Is the American jewellery-buying public ahead of the curve compared to general consumer buying? Despite the country’s ongoing economic ills, with obstinately high unemployment and a housing market still in a state of disarray, U.S. consumers have been increasing their purchases of jewellery for most of this year.

    Indeed, whereas the American market has been underperforming Asia in other areas, when it comes to jewellery it is doing a better job of keeping pace. According to U.S. government figures, jewellery store sales for September jumped 14.6 percent on the year in the first three-quarters of 2011. And, while it is still early days yet, reports from the jewellery sector following the critical Thanksgiving Day weekend, which is traditionally regarded as the start of the Christmas shopping season in the United States, have been almost universally upbeat.

    In general, the mood of the American retail market is better than it has been in a while. Led by discretionary purchases, sales in October increased by 0.7 percent from September and by 4.7 percent over last October, the National Retail Federation said. However, the strong rise could have been due to early holiday promotions. “Retailers’ seemed to strike the right chord with shoppers last month,” said National Retail Federation President and CEO Matthew Shay. “Knowing the economy is still a big factor in customers’ shopping decisions, retailers will continue to offer great deals and exceptional value throughout the holiday season.”

    And the widely watched U.S. Conference Board Consumer Confidence Index, which had declined in October, showed an improvement in November, rising to 56.0 from 40.9 in October. The Present Situation Index and the Expectations Index both rose. “Confidence has bounced back to levels last seen during the summer,” said Lynn Franco, Director of The Conference Board Consumer Research Center.

    “Consumers’ assessment of current conditions finally improved, after six months of steady declines. Consumers’ apprehension regarding the short-term outlook for business conditions, jobs and income prospects eased considerably. Consumers appear to be
entering the holiday season in better spirits, though overall readings remain historically weak,” Franco added.

    What’s behind the rising sales in the U.S. market? According to noted diamond jewellery analyst Ken Gassman, one should look past the once-declining consumer confidence index or the fact that the American political system is deadlocked.

    “I say, ignore those factors,” Gassman said. “Unemployment is still high and the housing market is still very bad, but it is amazing that these factors do not seem to matter. They simply do not correlate to consumer sales. You would think that when times are bad, sales
would also drop sharply, but that is not the case.”

    “There is a wellknown expression that when the going gets tough, people go shopping. Frankly, it is that simple. As far as jewellery
is concerned, people are shifting money from other categories in order to give themselves a treat. After going through a tough period over the last three years, people want to reward themselves with something special. Americans are born to shop, and although there has been a slowdown in the past few years, the basic consumer mentality has remained in place,” he added.

    Gassman said that data from the U.S. Commerce Department showed that sales of jewellery were up 14.6 percent in the year to September despite rising prices for precious metals, while sales measured in dollar terms were up 12 percent. However, he believes a rise in the mid-to-high single-digit range seems more likely. “Over the next couple of years, I estimate that rises in jewellery sales gains will be around 4 percent annually,” Gassman said.

    Up-market jeweller Tiffany & Co. reported a 63-percent rise in fiscal third-quarter earnings, with solid sales growth in each of its eographic regions. Tiffany reported a profit of $89.7 million for the quarter ended October 31, up from $55.1 million from a year earlier. Sales surged 21 percent to $821.8 million, or 17 percent when stripping out currency fluctuations. Total samestore sales soared 16 percent excluding currency fluctuations, compared with a 7 percent rise last year. Meanwhile, sales soared 24 percent at the company’s Fifth Avenue flagship store in Manhattan, boosted by the record number of tourists visiting New York.

    Tiffany has posted double-digit rises in profits in each quarter this year. In addition, same-store sales have been stronger than those its mid-range competitors with its consumers more willing and able to spend on gifts and other discretionary purchases. The firm reported
a 17-percent increase in sales growth in the Americas, which accounted for most of the total sales.

    Further evidence of the rising strength of U.S. jewellery sales is seen in the financial turnaround at retail giant Zale Corp which operates more than 1,800 stores in North America. Indeed, the firm’s stock jumped close to 23 percent on one day in late September after
Chief Financial Officer Matt Appel gave investors reassurance that its three-year turnaround program was working.

    Appel said that Zale was “trending in the right direction,” aided by the replacement of underperforming staff, rising revenue at stores open at least a year, and partnerships with celebrities such as Vera Wang and Jessica Simpson on exclusive product lines. The current
situation is a large improvement on the decline the company underwent following the onset of the global financial crisis exactly three years ago.

    Zale Corp’s revenue figures slumped during the recession of 2009, hit by consumers slashing nonessential spending, difficult credit conditions as banks reduced their lending, and high unemployment. It has closed hundreds of stores over the past two years and moved top management around, as well as letting some go, as part of its turnaround program.

