A consumer insights study of the jewelry and watch market

In 2006 American consumers spent $62.2 billion buying jewelry and
watches, posting a dramatic 6.5 percent increase over sales in 2005 of
$58.4 billion. The luxury end of the jewelry market posted the
strongest growth last year with fine watches rising 39 percent and fine
jewelry up 10 percent. By contrast the fashion or costume segment in
the jewelry market declined by 8 percent and sales of costume watches
were off by 20 percent, according to the latest statistics on the
jewelry and watch market reported by Unity Marketing in a new market
research study.

The Jewelry and Market Watch Report, 2007 provides the latest
statistics on the jewelry and watch market. Included in the new study
are details about the sales and growth in the jewelry market by product
type, material, gemstone, and channels of distribution. Also included
are projections for sales through 2010.

Men's Jewelry Market Came Into Its Own in 2006 and Is No Longer An
After-Thought

"2006 will be known as the year the jewelry industry finally discovered
the men's market," said Pam Danziger, president of Unity Marketing and
author of Shopping: Why We Love It and How Retailers Can Create the
Ultimate Customer Experience.

"Men have traditionally been the biggest purchasers of jewelry, while
women are the most important consumers of jewelry. That hasn't changed
in 2006, but what is notably is how strongly the market for men's
jewelry grew. Men's fine jewelry -- defined as jewelry made from
precious or semi-precious stones and/or 10k or above gold, sterling
silver or platinum -- is no longer a step-child in the jewelry business
but makes up about 10 percent of the overall jewelry market."

Included in the new Jewelry & Watch Report, 2007 are details about what
types of jewelry and watches were purchased included jewelry type (e.g.
ring, necklace, bracelet, etc.); jewelry metal (e.g. gold, platinum,
sterling silver, etc.); gemstone (e.g. diamonds, precious,
semi-precious, pearls, etc.), for both men's and women's fine jewelry
and watches.

Jewelry Stores Came Surging Back After Losing Share for Several Years

As jewelry consumers taste turned more upscale, their shopping choices
also shifted. Jewelry shoppers turned first to specialty jewelry stores
for their purchases, with total market share rising to 50 percent of
sales. Department stores and non-store retailers such as the Internet,
TV shopping and mail-order, also saw growth in sales, while shoppers
spent less buying jewelry in discount department stores and specialty
fashion boutiques.

"Jewelry stores made a real come back in 2006," Danziger explains.
"Jewelry shoppers in their search for higher quality merchandise and
more fashion-forward designs found that the service and expert advice
available in jewelry stores was exactly what they needed."

She points to industry-leading Sterling Jewelers, with over 800 Kay
Jewelers, 135 luxury-leaning Jared The Galleria of Jewelry stores, and
341 regional chains, as a competitor that made the most of consumers
shift toward more specialty retail. "Sterling Jewelers reported 14.9
percent revenue growth in their most recent fiscal year to reach $2,
652 million in sales, which put them into the coveted first place as
the nation's top jewelry store. Clearly specialty jewelry retailers
like Sterling Jewelers are aggressively pursuing the jewelry consumer
marketplace and are not willing to give up share to less specialized
retailers such as discounters."

Included in the new Jewelry and Watch Report, 2007 are profiles of the
nation's top ten jewelry retailers, as well as details about where
shoppers turned for their last jewelry or watch purchase and what
features about the shopping environment influenced their shopping
decision.

Gemstone Jewelry Growing More women's fine jewelry accented with
diamonds and other gemstornes was sold in 2006. Strong demand was noted
for colored semi-precious stones, such as opals, topax, amethysts,
etc., as well as for diamonds. Danziger notes that well over 90 percent
of women's fine jewelry sold in 2006 had some gemstone content with
diamonds being the gemstone of choice.

Details about sales of jewelry by gemstone type are reported in the
Jewelry and Watch Report 2007, as well as data about the last jewelry
item purchased, including amount spent, type of item, material and gem
and where purchased.

Fine Watches Were Growing Category but the Future Looks Less Certain

Strong demand for fine/formal watches was reported in 2006, with sales
in the watch category growing 39 percent. But this category may start
to slide as many younger consumers reject watches as a 'status symbol'
and turn to their cell phones as their essential time keeping
accessory. For example, one-third of jewelry consumers agreed with the
statement 'I generally don't wear a watch much any more, since I use my
cell phone to keep time,' however 51 percent of consumers aged 18-24
years and 48 percent of those aged 25-34 years agreed with this
statement.

