Australian jewellery industry – a complete picture

I am a stickler for accurate and precise information. I guess it comes with the job. Journalists have an obligation to report accurately, which is why there is often a need for doubt – we should always question what is presented to us as fact.

Apart from being a member of Australian Skeptics, one of my credos is ‘Everything is wrong until proven correct.’ All too often I am told something that just doesn’t sound right, and on further investigation it usually isn’t right.

Then, sometimes I’m told something that does sound right but nevertheless also proves to be wrong, which leads to my second credo: ‘50 per cent of what you are told is wrong and the other 50 per cent is not right.’

I have written in the past that the Australian jewellery industry suffers from a lack of accurate information. We have very few facts about total industry sales at wholesale or retail, let alone individual category sales.

In fact, for a long time, the industry flew blind on data about the basics; the number of jewellery stores in the country. There were guesses ranging from 2,000 to 4,000 but no one knew exactly and, in fact, there wasn’t even an agreement on what constituted a jewellery store.

For example, can a ‘store’ be an ‘upstairs’ jeweller or a business that repairs jewellery? Are they even retailers?

Indeed, when I first started looking into the issue many years ago, there was debate as to whether fashion jewellery retailers should be included in industry analysis because that category was frowned upon, even though there was, or is, no consensus on the definition of fashion jewellery!

Ask three people to define ‘fashion’ jewellery and you will get five different answers!

So, if there is no agreement on how to define things, nothing can ever be measured, and if no one is measuring, how can the industry have accurate information? For example, what’s the turnover of the Australian jewellery industry?

Jewellery chain stores dominate

Around 2003 there was a contentious debate about the increasing domination of jewellery chain stores such as Prouds, Michael Hill, Goldmark, Angus & Coote, Zamels and so on. Doomsayers cried that independent jewellers were being put out of business as major chains expanded all over the country, especially into regional and rural areas.

After hearing these ‘facts’, my #1 credo kicked in – everything is wrong until proven correct – so we set out to research the number of chain stores and independent jewellers located in shopping centres.

Interestingly, that data painted a picture very different to the notion that chain stores dominated the industry (credo #3: ‘Conventional wisdom is usually wrong’). We continued our research and in 2007 we published data that showed independent jewellery stores accounted for 62 per cent of all retail locations.

We had to create definitions for an evolving market along the way. For example, in 2003 there were no flagship stores and relatively few brand-only stores such as Pandora ‘concept’ stores. It was also important to define issues such as, how many stores constitute a ‘chain’ and what a jewellery kiosk was. Therefore, we developed the definitions (see below) in order to create consistency across research.

Backgound reading: What is fine jewellery? 

With further definitional refinement and research we published our 2010 State of the Industry report, which measured independent jewellers, chains stores (divided into fine and fashion jewellery), brand-only retailers, kiosks and flagship stores.

The report contained a wealth of information and concluded that fine jewellery chains represented only 23 per cent of the market while independent jewellery stores accounted for 64 per cent. So much for the chain stores dominating the market and putting local jewellers out of business! 

The 2010 State of the Industry report showed that independent jewellers accounted for 64 per cent of all retail outlets, while only 23 per cent were fine jewellery chain stores and a further 9 per cent were fashion jewellery chains.

We are now finalising another data collection project intended to test other commonly-accepted industry ‘facts’. This latest research indicates that many small, independent jewellery stores have closed over the past few years, a fact that would not surprise anyone; however, what will be most interesting to the trade is the extent of our research.

Jeweller already manages the most comprehensive and complete database of industry information, bar none, and we can now identify which stores sell watches and which do not, which stores have manufacturing jewellers in-store or use the services of a local ‘benchie’.

We now know the number of ‘upstairs’ jewellers as well as how many jewellers are in shopping centres as opposed to on the traditional high street. The database even stretches to identifying jewellery and watch repairers, design studios and we’ve even researched those businesses that buy loose diamonds, gemstones, opals and tools and equipment.

All this information paints a very interesting picture of the whole of the industry and now puts us in good stead to address the most substantive issue of all, and one that’s still missing – an accurate guide to industry turnover. It’s the last piece of the puzzle, so to speak.

While there are many figures bandied around about the annual revenue of the jewellery industry, they are unreliable at best, and misleading at worst. The latest Australian Bureau Statistics’ data has total retail spending for the year to May 2015, excluding petrol, at $284.5 billion.

Wouldn’t it be great if we could accurately measure the value of jewellery and watch sales that contributed to that $284.5 billion figure?

Better still, wouldn't you like to know whether consumer spending on jewellery and watches is increasing or decreasing year-on-year?  Alas, you will have to stay tuned for that one.

More reading
What is and isn't fine jewellery?
What is fine jewellery?