Episode 85: Holiday Predictions, Rolex Goes Certified Preowned, Colored Diamonds - a podcast by JCK

You’ll hear JCK editor-in-chief Victoria Gomelsky and news director Rob Bates talk holiday predictions, the theme of which is cautious optimism. They discuss inflation and its affect (or lack thereof) on spending on jewelry, depending on strata. (The wealth divide is also the dividing line for this consideration.) The hosts also talk about Rolex’s recent announcement that they are entering the preowned watch space, and the questions this brings up about the secondhand marketplace. They also note a slowing down in the colored diamond market.

Show Notes

01:30 Educated guesses about the holiday season

03:40 Inflation concerns

09:15 Rolex launches certified pre-owned program

19:30 Colored diamond category slows down

Episode Credits

Hosts: Rob Bates and Victoria Gomelsky

Producer and engineer: Natalie Chomet

Plugs: @jckmagazine, jckonline.com

Show Recap

Moderate Hopes for the Holidays

As they look ahead and talk about the holidays. When Victoria spoke to Abe Sherman at Buyers Intelligence Group (BIG) who said, “I’ll tell you in ten days.” For jewelers, things don’t come into focus until the very last moment. They suspect this holiday won’t be as strong as last year. Most of those who Rob has spoken to think that even if it is a few points lower than last year, they could still characterize this year’s holiday sales as a success.

When Signet announced their results, Gina Drosos gave the reasoning that last year, many did their shopping early because of supply chain worries. This year, that doesn’t seem to be the case. October had been down, but things are picking up closer to the holiday. The last two years are such a high base. People don’t necessarily expect those levels to continue, but still hope for a successful year.

Effects of Inflation

Though inflation has calmed, it is still higher than we are accustomed to. This affects how the middle class spends on jewelry. Whether it gives the wealthy pause about how they spend, Victoria is not sure. Increasingly, those markets are bifurcated: the upper class does not have to make adjustments to their spending the way the middle and lower-income shoppers do when economic concerns come up.

The pattern of the last several years has been gains on the higher end and not as much on the lower and middle. During the pandemic, there were gains across the board. Now, we’re going back to the pre-pandemic pattern. Signet has noted that the gains they are seeing are at the high end, or “accessible luxury.”

Something jewelers learned during the pandemic was to up their digital game. Rob has noticed a lot of jewelers putting out interesting content on TikTok. This is the way of the future when it comes to reaching buyers. Jewelers have also used YouTube to tell their store’s story in an appealing way. Rob comments on the organic nature of TikTok. It feels personal. There’s a strange charm to it being just one person with their phone.

Rolex Enters the Pre-Owned Space

On December 1st, Rolex announced they were formally entering the preowned space. It is launching a program in Europe through Bucherer. Time will tell when it will come to the US. Bucherer is a Swiss retailer that has a presence in the US already through Tourneau, and are established in the secondhand space.

A few big questions are, who is setting the pricing, and how will this be received by the market? People in the secondhand watch space think this legitimizes the space and makes it less like the wild west. This will give retailers something to sell, since new Rolexes go out of stock so quickly.

How would a trade-in be priced? If people bring their Rolexes to a local dealer, will the dealer verify? Will they give credit or money? People often want to trade their watch in for another piece. Another consideration is who will be repairing the trade-ins? Victoria wonders if Rolex’s service centers will be handling all of these. Bucherer has a lot of pre-owned watches listed on their website, so it’s clear much of this will take place online.

Victoria talks about the Audemars Piguet trial of a preowned market. They never rolled it out fully, and didn’t respond to her call to comment on it. Other big brands haven’t commented either. Big brands have been doing well selling new watches, so they may not prioritize the pre-owned market right now.

There’s a large community of watch collectors who are cynical about Rolex entering this market. They think you have to buy lower quality preowned pieces before being considered for the higher quality goods. Rob asks if people think Rolexes will be dominant in the secondhand category. Rolex dominates every market it is in. Authorized dealers have been reluctant to comment. Interesting to see how much power one brand can wield.

Colored Diamonds Left Behind

Results had been stellar for colored diamonds at auction, and now things are taking a downward turn. De Beers put out a collection of eight blue diamonds. A few failed to sell, a few were pulled from auction, and so far, none have sold. There’s a slowing down in the colored diamond market that is starting to look like a trend. Rob speculates that the market has been oversaturated. So many have come onto the market that it dilutes the rarity, and takes away from the specialness of them. “So many blue diamonds, so little time,” Victoria comments.

The hosts wish everyone a wonderful, happy, safe, and prosperous holiday.

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