Frequent customers of jewelers are making less appearances, yet their spending tends to be more extravagant. - Decrease in frequent jewelry store visits by customers, yet increases in high-priced purchases
The jewelry and watch industry in Germany has had a satisfactory year, with a slight decrease in turnover, despite fewer customers. Association president Stephan Lindner attributes this to the industry's two exceptional years post-pandemic, with a significant increase in 2022. However, he is concerned about the decrease in customer numbers, labeling it "unsatisfactory."
Gold and diamonds continue to be popular in the jewelry sector, with rising raw material costs leading to a significant increase in average prices. The watch market has seen a slight easing in demand for top models, but high-quality mechanics remain popular. Overall, watches contributed 1.2 billion euros to the industry's turnover in 2024, with jewelry accounting for about four billion euros.
Exports in the jewelry and watch industry have shown relatively stable figures, with a slight decrease in jewelry, gold, and silverware exports to 5.1 billion euros, and a slight increase in watch exports to 1.9 billion euros. However, the BVSU in Pforzheim points out that the significant increase in gold prices has made the results look better than they would have been if calculated with 2023's gold prices. This has led to a decrease in the number of sold items, a situation that also applies at least partially to the watch industry.
The industry is facing several challenges, including consumption slowdowns in important international markets, inflation, high wage levels, and the high gold price. The slowdown in the Chinese economy, coupled with the real estate crisis and youth unemployment, has significantly impacted demand for luxury goods, including watches and jewelry. This decline has affected not only China but also markets relying on Chinese tourists.
The proliferation of counterfeit luxury watches and jewelry poses a significant challenge to the industry, negatively impacting revenue and brand reputation. The luxury goods market has been broadly affected by global economic conditions, with a decline in demand across various luxury sectors. Tariffs and trade routes have impacted production costs and availability, and luxury brands face challenges in maintaining pricing power due to high costs and increasing opportunity costs.
Market segmentation and consumer preferences also present a challenge to the industry. Brands must align more closely with consumer tastes and preferences to avoid declines in sales in key regions. These factors collectively contribute to the challenges facing the German jewelry and watch industry.
In the future, the Manufacture of paper and paperboard company, Lindner, might consider expanding into the packaging sector for the jewelry industry, as increasing raw material costs and decreasing customer numbers could negatively impact the industry's profits.
Despite the unsatisfactory decline in customer numbers, the jewelry sector in 2024 still managed to generate approximately four billion euros, illustrating the resilience of the industry, even with challenges such as inflation and high wage levels.
At the upcoming Inhorgenta trade fair in 2024, jewelry designers and manufacturers might discuss potential solutions to combat the decrease in customer numbers, with jewelry from Lindner's paper and packaging division potentially offering a unique, sustainable, and cost-effective alternative.
