Branding: Where to Now? Part 2

benjanow@gmail.com

Central to the success of big brands has been the ability to endow a product with psychic values that touch consumers emotionally. These values transcend the mundane components of the product. Armani and Wal-Mart both offer garments made of wool, but that's where the similarity ends.

As for gems and jewelry, let's start with a simple fact. Our industry is too fragmented and has too low a profit margin to permit a full-blown branding effort. There are exceptions, most notably David Yurman. His long-term marketing and brand-building efforts were greatly assisted in two key ways. The consistent theme of his lines made the products immediately identifiable. For almost all luxury products, that's critical. Also, he was very early in using an inexpensive metal (silver) enhanced with 18k gold and stones to project great perceived value at attractive price points, allowing him to maintain good margins.

Other brands have crept into the public's consciousness over the years—Mikimoto, Kwiat, Hardy, Ripka, Coin, and others—but for the overwhelming majority of fine jewelry sales, the brand has been the retailer's name. Even so, displays in retail jewelry stores have included many other brand names for years, and that mode is not about to change. At the simplest level, organizing product in thematic, named displays projects an aura of substance, even if the effect is a long way from generating the emotional response of a real brand.

In his superb book, Living it Up—America's Love Affair With Luxury, James Twitchell makes a telling point: Many products achieve value for the consumer the more ubiquitous they become. Cell phones and fax machines accrue greater value (in this case meaning functionality) for us as more people use them. And the price goes down as production gears up. In luxury items, the opposite is true. They have greater value (psychic and monetary, in this case) the greater the rarity. And the price goes up.

We see this in watch brands that have limited production but command prices in the tens of thousands of dollars. Watches, by their nature, are all branded, hard to duplicate, and carry solid margins for the manufacturer. Geographic exclusivity is a big part of their marketing plans, because retailers should be able to exploit their rarity. It's no surprise that watches have become an important category for retailers.

Jewelry can take this a step further. Custom-made pieces, which can be produced by a skilled bench jeweler, are unique adornments. The ability of an individual to have a completely personal product has been a historic strength of jewelry. What better brand can there be? It should be an integral part of every jeweler's message to consumers.

Unfortunately, that kind of branding is ebbing, especially with the rapid decline in the number of independent jewelers in the United States. I remember meeting small-town jewelers who loved creating special pieces for their customers. I wonder if there will be another generation of such entrepreneurs. These days, both retailers and suppliers often hesitate to make custom pieces for a fickle public.

There are, to be sure, designers and manufacturers of one-of-a-kind pieces that offer the public unique items that can satisfy the desire for rarity. But getting those products in front of the public is increasingly difficult for two reasons: fewer retailers and concern about carrying items that don't come from established brands offering collections in specialized programs or are not part of core basics. So, we're back to the branding question.

The news isn't all bad. Jewelry branding should in large part be local in nature—a cooperative effort between retailers and suppliers. The public understands that fine jewelry is not produced en masse. The fact that a brand is not advertised in consumer magazines can even be a positive message, lending a sense of mystique and privacy that touches the consumer's intuitive perception that these are hand-made artifacts with limited availability. These brands need to have a distinct and well-articulated story to them (source, history, technology, inspiration, etc.) that can be readily understood.

Most important, the message needs to be genuine. The public has become very adept at detecting frauds.