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Americans are buying diamonds instead of vacations

USA jewelry sales are climbing.

According to Bloomberg, Signet Jewelers, the parent of Kay and Jared, saw sales rise at the end of the last quarter and continue to climb in August. Tiffany & company reported the same trend. And diamond jewelry was one of the top product categories at both Macy’s and Bloomingdale’s during the quarter ending August 1.

Macy’s CEO Jeff Gennette said in an interview:

All the high-end products are very strong. Well-heeled shoppers are looking to spend the money that would ordinarily go toward trips or meals, and some are even dropping more than $50,000 on jewelry, he said. You think about the discretionary spend that’s coming from experiences.

We’re taking revenge

There’s a term for this:”Revenge Spending” was coined in China some decades ago to describe pent-up consumer demand, unleashed in the 1980s after the chaos and poverty of the Cultural Revolution. It describes spending by a consumer base that finds itself flush with cash after weeks of canceled plans. A consumer base anxious to feel “normal” again.

Photo credit: Burst

Indeed, what’s happening now in the USA happened in the Middle Kingdom in the spring, as cities there emerged from the pandemic:

  • Shoppers spent a record-breaking 2.7M USD in a Hermès Flagship stores in Guangzhou the day it re-opened.
  • Tesla sold a record number of cars in the spring, growing by 450% month over month.
  • LVMH saw a 50-percent rise in sales of its top brands on the mainland during April.

Diverted funds

A segment of the population has money in their pockets already. They’ve had flight and hotel reservations refunded. They cancelled vacations or family-trips as well as dining, sporting, music and pageantry events. As we emerge from the crisis those static funds are becoming diverted to other feel-good items. And if travel, sports, concerts and pageantry are slow to resume that amount could increase.

Photo credit: Icons8 team

Cautious optimism

Safety, health and support for those working on the front lines must continue to be our highest priority. Meanwhile, let’s hope the entire economy, including luxury consumption, will resume stronger than ever as markets continue to open.

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