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Diamond-jewelry sales up 6.1 percent in 2006

March 22, 2007

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New York—Spurred by the successful launch of Journey Diamond Jewelry, consumer love for diamonds continued to grow in 2006, despite challenges.

The Diamond Information Center at JWT reported diamond-jewelry retail sales in the United States increased for the fifth consecutive year in 2006, growing by 6.1 percent.

Total U.S. sales in the diamond-jewelry category, which represents half of diamond-jewelry sales worldwide, reached $35.2 billion for the year, up $2 billion from sales of $33.2 billion in 2005. Although transactions were actually down 2.7 percent compared to 2005, sales were buoyed by an increase of 9.1 percent in average ticket price per sale.

"2006 was a challenging year in which the diamond industry made great strides. Manufacturers created innovative products that increased consumer demand, and retailers presented more appealing messages than ever," JWT Diamond Marketing and Advertising Group Director-in-Charge Richard Lennox said in a statement. "Amidst a barrage of publicity, the industry seized the opportunity to tell consumers about our zero-tolerance policy on conflict diamonds under the Kimberley Process and System of Warranties."

That opportunity—or threat—came most noticeably from the film Blood Diamond, which portrayed the height of the conflict-diamond issue during Sierra Leone's civil war of the late 1990s. The film received five Academy Award nominations and just came out on DVD, but thus far hasn't had an impact on diamond sales.

"Not only have we enticed consumers with concepts such as Journey Diamond Jewelry, but we also illustrated the positive role the industry plays in the United States and in producer regions such as Africa," Lennox added.

In terms of new product concepts, Journey was a hit. In just six months (Journey launched in August 2006), the diamond-jewelry initiative stirred up growth of 41 percent. That translated to more than one million pieces of Journey pieces sold during the period. Journey even surpassed sales of the popular Past, Present, Future three-stone diamond-jewelry concept. Journey, still in its introductory year, is expected to continue its success.

While that new concept is generating a lot of buzz, older initiatives such as Past, Present, Future and the Diamond Right-Hand Ring remained strong last year.

Three-stone sales were up 16 percent over 2005, and the sector now accounts for $3.7 billion in retail value. The category also saw a big increase, 14 percent, in average price over 2005.

For the third year in a row, the Diamond Right-Hand Ring concept saw double-digit growth, up by 10 percent. While the category continues to resonate with female self-purchasers, it has also become a popular gifting item, with men buying 69 percent of the rings.

Overall, holiday sales reached $5.5 billion, up 9 percent over 2005. The fourth quarter remained crucial to the growth of the diamond-jewelry category, with one in four pieces of non-bridal diamond jewelry purchased for the holidays. Necklaces were the most popular item, with sales increasing by 19 percent over 2005, thanks in large part to the new Journey styles.

The diamond engagement ring category increased to $6.2 billion for the year, up by 8 percent over 2005. Although the number of brides has been about the same, the category has grown because of an increase in average price. Diamond engagement rings have reached their highest average price ever at $3,200, compared to $2,633 five years ago.

"I expect that 2007 will prove to be just as challenging and just as successful as 2006," noted Lennox. "Our goals are to capitalize on the successes of the past and to leverage the full potential of newer initiatives, all designed to present emotionally compelling ideas to consumers."
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