What does the future hold for small jewelry businesses?

What does the future hold for small jewelry businesses?

To be blunt, the future of small jewelry business seems bleak. Well, at least for now. Can it get any brighter?

Generally, the jewelry niche looks impressively lucrative. In the last couple of years alone, the annual global sales have reached an all-time high of $272 billion. No doubt, the consumers' affinity for jewelry, which was adversely affected by the global recession, has come alive.

Talking of the global recession, which hit nearly all industries hard, many small jewelry businesses were literally going out of business as consumer's disposable income was minimal.

In recent times, e-commerce has taken over almost every industry. By the beginning of 2017, the e-commerce marketplace had hit a whopping $1.85 trillion. With access to the internet increasingly getting better in emerging markets, the online marketplace will continue to grow, connecting more clients to their customers.

Despite a rather slow entry into the internet marketplace, the sale of jewelry on e-commerce stores is booming as customers can now clearly have a look at the products before deciding to purchase. The use of social media, targeted adverts, and influencers has fueled the expansion of the online sale of jewelry items even further. However, this trend only favors established brands and the few small businesses that effectively use influencers. For most small jewelry businesses, the venture is profitable but very challenging.

So, what does the future hold for small jewelry businesses?

According to McKinsey’s jewelry market report, brand jewelry is projected to account for a 30%-40% jewelry market in 2020.  It was 10% in 2003, 20% in 2011, and seems to be consistently growing. In the next couple of years, brand jewelry is projected to account for close to half the sales in the jewelry niche.

That simply means that established brands will make more sales while the growing number of small jewelry businesses will be left with a smaller market share to fight for.

The big brands here include established household jewelry brands like Tiffany, Chanel, Cartier, Signet, and Louis Vuitton. The small jewelry businesses, on the other hand, are start-ups or small-scale jewelry companies that are building their reputation and gain recognition in this lucrative niche. There are thousands of these all over the United States.  

Besides small jewelry businesses and brand jewelry businesses, there's another category that bridges the gap between the two. This category is made up of jewelry businesses that are just breaking into the "brand jewelry" category and established well-known fashion lines that are now venturing into the jewelry business. For instance, the renowned wedding gown brand, Vera Wang, now has a jewelry line, and Disney now has its jewelry line selling in many retail stores. While this group may not have as much sway on the jewelry market as the big brand jewelry names, it’s important to note that they have a huge potential.

Another trend that’s proving crucial for jewelry businesses is influencer marketing, especially on social media. Influencers are highly creative marketing experts, curating very engaging social media content for businesses. Here, it doesn't really matter if your business is small or big, if you can get the right influencers, you can leverage their massive following to make tons of sales. This is because their fans can trust them, relate with them, and heed to their calls to action. A small jewelry business with a mega-influencer can make as many sales as a medium or large jewelry business without. 

The Secret Perk of Small Jewelry Businesses

So, say you’re a jewelry designer with a non-brand jewelry business, is it worth the investment you're putting into it? Are there tips you'd make use of to make more sales? To say the least, definitely!. Non-brand jewelry businesses have their fair share of unique advantages, too. While they can't compete against the brand jewelry lines, there's something they can do to make considerably more money from their niche.

Customize jewelry products so that customers can relate to them

When your customers are convinced that by using your products, their needs are being fulfilled, converting them into customers becomes very easy and efficient. Personalization is critical for small jewelry businesses. For example, Julien Plouffe created a 6 Million dollar a year online jewelry business, Moonglow Jewelry, by selling jewelry featuring phases of the moon from the date of your choice. It may be your birthday or anniversary—he’ll have it perfectly inscribed on your piece of jewelry.

Here is another example; two young Israeli jewelry designers launched an internet-based custom jewelry design business that had great success. They design highly personalized wedding rings. To get it the right first time, they first listen to a couple’s love story then create custom wedding rings that resonate with the couple's story.

For example, say, a couple’s first kiss was at a beautiful night, by a river, under a big willow tree. That story will probably inspire designers to create wedding rings with willow leaves textures on the rings and diamond set moons right at the center of the jewelry—something that makes the rings priceless and timeless. Forever, there will be only one pair of such wedding rings in this world, and the rings will always remind the couple of a moment in their love journey that they would love to relive over and over.

The truth is, no matter how many mass-production jewelry pieces on the market, many people out there are always looking for personalized items that are made just for them. That is the niche that the smaller non-brand designers should take advantage of. Small designer jewelry businesses should avoid competing with mass production brand jewelry companies and focus on one or two custom jewelry services that they are really good at.

Jewelry servicing is also an essential source of income for the small jewelry business. Services like repairs, re-sizing are important, and big brand jewelry lines don’t do too well in this section. Did you know that the jewelry repair section alone takes a whopping 17% of the entire jewelry market? That is a large piece of the jewelry industry pie.

Parting Shot

With constantly mounting pressure from e-commerce and flooded oversea sellers bringing in low-cost jewelry products that small businesses cannot compete with, many would say that small scale retail jewelry is dying. Instead, retail is evolving into multichannel customer-centered shopping experiences like nothing before. While it’s true that the small jewelry business niche is facing many challenges, the niche still has a bright future and a huge potential. 

 

 

References:

https://www.mckinsey.com/industries/retail/our-insights/a-multifaceted-future-the-jewelry-industry-in-2020

      

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