Jewelry Stores Industry Profile

The US jewelry retail industry includes about 20,000 companies with combined annual revenue of about $30 billion. Major companies include Zale, Tiffany, and Sterling Jewelers (a unit of London-based Signet Jewelers). The industry is fragmented: the top 50 jewelry chains generate about 40 percent of revenue.

COMPETITIVE LANDSCAPE

Jewelry sales depend partly on consumer income. Small jewelers can effectively compete with large chains because price isn't the main factor determining sales. Profitability depends on merchandising and effective marketing.

Jewelry is sold not only by specialized jewelry retailers, but also by department stores and mass merchants. Because regular gross margins are very high, often 50 percent, mass merchants have been able to cut prices and take market share. Wal-Mart is the largest jewelry retailer in the US.

PRODUCTS, OPERATIONS & TECHNOLOGY

Jewelry is often classified as bridal merchandise (engagement, bridal, and anniversary rings); fashion jewelry (rings, bracelets, earrings, pins, gold chains); and watches, silver flatware, and other giftware. Diamond jewelry and loose diamonds account for the largest share of total jewelry store sales (45 percent); watches for 13 percent, gold jewelry for 10 percent; and colored gemstone jewelry (rubies, sapphires, emeralds, etc.) 8 percent.

Jewelry is expensive, intimidating, difficult for consumers to evaluate, and usually not branded. Purchases therefore require a good deal of service and expertise. Consumers are most likely to buy jewelry from a merchant they feel is trustworthy: either a well-known local jeweler or a retailer such as ...