The demand for platinum from the jewellery sector in the US has risen to 22% of total demand, while the demand for platinum in the automotive sector has moderated to 30% of total US demand, said platinum jewellery organisation Platinum Guild International’s (PGI’s) Insight November 2018 report.
Jewellery is now ranked the second-largest demand source for platinum in the US, up from the fourth-largest in 1993 after the automotive, chemical and electrical sectors, the report stated.
“Platinum jewellery retail consumption regained momentum in recent years following the global recession and experienced a five-year average growth of 9% from 2013 to 2017. The US is the third-largest platinum jewellery market and is set to grow again this year.”
The narrowed price gap between platinum and white gold settings owing to lower platinum prices also helped this metal expand its share. Retailers are yielding higher margins on selling platinum jewellery sales and are increasingly willing to promote it, said the report.
Currently, karat gold and silver metal-only jewellery take large shares in the self-purchase segment, while platinum-only is not prevalent in the US market, despite the fact that platinum is perceived well by many US consumers.
“The lower metal price versus gold creates an opportunity for platinum to enter into the nonbridal category as it fits the mid-to-lower price ranges that are popular for self-purchase. Such new development has been initiated by PGI and supported by jewellery retailers who want to improve their brand positioning and expand their customer bases, as platinum is widely considered a prestigious metal by consumers,” the report said.
Looking forward, with platinum being an aspirational metal, it is expected to grow alongside the diamond market, gaining shares from white gold, along with continued, dedicated marketing efforts. The current metal price scenario presents platinum jewellery with an opportunity to become a more accessible and distinguished choice for young consumers to buy jewellery for nonbridal occasions.
Platinum jewellery in the US is usually not viewed as a separate category, but as a setting for diamond and gemstone jewellery especially in high-end retail stores. The increase in platinum demand in jewellery has also benefited from the growing diamond market, the PGI report added.
America’s diamond industry saw rapid growth between 2011 and 2017 after the recession, and represented 52% of the global diamond jewellery demand in terms of value in 2017.
“As diamonds pair well with white colours, platinum and white gold are the most popular metals for diamond jewellery settings. While quality and colour are the important reasons consumers choose platinum for diamond bridal jewellery, nearly 30% said securing and protecting their diamond is the main reason,” the PGI report stated.
In a recent survey, 24% of consumers in the US who have not bought a diamond ring said they would prefer a platinum setting, which is slightly lower than the preference for a white gold setting at 27%.
However, a further 13% of consumers would prefer a platinum crown even with gold a setting, indicating potential capacity for platinum to grow in the bridal category.
Additionally, The Knot 2017 study showed that platinum also has a larger share in independent jewellers (17%), compared with national and regional chains (5%).
The small share of platinum in national and regional chains can be attributed to their positioning as mass-market retailers focused on price points, a challenge when considering the historically higher prices of platinum versus 14 ct white gold jewellery.
“The increasing market share of local or independent retailers versus chain stores from 40% to 45% over 2011 to 2017 for bridal jewellery supported platinum jewellery demand growth, as bridal consumers demand customised products and premium service. Bridal jewellery comprises the majority of platinum jewellery demand in the US.”
However, along with the growing economic power and higher employment rate of females, more consumers are buying jewellery for themselves. A recent US consumer survey shows over 70% of consumers bought jewellery for themselves in the past and 37% of respondents plan to buy jewellery for themselves in the next year.