Growing demand for gold jewelry helped push gold usage in the United States to a record 428.4 metric tons in 1998, an 18% jump—the highest ever. Gold jewelry accounted for 353 metric tons, another record and an 8% increase over 1997 figures. Consumption was driven by the expanding U.S. economy, rising consumer spending, low gold prices, and untraditional distribution channels such as TV shopping, electronic retailing, and discount chains.
Gold prices have hovered below $300 per metric ounce for more than 18 months, driving down production costs and lowering retail prices, especially in the low-to-middle range. As a result, department stores saw an 11% gain in gold jewelry units sold and an 11% gain in revenues last year, while discount stores and catalog showrooms sold 8.6% more pieces and gained 7.2% in receipts compared with 1997 figures.
Jewelers’ sales. The World Gold Council says independent and chain jewelry stores sold 8% more units of gold jewelry in 1998 than in 1997 and saw a 6.5% gain in gold jewelry revenues. A new JCK national poll of more than 150 independent jewelers supports those figures. Two-thirds of respondents (68%) said their gold jewelry sales rose during the past two years, and of those, two out of five (38%) had sales gains of 20% or more. The median gain was 15%.
Women between the ages of 18 and 45 accounted for most of this business, according to the survey. On average, 70% buy some gold jewelry from their favorite jeweler at least two or three times a year.
Despite the good news about gold, many jewelers are failing to take full advantage of their opportunities. To help jewelers boost their sales of gold jewelry without squeezing profit margins, the World Gold Council offers the following strategies.
Keep it visible. Don’t let your counter displays block jewelry in the case.
Be selective. Show a representative range of gold jewelry, and just one of each item. “Multiple copies of identical pieces are confusing,” warns WGC.
Display your product. Hang chains on neck forms to show length and construction. Show complete sets and coordinate pieces so customers know what goes with what. Place mirrors on every case for customer try-ons.
Show it off. Mirror-backed display cases with interior lighting show gold best. Use fabric-covered display elements in the case and presentation pads when showing jewelry to customers.
Be neat. Gold chains, bracelets, and other jewelry “look more precious in neat, separate rows, not in tangles or overlaps,” says WGC.
Know the basics. Salespeople should know key facts that make selling easier and customers happier. These include prices, information about sales and specials, karatage, style names (such as chain types), and colorful tidbits to “romance” the sale. (Forty-four percent of JCK survey respondents don’t give their employees specific training to sell gold jewelry.)
Inform by example. Sales associates should wear gold jewelry while on duty. It’s an effective selling tool that “gives customers ideas about accessorizing with gold and adds to the overall ambiance.”
Provide product facts. Use in-case signs with facts about the pieces (type, karatage, etc.), and information about styles and trends. Brochures from the supplier or from WGC also should be available.
Highlight with design. Use carpeting, color, and lighting to set your karat gold display area apart from the other sections of your store, and keep it exclusively for karat gold jewelry. “Don’t dilute the impact with plated or costume jewelry,” suggests WGC.
Keep it front and center. Remember that gold jewelry is a customer magnet.
Be specific. Signage should specify “gold” or “gold jewelry,” not just “jewelry.”
Make the surroundings luxurious. “Touches of luxury such as comfortable chairs and good mirrors reinforce the specialness of gold and make it easier for customers to say yes,” suggests WGC.
Make the pricing visible. This is essential, especially when you carry gold jewelry with a variety of prices.
For the worldwide gold market, 1998 was “the year of recovery,” says George Milling-Stanley, manager of gold market analysis for the World Gold Council. After an inauspicious start—global demand fell 40% because of widespread gold sales by individuals and groups in Asia—worldwide gold consumption rose steadily. The final quarter saw the highest level of consumption ever, 806 metric tons. The full year saw a shortfall of 11%, representing “a significant recovery,” says Milling-Stanley.
The fourth quarter’s strength resulted from strong demand in the United States, Europe, Brazil, and Mexico and a steady performance in the Middle East, says Milling-Stanley. That offset the continuing effects of economic and currency crises in several Asian countries. Overall consumption in emerging markets was 11% above 1997 figures.
A significant aspect of 1998 results was “a growing appreciation of gold as a monetary asset,” says Milling-Stanley. “All over the world, investors are looking for ways to preserve their wealth, and increasingly turning to gold.”
Selling Gold Jewelry
Rank the three most essential elements in selling gold jewelry in your store.
Variety of gold jewelry at reasonable prices
Relaxed sales approach
Do you give specific training in selling gold jewelry to your staff?
World Gold Council Gets New Leaders
Two appointments by the World Gold Council indicate a new emphasis on the financial role of gold and the global promotion of gold jewelry.
Haruko Fukuda, 52, one of Britain’s leading bankers and a respected authority on trade and monetary issues, became WGC’s chief executive officer on March 22. Based at the organization’s London headquarters, she will focus on monetary, investment, and regulatory issues.
Kitaru Inagaki, 51, has been appointed to the new post of WGC area manager for the Americas and Europe. He is based in the New York regional office.
Fukuda was born in Japan, lived in the United States as a teenager, and eventually adopted Britain as her home. She’s achieved some impressive “firsts”: first Japanese undergraduate admitted to Cambridge without a previous degree, first foreign woman member of the London Stock Exchange, first Japanese woman to reach a senior level in a Japanese financial institution. She chairs the Japan Society in the United Kingdom and has written books on international trade policy. Her appointment as the first female CEO of the World Gold Council was big news in Japan.
A resident of London, Fukuda has been a senior adviser at Lazard Brothers & Co. Ltd., a director at Foreign & Colonial Investment Trust PLC, a member of the council of Japan’s Nikko Research Center, vice chairman of Nikko Europe PLC, and a partner with James Capel & Co. She also worked for the World Bank in Washington, D.C.
As area manager for the Americas and Europe, Kitaru (“Kit”) Inagaki occupies a brand-new post. He joined WGC 17 years ago as marketing manager for Kruggerrand coins and became division manager for jewelry in Tokyo in 1988. Most recently he was area manager of South Asia, based in Singapore. He replaces Robin Sheer Ettinger at the WGC New York office. Sheer Ettinger, who resigned several months ago, was vice president of jewelry for the Americas. Inagaki’s new post includes additional duties.
Inagaki will have broad responsibility in addressing the challenges of marketing gold jewelry in North and South America and Europe, including distribution, consumption, and acquisition. He also will be involved with product quality, information, and issues like taxation and underkarating.
Inagaki’s priority will be the launch this year of the World Gold Council’s Gold Trends 2000, which looks at current sociocultural trends and their effects on tomorrow’s gold jewelry buying.
Gold jewelry looks better in neat, separate rows than in overlaps, the World Gold Council advises jewelers.
Jewelers’ Gold Jewelry Sales
How have your gold jewelry sales changed in the past two years?
% of respondents
|Median increase = 15%|
How much have your sales increased in the past two years?
% of increase% of those with increases
|1 – 9||27|
|10 – 19||35|
|20 – 29||18|
|30 – 49||10|
|50 – 79||6|
|80 – 99||2|
|100 or more||2|
|Median increase = 15%|