Dollars and Scents

The buzzword for a decade or so has been “brand.” The industry has been drunk on the idea, but there has been some reconsideration lately. Millions have been poured into branding efforts, but not one comes to mind as successful. Local brands, yes. Designer names, yes. But real brands, no. At best, we’ve seen some good labeling.

A column in The New York Times Magazine covered recent developments in the perfume business, which has been dominated by designer-branded perfumes for decades. That business busted out of a slump some years ago with Jennifer Lopez’s Glow, by Coty. Major producers had used celebrities before, but this opened a floodgate of new scents with celebrity names. The record of successes, the author says, stinks (his word). Most new scents don’t make it through the first year.

A cousin of mine was a chemist at a perfume producer years ago, and he often chuckled at the industry’s ability to take a few cent’s worth of rose petals and sell it for $50. The industry signs up a celebrity, creates a name, devises wonderful packaging and advertising, and launches. If that sounds familiar, it’s because our industry began to believe the same technique would work for us. But, as one manufacturer said to me, “I gave up after spending a small fortune.” He is not alone.

The perfume industry has fabulous margins and the potential to sell a product into the hundreds of millions. That permits aggressive pursuit of the next big hit and the dumping of failed efforts. But that policy rarely fits jewelry.

The only recent case I can think of is Tiffany and architect Frank Gehry. This is a major effort to build a new presence, for a name from outside the trade. Gehry, true to his style, has designed a line that is abstruse in the opinion of many. We’ll see if Tiffany’s full-court press will succeed.

The Times column discussed the “celebrity craze.” Consumers are fickle and frequently looking for the next icon to enhance their self-image. But long-term success comes from an idea that is less ephemeral than an A-list name. Illustrating the point, the fragrance industry has released more new products in the last two years than in the 20 years before 1990. The result is that consumers are being trained to constantly expect something new from our celebrity- driven culture. That works for the fragrance industry, which can afford to spend big money looking for those few big hits.

Most jewelry retailers know the reality of branding. There are handfuls of manufacturers that have brands with longevity and unique product propositions. Many come and go and never achieve national recognition—or any recognition. There are exceptions, but they are rare. This is not the case because people are incompetent or lazy but because the industry thrives on diversity, and that produces countless suppliers and near-endless choices for retailers.

That reality is not going to change in any imaginable scenario. What will change is the degree of professionalism needed for success—for both suppliers and retailers. For us it isn’t dollars and scents, it’s making sense with our dollars.