The JCK Las Vegas show that ended on June 1 met the low expectations of the diamond trade.
Polished diamond suppliers were reassured about the strength and stability of the U.S. market, even if sales were mediocre and buyers were pushing for deeper discounts, diamonds.net reported.
For that reason, confidence improved and the show should be deemed a success. Unlike the March Hong Kong show, which signaled continued weakness in the Far East market, diamond dealers and jewelers left Vegas in a relatively positive mood having done some business.
Then again, Vegas is very different to other international shows. For the diamond industry, it is less of a marketplace than Hong Kong, where one tends to have more booth-to-booth haggling. Rather, Vegas presents an opportunity to catch up with existing clients and meet potential new ones – whether that occurs at the booth, the numerous networking events, or at the craps table – and gather intelligence about what’s happening in the market.
Our conversations within the diamond pavilion confirmed the trends we’ve witnessed in the past few months. If you have the right goods, you can move inventory at steady prices. Demand is specific and strong for fine-cut, triple EX diamonds and there are shortages in those categories, while U.S. demand for piqué goods is stable. On the other hand, there is still a lot of inventory of poor makes in the market, despite the fact that manufacturing levels have declined in the past six months.
Suppliers are holding a lot of old inventory and are refraining from introducing fresh goods to the market until demand picks up, which many expect to occur in the fourth quarter. Manufacturers seem to be looking toward September as the next milestone gauge of market strength – both in terms of the September Hong Kong show and their preparations for the U.S. holiday season.
Buyers, too, seem to be biding their time. A number of suppliers told Rapaport News that there was a lot of interest for goods at the show, but little buying. Buyers were gathering information and walking away, seemingly with a client in mind. For that reason, perhaps the most important part of the Vegas experience is the follow-up after the show. One needs to be ever-present in the market to capitalize on the consistent demand for diamonds in the U.S.
Those trends were also evident in the finished jewelry pavilions and other shows that took place in Vegas last week. There was a positive mood at the Couture show and the U.S. high-end jewelry market is steady, although JCK Luxury was a bit subdued this year. Some noted that overall sales volume is down in the high-end, but higher ticket items are selling and lifting sales values above last year’s levels.
Above all, the high-end is looking for unique things. It was perhaps for that reason that the Antique show was very good with strong sales and traffic, and that demand for branded estate jewelry is improving. In fact, jewelers across the board were more aware than ever about presenting something different to garner interest in their products.
After all, the mindset of the American consumer is changing as millennials overtake generation X and the baby boomers as the market’s key demographic. The jewelry market, and pockets of the diamond trade, seem to recognize that they need to design, market and sell differently to millennials. However, conversations and seminars at the JCK show revealed that the industry is still very much in a learning curve to acclimate to those changing needs.
Perhaps it’s more of a transition period for the diamond industry as it works to keep that diamond dream alive, as outlined by Stephen Lussier, CEO of Forevermark at the Rapaport Breakfast on the Sunday of the show. This column will explore those and other issues that arose at the Rapaport conferences, as well as some themes relating to millennials in the coming weeks.
For now, it’s encouraging to note that as those millennials are getting married, the U.S. bridal market remains an important engine of growth for the diamond and jewelry industry.
A survey conducted by The Knot, a consumer-focused wedding information website, revealed that spending on diamond engagement jewelry has increased over the past two years.
The survey of brides and grooms with annual incomes of between $65,000 and $81,000 noted that the average spent on a diamond engagement ring rose to $6,071 in 2015 from $5,258 spent in the group’s 2013 survey. Brides spent slightly less on jewelry accessories for their wedding, at an average of $408, but more on jewelry gifting to their bridesmaids, at an average spend of $105.
While millennials are being enticed toward electronics and other luxury experiences in lieu of fashion jewelry, the bridal market remains a mainstay for the industry. Much of the brainstorming that took place in Vegas centered on how to enhance the retail selling experience accordingly.
The mining sector also appears to finally be raising its marketing game. The establishment of the Diamond Producers Association – announced just prior to the show – garnered much interest in Vegas, even if its initial $6 million annual budget spread between research, marketing and administration is hardly enough to make a widespread impact on consumer demand. On the other hand, De Beers announcement to re-introduce the “A Diamond is Forever” slogan in its advertising had retailers applauding, and wondering why it lay dormant for so long.
Perhaps for that reason there was a positive mood about Las Vegas this year. The industry seems to recognize that it can no longer take its position for granted and is slowly becoming more proactive to raise consumer interest.
There is still much work to be done, but diamantaires and jewelers left Las Vegas satisfied that there is a steady and consistent base to work with in the U.S. That was enough to raise the mood and provide a much needed confidence boost to the diamond trade, even if actual trading was slightly disappointing at the show.
