On the jewelry trade show circuit, you can breakfast with platinum, lunch with a pearl fashion show, and wrap up the day with a diamond buffet. On the other hand, if you’ve been waiting for an event staged by the World Gold Council, you’ve had to go hungry.
It’s an understatement to say that WGC, once among the industry’s most active promotion agencies, has been keeping a low profile. With gold metal prices remaining stubbornly depressed, WGC downsized both staff and promotional budgets in most of its offices around the world. At the same time, as fashion trends veered away from the glitz of the ’80s and toward the minimalist look favored for much of the ’90s, jewelry design trends shifted from big and yellow to small and white.
Now yellow gold is making a comeback, and WGC is coming out of hibernation, again directing resources toward established jewelry markets instead of targeting only emerging markets. As a result, American jewelry retailers can expect to see some innovative new marketing programs.
WGC’s new regional director of marketing for the Americas and Europe, Dr. Kitaru (Kit) Inagaki, spoke to JCK about the future.
JCK: The World Gold Council has been practically unheard from for two or three years. Do you feel the time has suddenly become right for gold?
Inagaki: Society is moving in a direction poised for the resurgence of gold. There’s a renewed interest in color after all the minimalism, black, and white.
JCK: Where will you start?
Inagaki: First, we have to understand what the industry thinks is the most important thing for the council to do. Because of our absence, we weren’t sure what strategic direction to take, so we recently met with major manufacturers and retail chains.
JCK: What did you learn?
Inagaki: The hidden issue is that the marketplace needs to revamp its image of gold. The gold jewelry market has grown consecutively for the past seven years, but it’s now getting close to the first saturation point. It hasn’t become stagnant, but growth is slowing. Last year, for example, the jewelry market posted huge gains, diamonds and platinum had huge growth, but gold grew slowly.
JCK: Why? Isn’t gold still the primary jewelry metal sold in the United States?
Inagaki: We’ve already achieved the first stage of saturation at the mass level, where consumers have the basics. Now we have to create aspiration at a higher level. Once people have 15 pieces, they’re not anxious to add a 16th, so the World Gold Council’s role is to create an aspiration. There has been too much emphasis on commercial, affordable jewelry and on creating immediate return. But the retailer can do that himself. He doesn’t need the World Gold Council. We need to stimulate consumers to stretch.
JCK: There have been other times when the World Gold Council and, before it, Intergold, switched emphasis from the high end to the mass market, which accounts for the majority of gold sales. And that’s when things seem to fall apart.
Inagaki: If gold is too easy to reach, then it becomes low-end, but if you make it aspirational, you create a desire. Once you own a piece, it’s no longer an aspiration, it’s part of your life. At a recent international World Gold Council conference, I told the committee that when you put so much money toward a very fast return, you don’t create desire for the consumer. The last seven years we sold so much gold to consumers, but we can’t rest on our laurels. We have to reinvest and to keep reaching higher.
JCK: Your viewpoint is long-term, but corporate America is famous for focusing on the quarterly bottom line.
Inagaki: America is a retail-driven market, so I see retailers and wholesalers trying to invest more for future distribution, but I still see few manufacturers willing to invest a lot of money in product development. It’s like the recent ready-to-wear collections. The designers are too concerned with Wall Street. The designs are too safe, too sellable. There’s too much emphasis on the short term.
JCK: Is this on the low end or the high end?
Inagaki: Both! Once they find success with something, they keep doing it and are not ready to go beyond it. Lots of American manufacturers are still very afraid to take design risks, but they’re very brave to try new distribution channels, whereas European and Japanese manufacturers will take design risks, but they are very conservative about distribution.
JCK: You’ve got a lot of competition from the Platinum Guild. They’ve been pushing away, and platinum has really taken off.
Inagaki: Our strategy is different. Platinum was new to the market, and they had to go through more product development as well as convincing the retailers to stock it. The retailer already knows gold. We don’t have to bang on the retailers as much. I want to spend our money in a focused way—on ad campaigns. We don’t have 30 people working here, and with a limited budget, I really have to focus.
JCK: But if you want to create consumer desire, doesn’t there have to be more interesting, innovative product available on a wider basis?
Inagaki: Yes. That’s why we’re committed to the Gold Virtuosi contest. It’s the first international design contest for WGC, and we’re hoping to see some new approaches to gold jewelry evolve from the contest. The first round of judging is complete; the second round, with the actual pieces, [took] place in April, and 30 winners will be announced in June.
JCK: With the trend toward color, are you allowing designers to use gemstones?
