Consumers Demand More Guidance From Jewelers Amid Budgetary Pressures

As financial pressures prompt consumers to make difficult decisions about what they can afford when it comes to luxuries such as diamonds, Signet Jewelers is seeing increased demand for assistance and consultation.

The retailer, owner of Kay Jewelers, Zales and Jared, shared on a call with analysts Wednesday (March 20) discussing its fourth-quarter and fiscal 2024 earnings results that it is seeing consumers ask for expertise when making decisions about what pieces to get that fit within their budgets.

“We have some customers, the biggest percentage, who come in looking for the advice of our expert jewelry consultants to really help them make that choice,” CEO Virginia Drosos said, discussing the demand for natural versus lab-grown diamonds. “But it tends to be a more fixed-budget kind of a situation as opposed to a value orientation, which is what we do see on fashion.”

She added that while a consumer’s fashion spending decision-making “tends to fluctuate a bit more with the macroeconomic environment,” in diamonds, consumers tend to reach for the best product they can afford.

The jeweler saw total sales fall by 6.3% year over year, with same-store sales down 9.6%.

Overall, many consumers are tightening their belts. The PYMNTS Intelligence study “New Reality Check: The Paycheck-to-Paycheck Report — Why One-Third of High Earners Live Paycheck to Paycheck” drew from a survey of more than 4,200 U.S. consumers. It found that 60% of shoppers are cutting back on nonessential purchasing.

Signet, for its part, saw a focus on lower-priced items across the December holidays and Valentine’s Day.

“We believe consumers will remain focused on value this year as they make important tradeoffs in their budgets,” Drosos said.

Granted, many high-earning consumers continue to splurge on the products they want, even when it cuts into their financial safety nets, per “The Nonessential Spend Deep Dive Edition” of the New Reality Check series. The results revealed that 1 in 3 consumers living paycheck to paycheck consider nonessential spending to be among the reasons they struggle to make ends meet. Plus, the survey of more than 2,200 U.S. consumers also revealed that that share jumps to 38% for those who earn more than $100,000 per year.

Jewelry, especially a diamond, can be among the greatest splurges a consumer might make.

“What we know about engagement customers is that they really think about this purchase as a long-term purchase,” Drosos said. “It’s often the most expensive purchase that a couple has ever made together.”

Even budget-strapped consumers are finding payment plans that enable them to purchase the items they want, according to the PYMNTS Intelligence study “Tracking the Digital Payments Takeover: What BNPL Needs to Win Wider Adoption.”

The report, which drew from a survey of more than 3,100 consumers, revealed that 41% of buy now, pay later (BNPL) users leverage the method to purchase clothing and accessories — a greater share than said the same of any other retail category.

“We have encountered numerous customers whose credit history may not appear favorable when assessed through traditional credit bureaus,” Daniel’s Jewelers CEO David Sherwood told PYMNTS in an interview last year. “However, these customers have been loyal to us for long periods.”

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.