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The Year Ahead

2020 promises to be a year of tumult with the most impactful changes likely to come from the political and economic arenas. The very name of the year also invites looking ahead. So, what do jewelers see? In this section, we dive into political and economic forecasting.

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POLITICS

It’s been called the era of outrage. And sure enough, jewelers are finding themselves getting irked more often. Whether it starts with the political issues, or with the political parties themselves, or is just being inflamed by the social media, we won’t conjecture. What’s clear is that many jewelers are angry. Here we look at who in particular is angry and the business and personal issues most on the minds of jewelers.

40. How much do you think the outcome of next year’s elections will affect your personal economic situation?

Greatly
41%
Somewhat
37%
Not Much
18%
Not At All
4%

41. Have the policies of the Trump administration …

Improved life for you and your business
46%
Made life harder for you and your business
23%
Had no real effect on life for you and your business
31%

42-43. Which of these political or social issues do you see impacting your business (red) or you personally (blue) in the most in the next couple of years?

44. Do you find yourself getting ticked off more often about society and life in general than you used to?

 

COMMENT: Anger is bad. It feeds hatred, it’s unhealthy and it makes you unhappy. Given how well most jewelers are doing, we were thus a little shocked so many people are so mad. Women jewelers were slightly more angry than the men, by a small margin (78% to 76%). The affluent seemed to have less reason to be irate: 67% of those earning more than $150,000 a year compared to 70% for those earning less than $75,000 said they were more ticked off or a little more ticked off than previously.

 

RECESSION

Based on their thousands of years of cumulative business experience, we thought our readers would likely know something about the prospects for the economy next year and what to look out for. Here are their thoughts distilled, along with a glimpse at their readiness.

45. From your experience as a business owner, what are the indicators that suggest tough times may lie ahead in your local market?

  • More people looking to sell gold or old jewelry
  • Smaller average tickets/fewer big sales/falling sales
  • Smaller engagement ring sizes
  • Signs of local economic contraction (less building, job losses, less hiring, store closings, poor farm prices, etc.)
  • Slowing foot traffic
  • More requests for financing
  • More people asking for remounts
  • A pending election
  • Increased competition from smaller discretionary items like guns
  • Rising gold prices
  • Oil dropping below $40
  • More people asking about alternatives such as lab-grown diamonds or Moissonite
  • More homelessness/crime
  • Shoppers’ general demeanor/Less fine jewelry being worn
  • Increased demand for repairs/Repair quotes being declined
  • More volatile sales figures
  • Negative street talk/stock market talk
  • More returns
  • More people paying with cash
  • Simpler styles (less melee)
NOTE: A lot of respondents said that things were going well at their store and they saw no indicators that a major downturn was on the way. This list is thus a combination of signs jewelers have learned to look out for, or which they may be seeing now (from the most frequently cited to the least).
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Warning signs, in jewelers’ words:
  • “Historically, our custom market has increased during a recession. Grandma’s diamond suddenly looks wonderful if it’s free, and we can set it into something fresh and current.”
  • “Folks living in big houses with little to no furniture.”
  • “Less need for a diamond purchase to go over 1.5 carat.”
  • “When the number of sales goes up, and the dollar amount of each sale goes down.”
  • “People are unsure of the future and the next election, so they hold onto their money tighter.”
  • “Sales are gradually, but consistently slowing. Stones and jewelry are not necessities for people. When money becomes tighter, or people get scared about finances, they don’t purchase stones and jewelry.”
  • “More questions about moissanite.”
  • “The big spenders are buying smaller.”
  • “Here in our resort town, the ladies are only carrying ice-cream or coffee instead of the shopping bags they would normally have.”
  • “People selling vacation homes.”
  • “I see fewer people in local restaurants on Friday nights. “
  • “Rolex sales dropping.”
  • “Greater request for financing and the inability to get the customer approved.”
  • “The general ‘atmosphere’ in regards to customers reeks of underlying tension. No one is really speaking about it, but everyone is worried about the economy and the unrest among citizens.”
  • “Paying with cash indicates customers are concerned about debt and are less likely to spend significant amounts of money on jewelry. “
  • “Our local economy has a history of rises and falls. It has been 10 years since we have had a downturn, which is about the average cycle. I am expecting somewhat of a downturn based upon historical experience of 47 years doing business in my area.”
  • “We are in a more cushioned area so no outward indicators so far, but my husband’s industry runs natural gas across the USA and there is little expansion. That is an economic indicator that makes me wary.”

46. According to a recent Bloomberg survey of professional economists, there’s a 32% chance of the economy contracting next year. Based on your experience and your current sales what chance do you see the country falling into a recession?

47. STRESS TEST: How would you assess the strength of your business right now?

Very Strong
13%
Strong
51%
Fair
30%
Weak
5%
Very Weak
2%

48. What will be your greatest priority next year?

Growth
20%
Boosting profitability
31%
Bringing in new technology
5%
Clearing old inventory
21%
Cutting expenses
5%
Surviving
2%
Preparing to exit the business (succession, retirement, etc)
9%
Other
8%

49. How do you now think of the 2008 recession?

It still haunts every business decision I make
19%
We learned a few lessons but it was basically just another business cycle (if a little more extreme)
60%
I don’t give it any thought
17%
I’m young. It’s basically ancient history to me
40%

Over the years, INSTORE has won 80 international journalism awards for its publication and website. Contact INSTORE's editors at [email protected].

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