WerxBlog Header2015

The Introversion of the Jewelry Industry

jewelry-industry-navel-gazingI am of a split mind when it comes to  comparison between the jewelry industry and the fashion industry. On the one hand, jewelry is definitely part of a woman’s wardrobe and it plays an important role in her expression of her fashion sense (this is true for men too, but to a lesser extent). On the other hand, jewelry is more enduring than fashion, lasting far longer than for one or a few seasons.

Of course, there is the whole category of fashion jewelry, which is more trend oriented and typically at lower price points than fine jewelry.  Fashion jewelry should be getting a lot of our attention, as social and economic trends show that consumers (outside the 1%) are spending less money less often on luxury goods. In fact, fashion jewelry is where department stores, internet sellers, and boutiques are stealing the independent retail jeweler’s lunch.

These observations cause me to ask two questions:

  1. Why do the independent retail jewelers not focus more attention on well-made, well-designed fashion jewelry?
  2. Why does the jewelry industry not have more industry-sponsored consumer-focused promotion, similar to the fashion industry’s various fashion weeks and design councils?

I suspect the answer to the first question lies in two issues: First, the jewelry industry tends to be very inwardly focused, which has resulted in it becoming further and further detached from the consumer. Second, the independent retail jewelers are still sitting on far too much inventory – and much of the reason for that could be due to the first issue.  So let’s talk about the fact that the industry is not sufficiently consumer-focused.

The Jewelry Industry Isn’t Focused on the Consumer

To be fair, there is one organization in the industry that is focused on taking-it-to-the consumer: JA’s Jewelry Information Center (JIC). In my observation, that group, led by Amanda Gizzi, does way more with paltry resources than one would think possible, and does more to keep the industry’s interests on the radar of consumer editors than any other organization or even combination of organizations. Without JIC, the consumer press would form its perspectives of jewelry entirely outside the influence of the jewelry industry. Think about that for a moment. Think about how much sway the fashion industry itself has on fashion publications. Consumers form their opinions of fashion based on what the fashion industry tells them to think, through fashion shows, fashion editorial, and what shows up in retail store windows.

But with all due respect to what JIC can accomplish with its limited resources, it’s not enough. Why? One concern is that the industry sends out information to the consumer world in the form of editorial, but it doesn’t receive any feedback, or certainly not feedback that is consolidated enough to consider the implications. Another concern is that consumer-focused promotion is not addressed adequately (in fact, barely at all) at the manufacturer and industry levels.

We Must Learn from Other Industries

Fashion shows not only provide information to the marketplace, they deliver almost immediate feedback from the marketplace. Not only do the buyers for all the major department stores show up, but so does the press and a large contingent of influential consumers. At, during, and after each fashion show, there is immediate feedback. The fashions are dissected in the fashion press, the fashion press and business press publish both business and consumer reactions to the styles, and the buying behavior of the department store buyers (well-informed by constant and aggressive consumer research) is a direct line of feedback regarding what will be hot-or-not for that season.

This is also how the Consumer Electronics Shows work for the gadgets industry, how Cannes and Sundance work for the film industry, and how the Tokyo Motor Show and the North American International Auto Show work for the automobile industry.

Of course, these industries are significantly larger in dollars than the jewelry industry.*

But jewelry requires more early and ongoing feedback from consumers than other relatively sized industries such as cosmetics or footwear, where lower price points make experimentation at retail more palatable and in which sports stars, movie stars, and the fashion industry have significant influence. Consolidation of retail in footwear and cosmetics means that individual retail companies have larger advertising and promotion budgets, and it’s noteworthy that the manufacturers of those products speak directly to the consumer in major, ongoing promotional campaigns.

Perhaps a better comparison of a similar-sized industry would be the leisure products industry, which sells high-priced goods like RVs, camping equipment, boats, and 4-wheelers. Through publications aimed at enthusiasts and regional sporting goods shows, the leisure products industry introduces consumers to new features and styles. This gets consumers excited about heading out to retail to buy new toys. Large retailers like Cabelas may have significant advertising budgets, but smaller retailers also benefit from the shows and the promotional support of manufacturers.

What got me thinking about this? An article in today’s Luxury Daily that talks about how the Council of Fashion Designers of America (CFDA) is looking for ways to improve New York’s Fashion Week. According to Steven Kolb, president and CEO of CFDA, “Fashion Week has evolved over the years with the influence of technology, but the format and function of fashion week have stayed the same.” CFDA has commissioned a study to discover how they can “use technology to its fullest advantage, and how designers can best maximize their resources to engage the customer.”

I think the jewelry industry should take this advice to heart as well. A tremendous amount of energy has gone into demanding that DeBeers support the industry (again) with a(nother) consumer advertising campaign, and DeBeers has responded with a half-hearted re-do of its former A Diamond is Forever message. Not only do I suspect this message’s time has come and gone, I also believe that our expectation that DeBeers bail out the industry is misplaced.

Closed Systems Do Not Evolve

The jewelry industry has become a closed system. The majority of its energy is focused on generating income within the industry, with little attention paid to the consumers we require to keep us in business. What is the answer? I’m not exactly sure, though I have some ideas. But here’s what I do know: As an industry, we must talk about this problem. It’s bigger than sustainability, it’s bigger than sourcing, it’s bigger than low-cost manufacturing from other countries, or Blue Nile or Sam’s Club or Costco. In fact, if the industry doesn’t resolve this major disconnect between the consumer and those of us who make and sell jewelry, we could solve all those other problems and still become entirely irrelevant in the next 10 years.

Let’s discuss.

* (US Film Industry: $679 billion; US Automotive Industry: $524 billion; US Fashion Industry: $225 billion; US Consumer Electronics Industry: $208 billion; US Jewelry Industry: $63.3 billion)

Andrea Hill

 

Don’t miss a single post of The ‘Werx Blog by Andrea Hill.



* required information




This entry was posted in entrepreneurship, Jewelry Industry, leadership, strategy and tagged , , , , . Bookmark the permalink.

9 Responses to The Introversion of the Jewelry Industry

  1. Ben Janowski says:

    A good subject, and there are many reasons why the jewelry industry cannot or will not come close to what other industries do. It does happen – whether one likes the jewelry of not, Yurman, Pandora and Alex & Ani show that. But it is rare. Key reasons? Fashion companies need to chase or create trends every day, while basic jewelry remains essentially unchanged for decades (any reason to redo a solitaire?), and represents a huge portion of total US jewelry sales. An overwhelming number of practitioners, even those that understand trends and promotion, are far too small to have the money to build image. We do not have the profit margins, the size or the talents (too expensive!) to follow other industries. This is a persistent problem, one that everyone is acutely aware of.

    • Andrea says:

      You’re right – fashion does need to chase and create trends far more rapidly than jewelry does. But I think that part of the reason that the jewelry industry is becoming irrelevant is that same “why redo a solitaire?” thinking. