Now that millions of vaccines have been administered and COVID-19 infections are falling in the United States, Americans are eager to return to traveling and dining out – two consumer categories that came to a near – complete standstill during the height of the pandemic.
Yes, our many sweatsuit-filled months spent deferring vacations, hosting birthday parties over Zoom, mastering embroidery and woodworking, and shopping exclusively online have all but come to an end.
It’s tremendous news! But the flinging open of the world’s doors isn’t without its potential downsides for the jewelry industry. Now that we’re all free to roam, some retail watchers say it’s inevitable that a migration of consumer dollars – away from tangible goods and toward travel, dining, and experiences – is coming. It’s just a matter of time.
Gauging just how much the return of travel, dining, and bungee jumping off Costa Rican cliffs and the like will impact jewelry sales is the tricky part. No one knows.
It’s an issue well worth exploring. And the NPD Group did just that recently. In a memo released by the group last week, Marshal Cohen, chief retail industry advisor for NPD, said that “some experiential spending is already coming back strong, as consumers do more, dress up more, place more emphasis on appearance and health, and start to spend more on tangible products related to travel and other experiences.” But he also warned that “as this pent-up demand works itself out in the coming months, we can also expect those rising sales to throttle back a bit in apparel, footwear, and other categories.”
In essence, people are currently spending on clothes, jewelry, handbags, and other luxury goods. Discretionary retail sales revenue in the States this year grew 17% from Jan. 1 through May 8, according to the NPD. And this makes perfect sense, as we’ve all been in a surreal style coma since January 2020 and collectively crave fresh fashion.
But the enthusiasm for luxury products may not last. Once a majority of the planet is vaccinated, the urge to explore may usurp the desire for diamond studs, a Rolex, or a Louis Vuitton handbag. The kinds of items that those who could afford them were easily able to procure during the seemingly endless COVID-19 lockdowns.
“As the borders for travel reopen, whether it comes this summer or later, you can count on a wave of travel to take over,” wrote luxury retail analyst Erwan Rambourg in a recent article for Jing Daily. Pent-up demand for travel, he contends, may create “some arbitrage between spending on that trip you have been eager to take for more than a year and that handbag or watch.”
How can jewelers steady sales if and when that happens? One idea: Merchandise with your clients’ global mobility in mind. An example would be to scale back on stocking “great Zoom earrings” and bump up your supply of casual, travel-friendly bracelets (think leather and paracord) and diving watches. Jump on the camp-inspired jewelry trend, and consider carrying travel-y accessories such as leather passport wallets.
It’s hard (impossible?) to prepare for the unknown. But ensuring that your business is truly nimble able to pivot quickly in response to an ever-shifting market – would be a great place to start.
“Enjoying success requires the ability to adapt.”