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US Jewelry Market 2023: Sales Down 6%, Average Sale Up 3%

January 8, 2024 /

The US jewelry market sank 5.8% in 2023, resulting in a challenging year for the jewelry industry. A small 0.3% increase in holiday sales, while bucking the annual trend of sales declines throughout 2023, did not result in a last-minute turnaround.

The 2023 sales declines indicate a combination of factors. The first half of 2023 was against the final phase of exceptional COVID-driven demand. Other trends include consumer fatigue after an extended increase in interest in jewelry, a rise in travel, and concerns about the economic outlook.

Economic concerns may drive jewelry purchases to a trend of less for more. Consumers decrease the number of jewelry items purchased while increasing the average spend per item.

This trend was observed in the 2023 holiday season, when the average sales expenditure increased 1.6% compared to 2022.

In December, the sales of US specialty jewelers were practically unchanged after positive holiday season sales in November. Sales inched up just 0.1%, while the number of units sold fell 2.3%. The average consumer expenditure per item rose 2.4%, emphasizing the less for more trend.

Jewelry Sales Up 1.1% in December Despite the Drop in Bridal Sales

Finished jewelry posted a solid December with sales increasing 1.1% year over year, although unit sales decreased 2.3%. Fashion jewelry sales pulled up revenue, rising 2.6%, despite a 2% decline in units. Bridal fell 11.2% by value and 7.1% in units as average spend on bridal jewelry rose.

For 2023, finished jewelry sales declined in value and units sold. Overall jewelry sales were down 4% in units and 3.9% in value. Fashion jewelry declined 3.6% in units and 2.5% in value. Bridal dragged annual sales down, falling 8.4% in units and 10.6% in value.

Diamond jewelry held somewhat better. Revenue declined 2.8% with unit sales down 3.5% for the year. Natural diamond jewelry, representing 94% of units sold, was down 5.9% in units and 4.8% in retail value. Lab-grown diamond sales were up 40.6% in value and 56.2% in units.

As we enter 2024, there are key issues that we saw in 2023 that bear following in 2024.

Will the Middle Market Grow, Maintain Or Contract?

The $1,500-$5,000 price range represented 36% of total value in 2023. It is also incredibly stable with both unit and retail value sales down less than 1% over 2022.

In the higher $5,000-$10,000 price range, representing 14% of retail sales, sales declines were close to 3% in units and value. The $750-$1,500 price range, with 17% of revenues, sales declines represent just nearly 6%.

Jewelry, as a highly discretionary luxury purchase, can be seen as a leading indicator of overall economic performance. Consumers have a high level of comfort in the $1,500 to $5,000 price range. Any deviation from this, due to either internal industry issues such as material costs or external like inflation, is an early indication to anticipate a downward pressure in the jewelry industry.

US Jewelry Market 2023 Retail Sales Trend - $1,500-$5,000 Price Range 2022-2023 - Source Tenoris.bi

Is There A Backfill Opportunity For Natural Diamonds Engagement Rings?

LGD-set engagement ring unit sales increased 33% year over year in December. The growth comes entirely from retail price points under $5,000.

The fastest growing price range is the $500 to $750 with unit sales up 118%. However, LGD unit sales are down 26% in the $5,000 to $7,500 price range. The average lab-grown diamond set in engagement rings in this price range is 3.28 carats. It appears we are reaching the “too big” for consumers to wear point.

In spite of this, natural diamonds displayed a 30% decline in unit sales. LGD does not have a product for this key price point, representing 22.8% of all engagement rings sales. We will be watching if consumers continue abandoning this price point or if natural diamonds begin capturing sales to fill a highly active budget point for engagement ring shoppers.

This is already happening in the lower unit volume $12,500 to $15,000 retail price range where sales of engagement rings set with natural diamonds are up 14.3% in December over last year.

US Jewelry Market 2023 Natural & LGD-Set Engagement Rings Priced $12,500-$15,000 2023 - Source Tenoris.bi

Will Retailers Carrying A Broader Range of LGD Jewelry Impact the US Jewelry Market?

Prior to 2023, US consumers were primarily purchasing two LGD products, engagement rings and stud earrings.

Some 39% of Tenoris’ retailers sold LGD engagement rings and 57% of them sold LGD earrings. No other product category was sold by more than 30% of our retailer panel.

This all changed in 2023 when more retailers began to carry a considerably broader range of LGD goods. Every finished jewelry product category is now carried by over 40% of our retailers and is growing at a substantial rate.

This indication of picking up full lines of LGD jewelry opens up two possibilities. The first is rapid growth in LGD unit share in all product categories. The second is the potential impact of price erosion impacting all product categories shown in increased retailer margin and a continued shift downward in average retail price.

