by Alex Sepkus and statement-making Roberto Coin pieces.
Still, a number of categories haven’t rebounded since 2008, say retailers. “Traditional [looks] aren’t as popular as they were before,” says Hurwitz. “A lot of buyers of traditional jewelry were really stunned by 2008 and 2009.” And diamond tennis bracelets and classic pearls, he says, have been soft sellers for years.
Bayes agrees: “I can’t give away a diamond tennis bracelet,” she says. “A 5 carat bracelet looks tiny and people want more shine.”
And while freshwater pearl pieces are still being restocked, “they pretty much killed the classic pearl market,” says Coffrin, who creates original freshwater pieces to sell in her store. “People want pieces that look interesting.”
The trend toward innovative and custom-made jewelry—and away from classic pieces such as diamond solitaire rings—is perhaps the most marked in this new economy and has affected both the bridal and fashion markets.
Pink, chocolate, and canary diamonds are strong sellers at independents and chain stores alike. “If people are going to spend, a pink diamond is more understated than a colorless diamond,” says Bayes. It’s also a good measure less conspicuous—a plus for consumers suffering from luxury guilt.
As for where the sweet spot will go in the next year or two, predictions are mixed. “I wouldn’t think it’s going up much,” says Hurwitz. “It’s an election year and things get really quiet.”
Coffrin, conversely, thinks buyers are ready to treat themselves. “Don’t get me wrong,” she says. “People are more cautious. But they’re definitely loosening up.”