Tumble in Jewelry Revenues May Lead to Higher Marketing

Along with many other retail categories, jewelers have suffered from decreasing sales. The industry experienced a broad decline of 3.5% in 2008. However, some sectors fared better than others. For example, 911149_wedding_rings_3designer/​custom retailers reported a 0.8% drop in sales and high end retailers came in at the end of 2008 about 1.3% lower than in 2007. The Jewelers of America 2009 Cost of Doing Business Report indicated that mid-​range jewelers and chains suffered the steepest drops.

As they prepare to gear up their marketing programs for the 2009 holiday season, jewelers know the following distribution of sales is fairly consistent across the industry and may allocate their marketing efforts accordingly:

  • Diamonds 49%
  • Colored stone jewelry 9%
  • Karat gold 8%
  • Repairs 10%
  • Timepieces 6%
  • Other 18%

In the past year, high-​profit jewelers spent 3.6% of revenues on advertising and promotion. Low-​profit jewelers spent 5.5% on the same activity. David Peters, Director of Member Services, notes “[j]ewelers who controlled their costs were able to hold the line in 2008, successfully managing their businesses, despite the more challenging environment.” It’s a fair bet, given recent history, that many jewelers will increase ad campaigns to improve market share and reach consumers in the all-​important upcoming holiday season.

[Source: Jewelers of America Release, August 2009] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.