America Driving Industry Confidence

RAPAPORT... The diamond industry owes much of its current uptrend to US consumer demand for jewelry. The major retail jewelers are seeing record sales, and the independents are celebrating "Christmas every day," as one store owner put it at the recent JCK Las Vegas fair. The rebound was also evident in the amount of business taking place during Las Vegas jewelry week in late August, which included JCK, Couture and the Antique Jewelry & Watch show. Attendance was down, with many of the majors staying home due to concerns about the Delta variant of Covid-19, but orders were more or less in line with "a normal year," exhibitors said. Retailers need goods ahead of the holiday season. The swift recovery is surprising, considering where the industry (and the world) was 18 months ago, when the coronavirus first began to spread. Historically, jewelry and other luxury products are late bloomers after a recession. Not so this year, with jewelry outperforming many other product categories. Then again, this crisis has not been like others. While the economic challenges cannot be discounted, it has been primarily a health crisis. Lower-income households have borne the brunt of the financial hardships, but overall wealth has increased. That means the income gap has widened. Meanwhile, retail has learned to adjust along with the rest of the economy, and the diamond and jewelry industry was able to capitalize on that increased wealth, pent-up demand, and lack of discretionary spending in other areas such as travel.We expand on these ideas in the September edition of the Rapaport Research Report, which examines the reasons behind the surge in jewelry sales. The issue also outlines some of the challenges and concerns that may derail the recovery, or at least slow its progress. After all, people will begin to spend on travel again, there are real inflationary worries, and Covid-19 is still impacting society through its various mutations. That's not to say the momentum will slow just yet. The industry is heading into the holiday season with refreshing confidence and optimism. And it appears to be taking proactive steps to sustain demand, regardless of renewed competition for discretionary dollars or a potential economic pullback. There are some exciting marketing campaigns, both by brands such as Tiffany & Co. and by the industry's Natural Diamond Council (NDC), to keep diamonds at the forefront of consumers' consciousness. When did the trade last enlist such high profile ambassadors as Beyonc?(C) Knowles-Carter and Ana de Armas? All these factors are fueling the kind of buzz that hasn't surrounded the industry for some time. And it's because more people are buying diamonds than ever, particularly in the largest market, the US. That's something we tend to discount amid all the trade talk, analysis and focus on supply. Perhaps the industry has been conditioned to concentrate its energies on such matters. But let's enjoy this moment, and let the good times roll.The Rapaport Research Report presents proprietary data on polished diamond prices, along with market intelligence and analysis. Subscribe to the report here.Image: Avi Krawitz and the cover of the September Rapaport Research Report. (Ben Kelmer, Shutterstock)