American gold connoisseurs are scoffed at by Asians and Italians who believe their own tastes to be the finest in the world. However, for the jewelry producers, the American woman, despite her different preference for karat age and style, makes the world’s largest consumer market for gold jewelry. John Calnon, director of merchandising planning for the World Gold Council in the US, prepared this statistical report based on two important, on-going research studies supported by the WGC. One study is conducted by Audits & Surveys which has tracked gold jewelry sales activity across the US on a monthly basis since 1988. The global consumer study will be conducted every other year on a worldwide, country-by country basis. This is the second time the study has been conducted. It measures consumer attitudes and purchase behavior towards gold jewelry. Calnon presented these findings at the VicenzaOro I trade fair in January.
In 1994, US consumers spent US$10.1 billion on plain gold jewelry. This enormous gold jewelry marketplace has shown steady and significant growth, month after month, for the past three years.
Plain, karat gold jewelry sales represent 35 percent of the dollars spent on all jewelry including gold gem set jewelry, other metals and costume jewelry in the US. For the past few years this share has been increasing at the expense of a declining costume jewelry share. In 1994, gem set gold jewelry accounted for 46 percent of the sales, sterling silver five percent and costume jewelry 13 percent.
More than 46,000 US retailers sell gold jewelry and a yet-unmeasured marketplace is quickly developing among non-store retailers including direct mail retailers and electronic retailers like QVC and Home Shopping Network.
Traditional retail jewelers account for 53 percent of the $10 billion in retail sales. But if you’ve had your business-eye focused on the discount retailers you’ll know that in three short years’ discounters have increased their share of the US dollar sales from eight percent to 11 percent. In a marketplace the size of the United States, that’s astounding growth.
Add to that the phenomenon of electronic shopping. At WGC, we estimated that electronic retailers generated nearly $1 billion, almost 10 percent, of the total 1994 gold jewelry retail sales. This is astounding growth from a retail channel that didn’t even exist five years ago.
Neck chains, earrings and bracelets together are far and away the most important product classifications in the US. Together they generate 66 percent of total sales. While neck chains enjoy the lion’s share, or 43 percent, of the sales, earrings with 12 percent and bracelets with 11 percent represent important growth opportunities. They are ideal classifications to tempt American consumers who are self-purchasing, working women.
At WGC we have documented that gold earring consumer, on average, own seven pairs. Earrings are simply irresistible to consumers when they see appealing, new gold earring styles.
The average retail price paid for a piece of gold jewelry ranges from as low as $34 for charms to $286 for non-chain necklaces. As you can see, the US marketplace is dominated by moderately priced gold jewelry. Across all retail outlets, the average retail price paid for a piece of gold jewelry in the US is $88. And this average price hasn’t changed in five years, even though there have been slight increases in each and every outlet type. This no-change is accounted for by the increased share of sales coming from the discount outlets which are selling large volumes of inexpensive gold jewelry units.
The largest share of gold jewelry is sold in the 4th quarter of the year and amounts to 43 percent of the year’s sales. The first quarter is the lowest at 13 percent. But the second and third quarters each generate healthy volumes at 23and 21 percent respectively.
American women love gold jewelry. Sixty-nine percent of them own more than five gold items and 35 percent intend to buy at least one piece of gold in the next 12 months. These rates of ownership and intentions to buy are almost equal to those of Italian consumers. Nearly 80 percent of the Italian women own five pieces or more and 39 percent intend to buy in the next 12 months. The difference is the vast size of the American population. Each percentage point represents one million adult women, meaning that 35 million American women intend to buy a piece of gold in 1995.
Forty-nine million women bought, or received at least one piece of gold jewelry within the last year. Furthermore, the heaviest activity was among young women aged 15-29 years old. Of this group 70 percent, or 23 million people, bought or received gold in the past year. This group doesn’t yet have much money to spend, so they will seek out lighter weight pieces of quality and distinction, pieces that have classic styling and are less expensive.