This coming year will see major change in how the jewellery industry does business. There will be new business models at all levels of the trade. Progressive adaptations to new ways of thinking are essential.
Diamonds
DeBeers and other diamond miners will need to seek new ways of bringing rough to market. The sight system is antiquated and broken. False manipulation of price and supply will no longer work as it has in the past. Rough prices will continue to drop and more mines will close due to lack of profitability. Prices of polished goods, both wholesale and retail, will fall in an attempt to reduce the overstock of inventory. Don’t look for prices to recover anytime soon, if ever. The market will determine the prices.
Online sales
Selling online is more important every day. This last holiday season saw explosive growth online, especially on mobile platforms. A comprehensive bricks-n-clicks strategy is essential.
Social Media
It’s no longer just about marketing and reputation building. More social media platforms are adding Buy it Now features. Many e-tailers are reporting stronger sales on Facebook and Pinterest than on their own websites or via traditional selling platforms like EBay and Amazon. Social media is mobile, fast, and highly impulsive
Direct to consumer
Manufacturers, designers, and even big name brands (including watches) will bypass middlemen and retailers by selling directly to the consumer. Look for substantial price reductions at retail as they move to a volume based model rather than being concerned with margins
Wearables
Wearable technology will be the hottest trend of the year. It will go beyond smart watches and health monitors. Jewellery will have the ability to network with and control other smart objects in the home. The internet of things is taking off in many different directions The only limit to the capabilities of smart jewellery is imagination
Jewellery metals
Silver will continue to be important but gold is making a big comeback. Gold prices are seeing some stability and consumers are comfortable at current spot prices. Platinum is a bit undervalued and we should see an increased interest in Platinum jewellery.
Design trends
Creative and whimsical designs will propel the market. Consumers want jewellery designs that have personal meaning and artistic value. Coloured stones will continue to dominate and rough or semi-polished gems will increase in popularity.
Extreme high-end
Expect to see more record-breaking auction results for important gems and jewellery. Fine coloured stones, including Fancy Coloured Diamonds, will continue their climb into the stratosphere of prices.
The downside
Unfortunately, the results of some of the fundamental changes in our industry will be disastrous for many people. Miners and cutting shops are already laying-off workers. As diamond inventory values drop, mid-level wholesalers will feel the pinch. Many will not survive. Retailers will be faced with stiff competition from their own suppliers as more manufacturers go to a direct to consumer model. As businesses close and bankruptcies will become more common, smart players with available cash will scoop up inventories for pennies on the dollar. They will sell at bargain discounts; driving prices down even farther.
The upside
Lower prices will bring more consumers back into the jewellery market. Innovative designs, including wearable technology, will rekindle excitement and desire for jewellery products. A strong online and social media presence will expand even the smallest jewellery operation into a 24/7 business with a global reach.
More now than ever; it is Evolve or Perish. Are you ready to evolve?