5 stories to watch in 2014
January 03, 2014
New York--Lab-grown and over-graded diamonds, smartwatches and the per-ounce price of gold are among the topics expected to have a big impact on the jewelry industry this year.
Also expected to stay in the headlines in 2014 are continuing developments in social media, including social selling, and m-commerce--consumers making purchases via their smartphones or tablets.
National Jeweler has predicted five stories that will remain relevant to the jewelry industry in the coming year. This list was compiled with the help of Cindy Edelstein of the Jeweler’s Resource Bureau, Beth Ann Bonanno of The EAB Project and Marc Knobloch, vice president of diamond company Aron Knobloch Inc.
Read on for major topics of 2014.
1. Lab-grown diamonds. It was the hot topic in 2012 that carried over into 2013, and it will continue to be an issue in 2014 and beyond.
Will the younger generation of consumers--those now in their teens and 20s--accept lab-grown diamonds for their engagement rings?
What about the undisclosed mixing of lab-grown diamonds with mined diamonds? The industry certainly understands that it’s an issue. Major players, including De Beers and the Gemological Institute of America, all had something to say about undisclosed mixing in 2013, and 2014 is starting off with a similar focus. On Wednesday, the Diamond Manufacturers and Importers Association of America, Jewelers of America, the Indian Diamond and Colorstone Association and the New York Diamond Dealers Club are hosting an invitation-only seminar on undisclosed mixing in New York.
2. Inconsistent grading reports. Over the course of the year, a number of jewelers expressed ongoing frustration with over-graded diamonds: stones coming back from certain laboratories that are a number of grades off in terms of color and clarity. For example, a G color, SI1 stone would get a grading report calling it an E color, VS1.
“It’s been a problem since diamonds went up in price,” one retailer said. “It’s frustrating being a businessperson and seeing this storm coming. I just know this is going to be a storm.”
The storm didn’t rain down in a big way in 2013 but there was a little rumble of thunder near the end of the year: ABC 7 in Denver aired a “buyer beware” story about the “unregulated” world of grading labs in November, right before Black Friday. Another ABC affiliate, 10 News in San Diego, picked up the story and aired its own, but very similar, version in mid-December.
More stories about over-graded diamonds are likely to surface in 2014.
3. Social and mobile sales. For everybody that thinks, hopes or wishes social media would just go away, 2014 is going to be the bearer of disappointing news: it’s not. Technology, specifically smartphones, tablet computers and wireless Internet service, have transformed the way people communicate and share information.
Social marketing--and social selling--will continue to be important for jewelers. They’ll need to devote more time and creativity to social media in the coming year.
Edelstein points to Instagram and Pinterest as two social media platforms on which retailers need to become more proficient. “I have heard tales of sales being caused by Instagram and Pinterest and I think it’s just the tip of the iceberg,” she says. “Retail jewelers will have to figure out how to incorporate Instagram into their marketing plans despite the (tiny) hurdle of it being a phone app, which seems to be an obstacle for some.”
In addition, m-commerce, or mobile sales (sales made via a smartphone or tablet computer) will continue to grow in importance. Even if they do not sell online, retailers need to make their products clearly visible on mobile devices.
4. The smartwatch. So far smartwatches, which began to emerge in earnest in 2013, have not made a huge splash. But there’s one technology player who’s biding their time on the bench before they jump into the game: Apple, maker of such market-altering gadgets as the iPod and iPad.
As columnist Jan Brassem observed in his Dec. 2 article, Apple has never been the first to enter a new market. The company allows others to go before them and then learn from their success and failures before launching what, ultimately, ends up being the most popular product in the space.
Indications are that Apple may be getting off the bench and into the smartwatch game in 2014. On Christmas Eve, the New York Post ran a story quoting the tech giant’s CEO, Tim Cook, as saying he has “big plans” for the coming year that consumers are going to love.
5. Gold. The price of gold is abiding by the law of gravity: it went up and now it’s coming down. After soaring to nearly $1,900 an ounce in recent years, the price of gold has dropped, and analysts say they expect it to continue to fall in 2014. According to Kitco.com, the per-ounce price of gold was $1,225 as of Jan. 2. One report quoting a prediction from Goldman Sachs has gold coming down as far as $1,057 an ounce in the coming year, a level not reached since 2010.
Lower gold prices could be good for retailers and designers who want to make new purchases. These pieces can be priced at levels that are accessible to more consumers, who are showing an affinity for rose gold as well as yellow gold, which is coming back into style. Yet a per-ounce price of $1,200 or even $1,050 is still significantly higher than $600 or $800 an ounce, meaning the metal may remain out of reach for a middle class continuing its post-recession struggle.
And what about designers, retailers or manufacturers who are stuck with gold purchased when the price was much higher? As Bonanno points out, “Many of my clients are artists whose work is gold intensive and they have quite an inventory. With gold under $1,200 they will have to significantly lower their prices and much of that gold was purchased at seriously higher price points.”