US Jewelry Market Percentage of Retailers Selling LGD-Set Bracelets 2020-2023 - Source Tenoris.bi

Will Yellow Gold Continue to Outperform the US Jewelry Market?

The strength in yellow gold continues with December unit sales up 12% and retailers’ revenue up 16%. This increase is present in every product category, with bracelets leading the way with an increase in unit sales of 17%. The increase is consistent in both high-end lower price point. Sales of items priced $20,000-50,000 were up 36% and those priced $250-$500 increased 11%.

Items priced $10-$18 thousand also had double digit sales increases.

US Jewelry Market 2023 Yellow Gold Fashion Rings Unit Sales trend 2022-2023 - Source Tenoris.bi

What Does The Holiday Season Mean for Natural Diamond Jewelry?

Natural diamond jewelry sales increased 2.8% in units and 6.5% in value during this holiday season compared to last year. For the first ten months of the year, sales were down 10% in revenue and units.

The question becomes, have natural diamonds become a gift product with increased consumer demand only around special events, or a broad-based shift back to natural diamonds?

Every December we tracked, LGD jewelry lost market share, regaining it in January. However, last December, the trend was very distinct. When the supplier side begins planning for the 2024 holiday season, this is a critical issue to follow, and a marketing opportunity.

US Jewelry Market 2023 trends LGD Loses Share In Decembers, But Especially in 2023 - Source Tenoris.bi

Total Diamonds Sales Continued their Decline Into December

Total loose diamond sales by jewelry retailers declined by value despite the rise in unit sales. With few exceptions, this was the trend our data shows for the entire past year.

Year over year, loose diamond unit sales increased 15.7% and revenue declined 4.4% in December. For the year, revenue declined 12% compared with 2022.

Natural Diamond Sales Down, Average Spend Up

Throughout 2023, consumer demand for natural diamonds declined deeply compared to 2022. In December, sales of natural diamonds fell 5.5% versus December 2022. By volume, sales sank even deeper, down 11% year over year.

Average consumer expenditure on a diamond they picked for setting was $10,909, increasing 6.3% year over year. This exceptional happened as diamond prices declined. What pushed the average expenditure up were two factors.

The first, a consumer desire for larger diamonds. The average natural diamond sold in December 2023 was 1.68 carats, up from 1.52 carats the year before.

The second, a willingness to pay more. About 10% of diamonds sold by specialty retailers in December were in the $20,000-50,000 price range.

This is excellent news for retailers and the diamond industry as much more value is locked into larger diamonds.

Loose Lab-Grown Diamond Are on A Separate Path

Lab-grown diamonds proved in the last year that they represent a distinctly different category. Unlike natural diamonds, consumer demand increased, even though natural diamonds and most other jewelry categories declined.

However, the increase in consumer spending on loose LGD is slowing, and the average spending per stone plummeted.

In December, the sales of loose lab grown diamonds rose 1.1% by value and 34% in units sold, as average retail prices sank 24%.

In 2023, jewelers’ revenue from loose lab-grown diamonds increased by 16%. After consumers more than doubled their spending on LGD in 2021, and then by 43% in 2022, the shrinking trend should worry the LG market.

As pointed out in the past, retailers are protecting their margins with vigor. To achieve that, with a product suffering from constant price erosion, they increase gross margins. In December, retailers had a 65.6% average gross margin, up 21% year over year.

Consumer purchasing trends are becoming increasingly consistent. About a third of loose lab grown purchases are in the $2,500 to $5,000 price range. About one-fifth of them are in the 2.00-2.24 carat range. Equally consistent is the color/clarity combination, EFG/VS1.

By shape, rounds are less than half of sales, and ovals are well over a quarter of sales as they continue gaining popularity.

The only area that displays change is size. In December, the average LG diamond size was 2.17-carats, down from November’s average, but significantly larger than the 1.87-carats it averaged in December 2022.

Retailers’ economics is continuing to evolve. It’s not just the increasing gross margins. Vendors, eager to capture shelf space and move goods, are providing more items on memo. Currently, it’s nearing 70% of supply, up from 51% in 2022.

The Retail Price of 2 Ct SI-VVS round Lab grown diamonds 2020-2023 - Source Tenoris.bi

About Tenoris

Tenoris collects retail sales data from a broad representative sample of US jewelry retailers. It covers more than 6% of the market by value. Tenoris subscribers include retailers, manufacturers, miners, and financial firms. They use this data to study everything from broad market trends to price prediction, assisting them in identifying changing trends and opportunities ahead of their competitors.

Tenoris can help improve your business through a better understanding of the US jewelry market. Contact Us to discover how our reports and tools provide comprehensive insights of the US jewelry market.

Feature photo by Paige Johnson

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