VALENTINE'S DAY SAVED BY BIG SPENDERS

Valentine’s Day jewelry demand increased slightly over the previous year. Natural diamonds did not benefit from the marginally improved sentiment, putting pressure on the diamond business to figure out how to re-engage customers. US specialty jewelers’ overall jewelry sales increased 1.3%, but their unit sales fell 7%. Additionally, if you make it to the end of this analysis, we have some exciting news.

The shift in consumer trends was obvious. The boost in interest in higher-priced items increased average spending per item by 6.3%. Simultaneously, spending on lower-cost items fell by double digits.

February kept the positive trend going that began in October, showing that the market has bounced back from the downturn of recent years. We believe this careful change in direction will persist, resulting in a modest increase in demand in 2025.

Finished Jewelry Sales Inch Up

The total value of finished jewelry sales increased by 2.5% year on year, despite a 7.2% decrease in unit sales. The reduction in jewelry units is almost completely in the under $250 price category, implying that consumers on a tight budget did not shop for jewelry ahead of Valentine’s Day.

Sales of jewelry under $250 fell 14% year on year, while those between $250 and $500 fell 7%.

In contrast, finished jewelry items priced at $1,500 or more were in strong demand.  This was especially noticeable in high-end jewelry priced between $10,000 and $15,000, which jumped by more than 23% from February 2024.

These two developments caused the average expense per unit to rise by more than 10%.

Modest Rise for Finished Diamond Jewelry on Valentine’s Day

Year over year, unit sales of finished jewelry sets with natural diamonds decreased by 6%. However, in line with the established trend, the average price per item rose by 7%. This boost in spending helped preserve merchants’ revenue just about even, up a modest 0.5%.

Valentine’s Day purchases were predominantly made two weeks before the occasion, with many people buying jewelry at the last minute on February 14.

The largest average expenditure was during the week of February 3-8, at more than $2,354 per item. Between February 10 and 14, the average dropped to $1,690. Those who were late and bought a finished natural diamond jewelry piece on February 15 must have felt compelled to atone. They paid $2,600 per item.

The greatest weakness in finished natural diamond jewelry is at the lower end. Items priced below $1,000 fell by a strong double digit, while those priced between $1,000 and $2,500 fell by a single digit.

The best-performing price range was $10,000 to $15,000, up nearly 25% year over year.

Consumer Demand Drives Finished LGD Jewelry Unit Sales

Some of the poor performance of natural diamonds can be attributed to finished jewelry set with lab-grown diamonds.

Finished LGD jewelry goods priced below $750 performed particularly well, growing by more than 50% year on year. Between $750 and $5,000, sales increased 30-55%.

Overall, finished jewelry set with lab-grown diamonds increased by more than 38% in terms of unit sales, while revenue increased by 28%, as the average price fell an additional 8% in February.

LGD set finished jewelry accounts for 11% of total value, compared to 89% for naturals. Engagement rings, stud earrings, and tennis bracelets continue to be the most popular jewelry categories.

Loose Diamond Sales Declined

Revenue from loose diamond sales, both natural and lab-grown, fell in February. Retailers primarily use loose diamonds to customize engagement rings, and the decline in is indicating that US consumers are losing interest in traditional diamond engagement rings.

Loose Natural Diamond Sales Down Despite Valentine’s Day

The reduction in demand for natural diamonds set in engagement rings is the primary reason for the 7.5% dip in unit sales in February.

That is disheartening, given the tremendous improvement in demand in January. Even the ongoing increase in average spending on natural diamonds was insufficient to drive revenue growth. Retailers’ revenue from loose natural diamonds fell 3.5% in February, crushing hopes that love-related purchases would keep them afloat.

The long-term trend of pursuing bigger diamonds appeared to have paused. In February, the average diamond sold weighed 1.40 carats, which was virtually unchanged month over month or year over year.

Loose Lab-Grown Diamond Trends Steady for Valentine’s Day

Many of the loose LGD trends seen in the previous year continued in February. Unit sales increased 17% year over year, while revenue fell 6% from February 2024.

This consistent trend reveals something about customer demand for lab-grown diamonds. First, for those who still doubt it, LGD is here to stay. Second, the US consumer market is mostly about price, not value, so consumers’ goal is to reduce spending rather than to retain value. Finally, Americans prefer their diamonds to be as large as possible, and that is easily achieved with LGs, and they are becoming increasingly large, weighing an average of 2.12 carats.

Another persistent pattern is the drop in average prices, which fell another 20% in February.

One thing to consider is inventory buildup. Maybe because the goods are on memo, or possibly because retailers are not noticing that these otherwise fast-moving items are not moving as fast as they did.

In 2022, LGD loose sat an average of six months in inventory before selling. Currently, it is up 50% to nine months. Pay attention to this before it leads to a backlash.

Tenoris Retailer Panel, Dataset, Keeps Expanding

We are happy to announce that we are expanding. We presently have nearly 2,500 jewelry doors sharing all of their jewelry activity with us. This represents a significant increase from the handful hundred we began with a few years ago.

These retailers collectively share $4.7 billion in annual sales and over 156 million data points. What makes this genuinely noteworthy is that it represents 5.8% of US jewelry sales and 10.5% of sales by specialty jewelers.

As one of our clients recently stated, “Tenoris is the industry benchmark for US jewelry & diamond retail data.” Thank you for this.

The above high-level figures of the US jewelry market are just the tip of US jewelry market activity we cover. Tenoris has more detailed data that can help improve your business through a better understanding of the US jewelry market. Contact us for a demo.

About Tenoris

Tenoris collects retail sales data from a broad representative sample of US jewelry retailers. 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.