Danziger says, "If I were a watch marketer, this attitude so prominent
about young consumer would keep me up at night. It is esstential for
watch marketers to position their brands as fun and functional, rather
than push the status-button too strongly. Young consumers embrace a
much more casual lifestyle, so the idea of a watch as a 'status symbol'
just doesn't connect."

New Consumer Insights about Jewelry Shoppers, What They Buy and Where
They Shop

Unity Marketing has completed a new study of the jewelry consumer
market based upon in-depth qualitative focus group research and a
quantitative research study of jewelry buyers shopping preferences,
behaviors and attitudes. This research study includes research data and
statistics about:

Jewelry Market Size and Growth: What is the size of the jewelry market
and how rapidly is it growing? How is the jewelry and watch market
segmented by the type of jewelry product and material of composition?

Demographics of the Jewelry Market: What kinds of households buy
jewelry and how do different demographic characteristics impact and
influence jewelry buying behavior, (e.g.: HHI, size, composition,
ethnicity/race, education, etc.); what are the different demographic
segments within the jewelry market? How similar or different are
households/consumers who purchase jewelry for personal use and for
gifting.

Jewelry Buying Behavior: What are the primary characteristics of the
consumers' buying behavior related to jewelry and why they buy, e.g.
for self or for gift? Where do they shop for jewelry; how do they
decide to purchase one piece vs. another; how do they set a budget for
jewelry buying; what is the role of brand in jewelry buying behavior;
how much do they purchase and how much do they spend on key categories
of jewelry. How do men and women differ in their jewelry shopping and
buying behavior?

Psychographic Profile and Segmentation of the Jewelry Market: The
psychographic profile of jewelry consumers will reveal their different
drives and motivations in purchasing jewelry; what factors are more or
less important in driving jewelry purchasing decisions; how can jewelry
marketers and retailers better understand the hearts and minds of their
consumers. In essence, we will discover "why people buy jewelry."

Specific Jewelry and Watch Data Included This study examines both the
fine and costume jewelry market segments, as well as the preferences
and behaviors of gift buyers and jewelry self-purchasers. It provides
details about jewelry choices and spending in four major categories of
jewelry:

Fine women's jewelry Fine men's jewelry Women's costume jewelry Men's
costume jewelry Fine watches, including men's and women's Costume
watches, including men's and women's

For the fine jewelry category, detail data is also included about metal
of composition, such as fine gold, platinum, sterling silver; and
gemstones, such as diamonds, precious gemstones, such as rubies,
emeralds, etc., pearls, and semi-precious stones, such as amethyst,
topaz, etc.

It explores what type of jewelry is bought within each category, such
as necklaces, earring, bracelet, brooches and pins and how much
shoppers spend on specific items of jewelry. Through the level of
purchase detailed analyzed, marketers and retailers can discover the
typical pricing parameters for each type of jewelry based upon what the
typical jewelry buyer spends.

Jewelry Shoppers and Their Shopping Preferences Are Also Examined

Details about different types of jewelry shoppers are included, with
special emphasis on the differing motivations and buying behavior of
men and women, as well as gift buyers as compared with self-purchasers.

The study is of great value to jewelry retailers, both those that
already compete in the category and those that want to grow their share
of the market. It reveals the stores where jewelry consumers prefer to
shop, including the top ten jewelry retailers, as well as the nation's
leading jewelry retailers in these categories:

Department stores Discount stores Chain jewelry stores Fashion clothing
stores Non-stores, including mail order, television and internet

The report reveals why shoppers choose the stores that they do to shop
for jewelry. It explores many strategies for retailers to capture
greater share of the jewelry shoppers' wallet.

This important new research study is an investment in the future of
jewelry marketers and retailers. It provides data and insight so that
jewelry marketers and retailers can maximize their opportunities in the
jewelry market today, as well as to plan for their future.

Special Features in Jewelry Report, 2007

Included in this report are:

Brand preferences in both jewelry brands and watch brands.

Profile of the affluent, luxury consumer market for jewelry and
watches, including the luxury jewelry and watch brands that luxury
consumers favor.

Powerful guidance for retailers and marketers in pricing of different
jewelry items, based upon research findings of what the majority of
consumers are paying today when they make their purchases.

13 research-based Business Building Tactics to help jewelry marketers
and retailers grow a more vibrant business.

7 major Marketing Opportunities that will mean greater success for
jewelry companies and retailers that develop strategies to take
advantage of these emerging opportunities.