What’s the Forecast for 2023?
Industry insiders share their New Year predictions and plans for the new year.
Let’s be prudent
“[The coming year] will continue the uncertain times of 2022’s second half. Expect further economic slowdown as the Fed attempts to harness the lingering record inflation with additional interest rate increases while avoiding triggering a recession. The bright spots are US dollar strength and record-low unemployment. The latter will go away with the downturn as companies become cost-focused, triggering layoffs (the tech sector has already started). Most reliable economic indicators point to a mild recession by mid-year. Speculative inventory buys with long lead times can be problematic. As headwinds increase, cash flow is king. Be cautious and prudent. Remember, the industry put 14 years of average growth in one year in 2021. Jewelry is the most resilient [segment] of the luxury product sector, so it will survive nicely and return to normalcy in 2024.”
Harold Dupuy, vice president of strategic analysis, Stuller
The future is female
“The natural diamond industry has shown great resilience through 2022, and we believe that this strong performance will continue, especially in the US. Luxury brands and brands with strong meaning continue to outperform the market across all categories. We also hope that retail in China will strengthen with the less restrictive Covid-19 policies that are slowly being introduced.
“The bifurcation or clearer separation of natural diamonds and laboratory-grown diamonds will become even more defined as retail pricing diverges aggressively, led by entry-price-point fashion-jewelry retailers (e.g., Pandora and Swarovski) selling laboratory-grown diamonds at scale. High-end jewelers will continue their strong performance, as their consumers are less impacted by hikes in interest rates and the cost-of-living crisis. The question remains as to what happens to mid-tier retailers under pressure from above and below.
“The consumer will become less inclined to believe unsubstantiated environmental, social and governance (ESG) claims, due to the overuse of these claims by companies that can’t back them up. Brands, retailers and producers will need to decide if doing better for the world is genuinely part of their ethos, or whether it is just a marketing tool to drive profit to the bottom line. And our consumer audience will become even more focused on ‘her’; the female consumer will dominate the purchase decision and a much higher share of transactions. Our industry will recognize this and start to change all consumer touchpoints to appeal to a financially independent woman who controls her own destiny.”
David Kellie, CEO, Natural Diamond Council (NDC)
Take the long view
“We had decent growth in 2022, and I am cautiously optimistic about 2023. We may not see the kind of growth that we saw post-Covid-19, but I see a stable market in 2023 and beyond. Historically, we may have had a couple of slow years, but overall, the market and most of us in the industry have grown steadily. Our focus should be on long-term growth. The NDC and the industry have just restarted promoting natural diamonds, and we have started seeing some fruits of this marketing effort. We need to continue educating consumers about the positive economic and social impact the industry has made in the communities we work with. I see an exciting future ahead.”
Nilesh Sheth, president, Nice Diamonds
Timeless classics will prevail
“We’re remaining confident going into 2023. Timeless, classic and well-made jewelry will continue to excel. We just came back from the GemGenève show in Switzerland, where the energy was confident and optimistic. Diamonds were in demand. It was a very strong market with strong expectations for the year ahead. Pink, yellow and blue diamonds are exceptionally popular. More and more people are investing in rarer diamonds — especially with inflation. Overall, in a time when there is so much uncertainty, diamonds and jewelry still help to celebrate the important milestones.”
Melanie Goldfiner Goldberg, director of marketing and business development, Rahaminov Diamonds
Focus on value
“As part of our consumer-first strategy, we’ve been leaning into the mid- to high-tier categories in both fashion and bridal. We’ve noticed that consumers are spending money more thoughtfully and investing in jewelry in the over-$500 and over-$5,000 categories. To meet this demand, we are speaking to themes such as value proposition and cost per wear so that consumers better understand the value they’re receiving when shopping for fine jewelry. For example, if a consumer spends $5,000 on a tennis necklace as a milestone gift, and the recipient ends up wearing it on average three days a week for one year, then the cost per wear is about $32, further justifying its overall return on investment from a quantitative perspective. As the customer continues to wear the piece, the cost per wear goes down and the return increases. It is this type of approach that will help shape our messaging for 2023.”
Pamela Whiteside, senior vice president of consumer insights, Signet Jewelers
Strong demand for fancy cuts
“As we approach the new year, I am cautiously optimistic. The reality is that we are facing inflation, an impending recession, and geopolitical uncertainty. However, when it comes to purposeful spending — which essentially covers the bridal market — I am confident in a steady, if not increased, sales performance. My main concern as we enter 2023 is the supply of polished goods on the market. The demand for elongated fancy shapes — particularly ovals, antique-style cushions and emerald cuts — is very strong. I do not see demand slowing down anytime soon. Brides are looking for a way to individualize their engagement rings while maintaining a timeless feel. A fancy-shaped diamond is a great way to do so.”
Lauren Curtin, Founder and designer, Lauren Addison
The interviews for this article took place in late 2022.
Image: Close-up of a brilliant-cut, 0.45-carat polished diamond. (Shutterstock)