Columnists

On Data: A Closer Look at Loose Diamonds

ColumnistsMar 17, 2020

On Data: A Closer Look at Loose Diamonds

Sherry Smith looks at sales and gross margins on loose diamonds in her latest deep-dive into industry data.

Sherry Smith is director of business development for data and consulting company The Edge Retail Academy. She can be reached at sherry@edgeretailacademy.com.
Hello, I hope this finds you staying well, both physically and mentally, amid all the uncertainty surrounding the spread of COVID-19. 

In this month’s column, we’re going to examine the performance of independent jewelers in the 12-month rolling period ended Jan. 30, and then dive into their performance in a category that’s become more challenging in recent years—loose diamonds. 

Overall, jewelers showed an increase of 4.8 percent in gross sales year-over-year. This follows a strong January 2019, which had an 11 percent increase in gross sales. 

Gross profit dollars were also up, climbing 4.8 percent.

The number of units sold slipped 5 percent, while gross margin held steady at 46.1 percent and the average retail sale grew 10 percent, from $304 to $335.

Meanwhile, loose diamonds showed a 2.1 percent increase in gross sales, a 2 percent increase in gross profit dollars and a 4.9 percent increase in average retail sale in the 12-month rolling period. 

Of the $2 billion in total aggregated sales data from the independent channel collected by The Edge Retail Academy, the loose diamond category represents 13 percent of total revenues and 10 percent of total annual gross profit dollars. 

This makes loose diamonds the single most important category for independents.

I’ve saved the best on loose diamonds for last—the gross margin. This is such a hot topic and, no doubt, I am opening Pandora’s box by mentioning it. 

I must admit, it is very interesting to see retailers’ and vendors’ reactions to the actual gross margin being achieved. 

Vendors tend to be surprised by how low the actual gross margin is, while retailers are surprised that retailers are getting that high of a margin. It’s all about perspective.

Let’s break down loose diamond gross margin by region: Midwest – 38.8 percent; Northeast – 32.7 percent; South – 37 percent; Southeast – 35.9 percent; and the West – 38 percent.

It’s not surprising to see the Midwest with the highest gross margin, given that the region tends to be more rural, just as it’s not a shock to see the Northeast, where it’s more densely populated and there is more competition, with the lowest.

Nonetheless, there are lots of contributing factors to the gross margin of loose diamonds: attempting to match online pricing, selling loose as a commodity, removing the emotional part of the purchase, the entry of lab-grown diamonds into the market in larger quantities, etc. 
In any case, it’s worth noting that most research continues to show it’s all about the experience. 

After all, the purchase of a loose diamonds is, in most cases, made to mark a momentous occasion in customers’ lives that should be celebrated. 
Sherry Smithis director of business development for data and consulting company The Edge Retail Academy.
tags:

The Latest

EditorsSep 27, 2021
4 Takeaways from the First HardRock Summit

Senior Editor Brecken Branstrator shares insights from the show, including what people have been buying and where it could go from here.

CollectionsSep 27, 2021
Gabriel & Co. Launches Men’s Collection

The fine jewelry design company has a dedicated men’s fine jewelry collection and a men’s wedding band array.

Lab-GrownSep 27, 2021
RJC Is Developing a Standard for Lab-Grown Diamonds, Gems

It will be for all companies that deal in lab-grown materials.

Brought to you by
Bringing Sexy Back: The Allure of COUTURE, Italian Style

Take a tour of Italian designers at COUTURE 2021.

CollectionsSep 27, 2021
BaubleBar’s New NFL Collection Brings Sparkle to Team Spirit

The licensed collection features jewelry inspired by all 32 NFL teams.

Weekly QuizSep 23, 2021
This Week's Quiz
Test your knowledge of jewelry news from the week of Sept. 20-24, 2021.
Take the Quiz
MajorsSep 24, 2021
Brilliant Earth Is Now a Public Company

CEO Beth Gerstein said she believes in the jeweler’s omnichannel approach as its retail rollout continues.

Events & AwardsSep 24, 2021
These 3 Companies Will Receive Business Grants from PGI USA

PGI created the program to accelerate the growth of the platinum jewelry market in the U.S.

Brought to you by
What is your Health Care Coverage Strategy?

Health care coverage is a big expense for small businesses - find out how to lower costs long-term instead of every 12 months.

CollectionsSep 24, 2021
Zales Introduces Elvis Presley Men’s Jewelry Line

From its curb link chains to statement diamond rings, the new collection takes inspiration from the “King of Rock ‘n’ Roll.”

×