    As for the general U.S. jewellery market, the boost in jewellery purchases could be coming from middle-level income earners making at least $100,000 who are feeling better about the economy and the super rich, according to research firm Ipsos Mendelsohn. A
study by the company based on interviews with more than 2,000 affluent people and 1,000 non-affluents over two months found that their consumer optimism was strong.

    But not all the news was good, as least from the jewellery sector’s perspective. The Ipsos Mendelsohn study also found that the consumer’s idea of what a luxury purchase was is changing and is highly subjective, with a two-hour massage, or a facial in a spa frequently fitting the bill. In other words, consumers are lowering the luxury bar, with many items far cheaper than jewellery fitting the bill. “That is a new component in the evolution of luxury,” the report said.

    Although traditional luxury brands were cited, such as Cartier, Louis Vuitton, and Patek Philippe, respondents also said luxury was less an issue of price than an experience, which could mean chocolate truffles, a fancy coffee machine, or imported cheese. Testimony of the changing nature of what constitutes a luxury product was provided by two-thirds of affluent respondents saying they define luxury differently today than they did even five years ago.

    In addition, affluent consumers do not believe that value pricing hurts a luxury brand. Among affluent people, 90 percent of affluents admitted to going out of their way to find the best price. “Fewer than half said true luxury is worth any additional cost and fewer than half also said true luxury does not go on sale, and even fewer said when a luxury product goes on it sale it lessens the perception of luxury. So consumers are bringing a very strong value orientation even to highest-ticket items.”

    “There is a strong sense that luxury is not stereotypical, but personal. Back in 2005 or 2006, there was a more shared sense of what luxury is, but today it’s much more personal and idiosyncratic. It’s about a feeling of ‘I deserve’ more than anything. And rarely were they talking about how it appears to others; it’s much more about self-gratification.”

    The Thai Gem and Jewelry Traders Association (TGJTA) wants all prospective international exhibitors and visitors to the upcoming 49th Bangkok Gems & Jewelry Fair (BGJF) to be assured that the fair is ready to open on schedule. The BGJF Organizing Committee has ushered in preparations, and are confident that all facilities will be more than ready to receive international exhibitors and visitors at the fair in February 2012.

    The BGJF49 is scheduled to be held from February 9th to 13th, 2012 in the Challenger Hall of Impact Exhibition Center, Thailand’s largest exhibition facility. Currently, pre-registration is available and the TGJTA is ready to provide any and all possible assistance to international exhibitors and visitors.

    Mr Somchai Phornchindarak, President of the TGJTA, states: “Unlike several other industries and industrial estates, the Thai gems and jewellery industry is overall very fortunate to have been unaffected by the floods. The Impact Exhibition Center, venue of the biannual BGJF, as well as the Suvarnabhumi International Airport, are fully operational. Both areas are untouched by the flooding.”

    The Thai Gem and Jewelry Traders Association has issued the following statement: “The Thai gems and jewellery industry has been most fortunate in avoiding major impacts from the current flooding that has struck several central Thai provinces. Although some parts of Bangkok have been affected, we have been very fortunate during the past several weeks.”

    The major manufacturing base of the Thai gems and jewellery industry is located in inner Bangkok and in eastern provinces such as Chanthaburi, which today remain completely unaffected by floods. Mr Somchai emphasizes that the Thai gems and jewellery industry is committed to stepping up activity as major supporters during this difficult time, ensuring that Thailand’s exports remain as high as possible.

    Mr Wisut Ittipornvanich, CEO of the BGJF, further assures foreign buyers and exhibitors that the TGJTA is making extra efforts to ensure that the BGJF49 is more ready than ever. “As flood problems pose several challenges for us, we have exerted our greatest effort in preparing for the BGJF49, and I am happy to report that fair preparations are now almost complete,” states Mr Wisut. “As the BGJF is held twice a year, the TGJTA is very experienced in preparing for each and every fair. Urgent meetings have been held with all important components of the exhibition centre, including security, logistics and airport customs.”

    According to direct mail and telephone surveys to many previous visitors to the Bangkok Gems & Jewelry Fair, 96 percent of buyers would like to buy the same or more gems and jewellery from Thailand. These buyers also stated that Thailand offers good quality, wide varieties of designs, and competitive prices of gems and jewellery.

    More than 300 buyers who used the BGJF Business Matching Service at BGJF 48 were surveyed, and 64 of those buyers and were completely satisfied with the service. These buyers purchased gems and jewellery from Thailand within the range of US$30,000 to US$2 million while on their sourcing trip to Bangkok. This Business Matching Service is now open to buyers who plan to attend theBGJF49 in February 2012.