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Decline in weddings a bad sign for bridal jewelry sales

01 august 2016

It's clear that demographics hit sales of every product imaginable; marketing people don't move without knowing what consumers are doing and thinking. But the diamond and jewelry industry face a particular problem which may be beyond the ability of even the most skilled marketers to fix.

Around the world – and particularly in the important U.S. market and across Europe – marriage rates are falling. Young people are less committed to the institution of marriage and if they do get married they often forego the need for a wedding ring or buy a much lower-priced one than couples did in the past.

The problem is even more serious when one takes into account the fact that the bridal market in the United States and Europe is the bedrock of retail jewelry sales. Holiday season sales are vital and events such as Valentine's Day also bring in much needed revenue, but bridal jewelry is the base.

A look at some statistics illustrates the point well: the marriage rate in the United States fell to an all-time low point in 2013, indeed the figures are nothing less than astonishing. There were 31 marriages per 1,000 women in that year, according to the National Center for Family and Marriage Research, whereas in 1920, less than a century ago, it stood at 92.1 per 1,000 women. Meanwhile, Census data in a 2014 study by the Pew Research Center, a major U.S. demographics research institute, show that the number of married households fell to 50.5 percent in 2012 from a high of about 72 percent in 1960. There could be some hope in the fact that the desire to marry remains strong. In a 2013 Gallup Poll, only 5 percent of Americans reported that they did not want to marry.

analyt_27062016_1.jpgPeople are increasingly deciding to live together rather than get married. U.S. Census data show that the number of cohabiting couples rocketed to 7.5 million in 2011 from 450,000 in 1960. The average age of a woman getting married for the first time in the United States is now 27, the highest ever figure. Experts are predicting that this age will continue to rise as couples wait to get married. That, however, is not necessarily a bad thing – older people generally have more money to spend, meaning that it if a marriage does take place they are likely to feel more financially secure about buying a larger diamond ring.

This is a big number of people that has done away with the purchase of the traditional diamond engagement ring and other wedding-related jewelry and a huge loss for jewelers. While 75 percent of American brides once received a traditional diamond solitaire engagement ring, now far fewer brides-to-be are receiving such rings. They are more likely to receive a family jewelry item, a piece of estate jewelry which is often re-cut, or a fashion ring. All of that means fewer people are going to jewelry stores to buy new items.

In addition, the rate of second or subsequent marriages has also dropped sharply in recent years. Twenty years ago, almost 10 percent of all women were in their second or subsequent marriage. Now, only about 5 percent have married more than once. This is also a loss for the diamond jewelry market because the size and value of the diamond engagement ring typically increases for each subsequent marriage.

Another interesting aspect is that although in former times it was the man who proposed marriage, it has now become a joint decision. Although people often imagine the man getting down on bended knee, industry observers say that is increasingly an outdated image.

There are several reasons, including a greater cultural acceptance of cohabitation and having a child while not being married. Meanwhile, the recession of 2009 and 2010 following the huge financial crisis of 2008 is still having an effect: it is continuing to lead couples to delay their weddings. Add to the mix the fact that women have become an increasingly significant part of the workforce in the Western world in the past half a century; in other words they no longer feel that they need a husband to financially support them and value their independence greatly. Single women are acquiring homes on their own and see that as a liberating experience, consequently marriage is no longer seen as something you have to do.

The importance of the bridal market to the jewelry market can be seen in the statistics. Although these figures relate to the U.S. market, the percentage terms can be assumed to be similar for other markets such as Europe. Diamond engagement rings account for approximately $5 billion to $6 billion of total U.S. jewelry sales which is almost one-fifth of total U.S. diamond jewelry sales of about $27 billion. Meanwhile, the bridal business, including diamond engagement rings, brides’ and grooms’ jewelry gifts, wedding bands, and other jewelry related to the bridal market are estimated to have a value of $15 billion-$18 billion of total jewelry sales, making up anywhere from 20 to 25 percent of the total.

analyt_27062016_2.jpgEven when young couples are getting married, traditional marriages out with a more personalized experience in demand. Couples often want to show what's unique about them. And that is making life difficult for retailers who want to advertise their goods to couples, but are not in line with what the consumers are thinking. It may simply be safest to assume that conventional thinking is out and that the traditional diamond engagement ring is not an automatic choice. Diamonds are most often in the news when a celebrity gets engaged, but many younger couples don't exactly see reality TV stars as role models.

Falling bridal jewelry sales is not a problem only affecting the United States. In Britain, such sales, traditionally a solid source of income for jewelers, could come under a long-term threat after new figures showed a sharp drop in the number of people getting married. The Office for National Statistics (ONS) reported the number of people getting married for the first time has fallen to a record low, with just 2.5 percent of single women in England and Wales marrying in 2013. In addition, the number of weddings also dropped for the first time since 2009.

There was a drop of 8.6% in 2013 from 2012, and a 40% decline in 40 years, according to the figures. The ONS said that marriage numbers have been declining since 1972, however it suggested that the sharp drop in 2013 could have been related to fears and superstitions about the number 13
And the institution of marriage has become an increasingly hard sell even in the traditionally Catholic countries of Europe – Italy, Spain, Portugal and Poland. Last year, 145,571 first-time marriages between Italians were registered in Italy, the lowest on record and down 20% from 2008. Antonella Guarneri, a researcher with Italy’s National Institute of Statistics (Istat), said the decline could mostly be attributed to changing demographics and Italy’s ageing population: there are simply fewer young people of the age at which couples usually get married.

But there are other factors too, including a rise in the number of couples opting to have children without getting married (one in four babies were born to unwed parents last year, compared with fewer than one in 10 in 1995) - the weakening influence of the Catholic church, and the economic crisis that has battered Italy since 2008 and is only just beginning to improve.

When young Italians talk about the financial crisis affecting their desire to get married, it is often not just because they want to enter marriage on a strong financial footing, but because the wedding itself is so expensive, Guarneri said.

By our Israel correspondent Abraham Dayan