IDEX Online Research: Westerners Lead the Pack - Consumer Jewelry Expenditures by Region
September 05, 07
The old adage, “Go West, young man,” applies to jewelers. Consumers located in the western part of the U.S. tend to spend more on jewelry than other regions of the U.S. However, it is important to note that jewelry expenditures by Westerners is not significantly enough higher than spending by consumers in other parts of the country to justify closing your stores in the Northeast, the area with the lowest per-capita jewelry expenditures, and moving to the West.
Further, there were some interesting shifts in regional spending between 2004 and 2005. In 2004, Western consumers far outspent consumers located in the South of the U.S. We were unable to decisively explain this regional difference.
In 2005, jewelry spending patterns were more in line with our expectations: regional spending differences really aren’t very meaningful. Because of the year-to-year differences, we wonder if there were some sampling anomalies in 2004 that were corrected in 2005.
The graph below illustrates per-household jewelry expenditures on jewelry in 2005. The regional differences – or lack of differences, depending on your point of view – are clear.
| Annual Household Jewelry Spending |
In contrast, annual household jewelry spending by geographic region showed significant differences by region in 2004, as the graph below illustrates.
| Annual Household Jewelry Spending |
Total Market Opportunity & Regional Population Correlate Closely
Many jewelers use total market spending potential, rather than spending per household, as a way to measure market potential. The theory is simple: spending per household may be high, but if there aren’t many households, there isn’t much of a market.
On a regional basis, total market potential, calculated by multiplying per-household spending by the total number of households, and population closely correlate. This also helps prove that while regional jewelry spending differences occur, they really aren’t particularly meaningful.
Jewelers with national chains may notice more differences in consumer jewelry expenditures by region, but it is usually a combination of some other factors which explain those differences.
The graph below illustrates “market potential” by region.
| U.S. Households -- Proportion of Jewelry Consumption |