Inagaki: Yes. We are already seeing more designs with stones in this contest. We’ve placed no restriction on value or dimensions of gems, just ecological restrictions—no ivory or tortoise shell.
JCK: What are some of your immediate plans to build consumer desire for gold?
Inagaki: The most effective thing is consumer advertising, and we also are negotiating with a few celebrities. The consumer [ad] budget is still a problem, but the new CEO thinks the United States and Western Europe are very important markets, more than the developing countries. We’re going to try to launch a new campaign at the June JCK Show and have the consumer ads break in September.
JCK: Will retail jewelers be involved?
Inagaki: Yes, it will involve co-op with both manufacturers and retailers, three partners. Also, we’re trying to develop some trade education programs, and we’re doing a significant U.S. consumer market research study. The field research was done in March, and we’re hoping to have the findings ready for The JCK Show.
JCK: What do you hope to learn?
Inagaki: Consumer attitudes toward gold jewelry, and also their buying habits. This year, we’ve redesigned the questionnaire to focus on two main issues. One is why consumers buy jewelry from a non-store retailer, such as television or the Web, and the other is to test a few hypotheses.
JCK: What do you mean by hypotheses?
Inagaki: We think the American jewelry market is shifting from 14k to 18k, and we’re also studying the importance of branding jewelry. If our hypotheses are correct, what’s the potential for the future? If the customer has 15 pieces of jewelry, they need to be upgraded, so does that mean higher karatage, branded product, or both?
JCK: How will you address the issue of white metal, since it’s become a jewelry wardrobe essential?
Inagaki: There will be a small white gold [ad] campaign, but it will fall under the umbrella of the overall campaign.
JCK: What about the Internet as a place to buy jewelry?
Inagaki: I’m worried. So many companies are going online, which is fine for something that has a fixed price, but if you’re looking for something unique that you want to touch, feel, and try, the Internet won’t do. It’s still not the same as the real thing.
JCK: It doesn’t look as if it’s going to go away, though.
Inagaki: No, it’s not, and I think Internet retailing is going to create one global, truly international marketplace, where anyone can buy anything from anywhere. This then raises questions about exchange rates and taxation. But I think it’s a long-term thing. Today, you’re always under the impression that you have to be the fastest and the first on the Internet or you’ll be embarrassed, but I think you need to assess the pros and cons at a consumer level first.
New Millennium Gold
What better time to get a fresh start than the first month of the new millennium? In January, the World Gold Council, in cooperation with the Vicenza Trade Fair Board, presented a special collection of gold jewelry to celebrate the big calendar change. It was created by 123 jewelry companies, from Italy, France, the United Kingdom, the United States, Portugal, Spain, and Greece. It was launched at VicenzaOro I, held in Vicenza, Italy. An innovative, 300-square-meter booth in a zigzag design bridged the indoor “river” in Pavilion F of the fairgrounds.
The collection, inspired by the Gold Trends 2000 design book, features innovative stylistic trends in gold jewelry. It’s meant to appeal to “innovator” groups of consumers, those who anticipate trends, appreciate creativity, and, ultimately, drive the gold jewelry business. Items from the collection are shown on these pages.
The design trends addressed by the New Millennium Gold collection are:
The Pleasure of Luxury. This is seen in the re-emergence of decoration and ornamentation and the return of yellow gold. Luxury is no longer about ostentation but rather about creativity, craftsmanship, and technology.
The Threads and Fabrics of Gold. Intricate effects are created from fine gold threads, wires, silk finishes, and mixtures of yellow and rose gold or yellow, rose, and green gold in one piece. Meshes are important, such as the gold shawl shown in the exhibition.
A Place Between Tradition and Innovation. Design in the new millennium often fuses different styles, expressive languages, and cultural inheritances. In gold, these expressions include granulation, chiseling, embossing, hammering, and other ethnic techniques. Inspiration comes from the ancient Romans and Etruscans, Celtic heritage, Renaissance Europe, and Oriental traditions, such as Japanese design.
For Play and Pleasure. Movement and playfulness, modularity and reversibility—these are the signatures of the trend. There are reversible two-tone bracelets that can be worn with either the yellow or white side showing, chains whose length can be chosen by the customer, and intricate rings with parts that fit together.
The exhibition is supported by a CD-ROM featuring the entire collection. A summarized version of the CD-ROM appears on the WGC Web site, www.new-millennium-gold.com. The council hopes the collection will become a stylistic reference point for jewelers and jewelry designers around the world.