The 2021 holiday season is gearing up to be a blockbuster for jewelry sales, according to Mastercard SpendingPulse, the credit card company’s analysis of aggregated sales activity across all payment types.
2019’s unspectacular jewelry sales were rescued by an unexpectedly strong holiday season, and the industry rebounded from the Covid crisis with an even stronger holiday season in 2020. Retailers will be delighted to learn that the trend of strong holiday sales will continue into 2021, with this year’s sales eclipsing the previous two by a wide margin.
Over half of all Americans are fully vaccinated against Covid-19, and after a grim and austere 2020, shoppers are ready to return to stores this holiday season. “Fueled in part by pent-up savings and government stimulus, consumers have the desire and the means to spend,” SpendingPulse reports. This increase in disposable income is also due to lower consumer spending on vacations—one of jewelry’s main luxury competitors—and restaurants.
As a result, retail sales in general are expected to grow, with luxury retail and luxury jewelry retail in particular poised to see greater gains over last year’s sales. This year, jewelry sales are expected to grow 60% over last year and 54% over 2019.
But this growth isn’t without challenges for luxury jewelry retailers. Faced with a diamond shortage and rising prices, retailers are buying diamonds now to keep up with strong sales. There is always risk involved in carrying extra inventory, but jewelry sales have already seen a 74% year on year increase as of August, a trend expected to carry through to the end of the year.
Furthermore, Covid outbreaks around the world will put pressure on a worldwide supply chain already stretched thin by port congestion and a shortage of workers. In the US alone, there are 10 million job openings, but many of the country’s 11 million unemployed are unable to fill these vacancies due to childcare necessities or a skills mismatch. This could spell trouble for retailers who don’t stock early or shoppers who wait too long to begin their holiday shopping.
In light of these challenges, consumers are realizing they must start shopping early to avoid shortages. The most popular holiday merchandise might no longer be in stock by the time Black Friday rolls around, so those traditional sales dates will be less important in 2021 than in years past. And with items in such short supply, retailers won’t be running the usual sales anyway. Retailers know their best stock will sell out without deep discounts and will run promotions on items unlikely to sell otherwise.
Online shopping will continue to grow, but consumers will be eager to return to stores. Jewelry in particular is poised to see an increase in in-store sales, as consumers prefer to shop for luxury goods in person. This longer holiday shopping season is an opportunity for retailers to establish a rapport with their customers and build the trust that is so vital in the luxury market.
SpendingPulse recommends retailers begin their holiday promotions in October, creating a 75-day holiday season. By enticing consumers to shop early, retailers can avoid having to assuage customers disappointed that the item they wanted is sold out or won’t be shipped in time.