We believe the future viability of our products for the consumer, particularly gold primary-value items, is foremost. Our concern includes consumer issues such as the environment. Social responsibility messages resonate with the consumer. Our industry is proceeding in a responsible manner, and we must communicate that clearly to the public. Price is another consumer issue. In May 2006, gold topped a quarter-century high of $725. There’s less elasticity than we require at this higher market for a high percentage of price-point-conscious consumers. And where do prices go from here? Finally, will new generations of consumers view gold as less hip, trend-worthy, or fashionable? Trend-right gold must be celebrated.
Competition issues include the growing acceptance of alternative metals like steel, titanium, and silver, and the popularity of nonjewelry items such as iPods and BlackBerrys.
The third major issue is demographics. Baby boomers account for nearly 20 percent of the population but hold over 70 percent of the wealth and buy 80 percent of the luxury goods. Millennials (ages 18–34) are the new key. Technology and luxury are two things they clearly desire. As boomers fade, we need to replace their demand by exciting these newer generations.
Ensuring future viability will require product development, branding, and relevant marketing. Aggressive product development requires significant investments of people, time, and money. Our industry continues to be challenged with low margins that mitigate such investment, especially longer paybacks from capital equipment in newer, advanced technologies. New horizons must be forged if we are to compete.
Branding must be cultivated on two levels: trade and consumer. Trade marketing must clearly differentiate offerings, and provide turnkey marketing to our clients for their strategic positioning. Consumer branding—the absent ingredient in our industry’s profile—must reach a level competitive with nonjewelry marketers. This must be accomplished by investing in consumer campaigns that create identity, provide information, inspire interest, influence the purchase decision, and instill confidence. Consumer branding aligned with store branding will deliver the consumers required for our mutual future viability.
Relevant marketing will combine the previous goals with a message that demonstrates good design, good value (preferably luxury), social responsibility, and a campaign that sells, together with our clients.
Sluggish gold jewelry demand is a current problem for our industry, but an uninterested consumer is the larger future concern. World Gold Council awareness programs, i.e., “May Is Gold Month,” are the right vehicles, but our industry must embrace targeted, aggressive branding and marketing programs for the future or risk ever-increasing revenue shortfall. Margins must be sufficient to support such programs. Collaborative product development with our clients will ensure achievement of their strategic gold jewelry initiatives.
Our industry won’t be competitive by focusing solely on cost. Future viability with the consumer is our critical issue.