Ring selection is incredibly important for jewellery retailers; however, ensuring that your business offers the right product is quite the conundrum.
Indeed, it’s difficult not to be amazed by the human capacity to take a simple concept and envelop it in countless emotional meanings.
On the surface, a ring is a basic concept: a round band, usually crafted from some precious metal, worn as jewellery.
When is anything ever that simple?
Wedding rings are worn to symbolise love and commitment, certain organisations bestow rings to symbolise membership and professional athletes are honoured with championship rings to acknowledge accomplishment.
There’s a ring to celebrate all of life’s most important milestones. The endless versatility and flexibility of rings are a blessing for consumers — there’s something to mark every occasion.
That said, this blessing can become a curse for retailers. With so many products on offer and trends that come and go, how much display area and floor space should be devoted to this category?
Then, one considers weekly/monthly category sales to stock level - it isn’t easy to know where to begin and to be confident that what’s being offered is suitable.
The cure for this headache is rings of distinction — special pieces of jewellery that are not only beautifully crafted but also capable of opening the door to human attachment and sales!
How do you define a ‘ring of distinction’? It’s pretty simple. The specifics are never important – it doesn’t need to be made of any particular precious metal or feature any particular diamond or gemstone.
Instead, it needs to be a piece that consumers can connect with emotionally.
For example, when I was 16, I gifted my girlfriend jewellery for the first time — a silver ring with a field mouse on top, his tail snaking its way along the band.
It came from a local jeweller, and I had to spend a few weeks saving money from a ‘paper round’ to buy it.
More than a decade later, the woman with the silver mouse ring is now my wife. Over the past decade, I have presented her with jewellery marking every birthday, anniversary, and Valentine’s Day; however, she still wears that little silver ring most days.
It wasn’t the most expensive ring the jeweller offered and wasn’t the flashiest. That said, it was well-made and exactly what I was looking for.
In the years that followed, every time that ring was cleaned and resized, it was always at the same jeweller — even though we no longer live nearby.
We also purchased our wedding bands from the same jeweller, proving that the benefits of offering a ring of distinction extend beyond that initial transaction.
These pieces can establish lifelong connections between consumers and businesses.
Breaking down the numbers
The 2024 State of the Industry Report documented 2,010 independent jewellery retailers in Australia.
Among these jewellers, more than 400 work hand-in-hand with Retail Edge Consultants, providing detailed sales data.
When it comes to the ring category, general manager Leon Van Megen provided sales analysis for more than 190 stores across Australia and New Zealand.
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Mila Ring
Muzo |
This data revealed important insights into the nature of jewellery sales.
The Retail Edge data showed that rings accounted for 32.8 per cent of total sales across these stores over the past 12 months, further highlighting the category's importance for retailers.
Diamond rings accounted for 16 per cent of total store sales, while colour gemstone rings offered a further 6 per cent.
Anniversary rings and wedders combined for more than 6 per cent, with silver (2.5 per cent) and gold rings (1.5 per cent) bringing up the rear.
These results reflect similar findings from data provided by the Independent Jewellers Collective (IJC), representing 69 members and 85 stores in Australia.
IJC provided sales data over the past 12 months for 40-45 stores, showing that diamond rings accounted for around 13 per cent of total store sales.
Anniversary rings and wedders accounted for a little under 4 per cent of total sales, while silver rings accounted for 3 per cent of overall sales, and gold just 1 per cent.
Unsurprisingly, given the price point, silver rings dominated in terms of units sold, with more than 10 times as many transactions as the second category (diamond rings).
That said, in terms of sales dollars, diamond rings were the clear leader—with sales from rings priced above between $5,000 and $10,000 accounting for more than half of sales dollars.
Diving deeper
Showcase Jewellers is Australia’s second-largest buying group, representing 134 members and 164 stores.
The group also provided data from precious metal rings which showed that 13 per cent of sales in engagement rings were rose gold.
Unsurprisingly, the dominant preferences were yellow gold (49 per cent) and white gold (38 per cent).
Regarding diamond selection, 78 per cent of dollar value came from solitaire rings, while 22 per cent were from multi-stone rings.
Showcase Jewellers also provided a detailed breakdown of unit sales and sales value, revealing that 44 per cent of units sold at under $5,000, with a further 34 per cent of units sold valued at between $5,000 and $10,000.
The remaining 21 per cent of units sold were above $10,000.
In terms of sales dollars, 24 per cent were generated from rings valued at under $5,000, with a further 34 per cent between $5,000 and $10,000.
The remaining 43 per cent of sales value comes from rings valued at more than $10,000.
Nationwide Jewellers is Australia’s largest buying group, representing 299 members and 337 stores.
While the group does not collect consolidated data, managing director Colin Pocklington was able to reveal insights gleaned from individual reports from members.
He explained that in terms of sales dollars, custom-made and colour gemstone rings are dominant categories among most jewellers.
In terms of units, however, silver rings consistently lead by a significant margin.
What does that tell us?
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Vibrant Wing Ring
Gübelin |
What insights can we draw from this data? Well, it’s a matter of perspective.
Consider the Pareto Principle, commonly known as the 80/20 Principle. It originated from the work of Italian economist Vilfredo Pareto and suggests that 80 per cent of outcomes stem from 20 per cent of causes.
In business, this principle is leveraged by identifying the vital 20 per cent of activities driving 80 per cent of sales and making them a priority.
Given this framework, there are two plausible applications. Firstly, and unsurprisingly, diamond rings significantly outperform other categories in terms of revenue for retailers. Thus, it's imperative for retailers to emphasise the selection of diamond jewellery.
While selling an expensive diamond ring every day might not be feasible, even a few such sales throughout the year can substantially impact the bottom line.
Furthermore, in terms of resource allocation, selling a single $10,000 diamond ring is more achievable than selling a dozen $1,000 rings.
Looking at the data from another angle, we observe that most unit sales come from silver rings – the metaphorical '80 per cent' in the context of customers visiting stores.
With this degree of consumer interest, it's crucial not to overlook this accessible price point. Silver rings may not yield overnight riches; however, they do sustain consistent business.
Said another way, each silver ring sold not only provides revenue but also fosters customer familiarity and loyalty.
Even a seemingly minor sale, such as a simple silver ring to a teenager, can lay the foundation for future transactions.
That same teenager may return years later as an adult seeking an expensive diamond ring, drawn back to where the jewellery journey began.
Considering these dynamics, a store's positioning is paramount. Retailers marketed as purveyors of luxury obviously shouldn't prioritise simple silver rings.
Customer preferences also evolve, with some valuing the sentimental touch of a local jeweller catering to teenage romance, while others seek upscale offerings.
BUYERS CATALOGUE: RINGS OF DISTINCTION
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