Las Vegas conjures up the element of chance. Your bet could pay off big or equally, go completely down the drain. Industry watchers think however, that the gem and jewellery industry would do well to bet on the US market at this year’s JCK Las Vegas show.
It appears that this year, after several years wallowing in the trough, the US consumer market seems to have shaken off the trauma of the 2008 economic meltdown and its trillion-dollar economy is once again revving up to cruise power. US consumer spending in March grew at its fastest rate in four and a half years and more than compensated for a dismal first quarter that had been impacted by a harsh winter.
Economists are positive about the whole world’s economy this year, predicting that global gross domestic product (GDP) will grow at 3.5 percent this year, sharply up from last year’s 2.9 percent. The mature economies are projected as growing at 2.2 percent, with the US leading the pack with a projected solid 3 percent growth in GDP — up over a full percent from last year’s 1.9 percent.
The emerging economies, which had held up the global hopes of the gem and jewellery industry thus far, are all undergoing corrections as the first heady investment-heavy growth has tapered off, leading to a more balanced growth pattern that structurally has a slower speed. Additionally, China is wrestling with policy changes and adjustments to its economic model.
India right now is riding
a wave of optimism with a decidedly business-friendly government having just been voted to power. But there’s a big gap between optimism and actual delivery. That optimism has already surged to strengthen the rupee su
ddenly and in the process erode the country’s export industry’s price competitiveness. Most bookies would still prefer the US as a more solid bet.
The gem and jewellery industry hasn’t yet really become competitive in this area the way watches cars, fine dining, wines and even holiday packages have become. Today’s consumer wants something more experiential from the product and intrinsic worth doesn’t matter all that much any more. This lack of emotive content sharpened the impact of the global economic downturn on gems and jewellery as as product category.
The diamond engagement ring, a holdover from a previous more creative selling era, sustained the industry through the really bad times. Years ago, De Beers very cleverly combined the rarity and beauty of diamonds to generate a sense of great intrinsic worth with a terrific emotional connect by positioning diamonds as a symbol of the quality of the relationship between a man and a woman.
With De Beers no longer promoting diamonds generically and pink iPods cutting into the romantic gift market, gems and jewellery have aggressively jostle other products for the consumer’s attention today.
Still, the feel-good emotion that a recovering economy generates is the best foundation for a rebuilding of the market. The feel-good factor is oozing into the US market right now and American consumers are buying.
Ladies and gentlemen, place your bets!
GEMKonnect 