WHAT & WHERE CONSUMERS BUY

One in 10 Americans bought fine jewelry or watches in the second quarter of 1996, and jewelry stores were the most likely place they made the purchases. These are among the findings of the second edition of JCK’s new quarterly national consumer survey.

Though consumers chose jewelers about twice as often as mass merchants or department stores, the percentage who shopped in jewelry stores dropped slightly from the first quarter. More than one in three (37%) made purchases in jewelry stores in the second quarter vs. two in five (41%) in the first quarter.

Who picked up the percentage points that retail jewelers dropped? Interestingly, it wasn’t typical competitors such as department stores (which fell from 26% to 20% of all fine jewelry and watch purchases), mass merchandisers (which slipped from 18% to 15%) and TV shopping shows (which fell from 5% to 2%). Instead, it was alternative venues such as street fairs, pawn shops and “someplace else” that, while still accounting for very small percentages of the market, picked up what retail jewelers lost.

Demographically, 9% of all men and 12% of all women made fine jewelry or watch purchases in the second quarter. Consumers with incomes of $35,000 or more and at least some college education were the most likely to be the purchasers.

The survey also found that half of the men making jewelry purchases did so in jewelry stores, but only one in four women did so.

Much of the jewelry bought in the second quarter was under $200 retail. Almost half of the consumers who bought fine jewelry or watches spent $100 or less, about the same as in the first quarter. But those who spent $101-$200 increased from 10% to 16% of all purchasers.

Precious metal jewelry without gemstones was the most frequent jewelry purchase. The biggest percentage bought this type of jewelry in jewelry stores and spent $100 or less.

The survey polls 1,000 consumers nationwide about any fine jewelry and watches they’ve bought for themselves in that quarter. The results are statistically reliable on a national basis with a margin of error of +/- 3%.

UPSCALE CONSUMERS & DESIGNER GOLD

Jewelers don’t know as much as they think they do about the growing but elusive cadre of upscale consumers, according to a new study by theWorld Gold Council and Town &Country magazine.

The study — titled “The Case for Designer Gold Jeweler” — found that most jewelers assume their customers trust them, are loyal to them and like their sales staff, store environment and merchandise mix. In reality, the opposite is often true. The council encourages jewelers to follow these Five Truths:

Build trust with gold jewelry customers.
Offer brand names they can rely on.
Develop a sales staff that caters to customers.
Create a store environment that showcases gold jewelry.
Offer a variety of gold jewelry collections that are unique and exclusive.

The study defines the average upscale jewelry customer as about 50 years old, married and employed with a generous median household income of $133,000 ($59,940 of it discretionary). He or she spent an average $1,000 on the most recent jewelry purchase and $3,300 on jewelry in the past two years. The men in the study tend to buy gifts for someone else. The women tend to shop for themselves and they’re willing to pay up to $1,500 for a piece of jewelry.

Though holidays are considered the top season for jewelry purchases, 60% of these upscale consumers also buy at other times of the year.

Regarding gold jewelry in particular, more than half the women in the study say they would buy designer pieces. They are willing to pay more for quality and brand names, are secure with their wealth but not ostentatious and often buy things because they feel they deserve them. Most upscale jewelry customers see gold designer jewelry as a good value, beautiful and a lifetime investment, says the study.

PLATINUM JEWELRY MARKET GROWS

Demand for platinum jewelry is reverberating throughout the jewelry manufacturing and retailing industries and the consumer marketplace, according to a new study by the Platinum Guild International USA.

The study traces the platinum jewelry market from 1990 to 1995. A major indicator of the market’s strength: 2.2 million consumers expect to buy or receive platinum jewelry by the end of the year.

Overall, the study found more consumers interested in platinum jewelry, more manufacturers making it and more retailers stocking it. Here are some of the details.

CONSUMER AWARENESS

Consumer demand for platinum jewelry has grown four-fold since 1990. More consumers are interested in and familiar with platinum advertising and jewelry in-store than five years ago.
In addition to the 2.2 million people who expect to buy or receive platinum jewelry this year, 4.3 million others are interested in owning platinum jewelry at some time in their lives.
Bridal jewelry is the biggest platinum jewelry category. Women ages 45-54 with household incomes of $40,000-$50,000 comprise a fast-growing secondary market.
The West and the Northeast show the strongest levels of platinum jewelry awareness.
Almost one-third of adults who are familiar with platinum jewelry have seen platinum advertising, and 17% say they’ve noticed platinum jewelry in stores.

MANUFACTURERS CATCH ON

The number of jewelry manufacturers working in platinum has grown 400% since 1990.
The average platinum jewelry manufacturer added 32 new designs fromJanuary toAugust 1995.
Considering non-bridal platinum jewelry, the most new designs are for earrings, followed by bracelets, necklaces, brooches and then other categories.

RETAILERS EXCITED BY PLATINUM

Platinum jewelry sales have increased 71% for independent jewelers, 97% for department stores, 46% for regional chains and 50% for national chains since 1990.
Retail stock levels of platinum jewelry have more than doubled since 1990. More than 7,000 retailers now stock platinum jewelry.
Bridal jewelry is the top-selling platinum jewelry category for nearly every retail distribution channel. Also strong for independent jewelers are gem-intensive, contemporary and estate platinum jewelry, as well as chains and watches.
Despite the increases, the study found that retail stocks are not always high enough to meet demand. PGI hopes to bridge what it calls this “platinum gap” by creating and implementing marketing and education strategies to further strengthen the platinum market.

PGI’s 1996 advertising program features ads in national bridal and fashion magazines. The ads feature platinum jewelry by more than a dozen manufacturers and list more than 300 retailers in 20 regions. For the trade, PGI offers its Platinum Edition IV catalog and will continue its trade advertising and participation in major industry shows. PGI also conducts retail sales training sessions in about 10 key U.S. cities. Other retail support includes merchandising tools such as signs and displays.

The study involved 1,134 consumers age 21+ with household incomes of $25,000 +, 50 manufacturers (including some with offshore production facilities) and 67 retailers (including national and regional chains, catalog showrooms, smaller independent stores and department stores). Call PGI at (714) 760-8279.

AFFLUENCE: MIND VS. MONEY

Affluence is as much a state of mind as a statement of finances, according to “New Accents of Affluence,” a Conde Nast Publications study of affluence in America.

The study (discussed briefly in JCK, May 1996, p. 50) was the focus of a breakfast seminar at the Couture Collection & Conference held this summer in Pasadena, Cal.

Here are some highlights of the study:

Only 40% of today’s affluent consider themselves moderately well-off, and only 13% consider themselves to be extremely well-off, despite being in the upper income strata. Fifty-three percent of the national sample agree heartily with the statement “No matter how much money you have, you can never feel completely secure.”
For the most part, this affluent class comprises the “working wealthy.” They come from two-income households and feel vulnerable because of corporate downsizing and the burdens of paying for their children’s education, caring for ailing parents and trying to set aside money for their own retirement.
This group of adults is at the forefront of almost every consumer trend, from the latest fragrances, to the latest apparel designs to the latest cars. These are not the bejeweled “ladies who lunch.”They have a dramatically different view of life.
Members of this generation are poised to inherit more money than previous generations, but they’ll also live longer so their money has to last longer, especially if the Social Security and Medicare funds go bankrupt as predicted early next century.
The study also details the attitudes of “wealthy wanna-bes” (incomes of $35,000-$100,000) and found they have almost the same mind-set as the affluent. They can be an important investment for marketers of quality and luxury products. They buy selective luxury products already and will buy more as their wealth increases.

SENIORS & BUYING

Two new studies indicate the advertising community’s general disregard of older consumers could be an expensive mistake.

The studies, conducted by the Center for Mature Consumer Studies in Atlanta, Ga., asked questions on a variety of consumer topics. One study compared the responses of Baby Boomers and senior citizens, the other compared the shopping behavior of older consumers in two income groups: $50,000-$74,999 and $75,000+.

The center found that seniors are nearly twice as likely as boomers to read newspapers on a daily basis, (85% vs. 47%), thus are easier to reach through newspaper ads. They also have substantially higher balances in liquid assets and securities.

In addition, many older adults are looking for ways to enjoy their later years, and nearly half are looking for ways to indulge themselves.

Affluent older consumers are more willing than less affluent ones to buy by mail. This group also places a higher priority on helpful salespeople.

The survey also found that many older people need intellectual stimulation. So once you get them in your store, take the time to explain how a piece was made, any lore associated with gems in the piece and, if it’s designer jewelry, something about the designer.

HOW MUCH CONSUMERS PAID FOR JEWELRY — 2nd QUARTER

	% who bought
$1-$100	45%
$101-$200	16%
$201-$300	6%
$301-$400	4%
$401-$500	4%
$501-$1000	4%
$1001-$2000	4%
More than $2000	7%
No answer/Refused	10%

Based on JCK Survey of Consumer Jewelry Buying Habits

WHERE CONSUMERS BOUGHT FINE JEWELRY & WATCHES — 2nd QUARTER

	% who bought
Jewelry store	37%
Department store	20%
Mass merchandiser	15%
TV shopping show	2%
Antique jeweler/show	2%
Street fair	4%
Mall	2%
Pawn shop	1%
Someplace else	9%
Don’t know	1%
No answer	7%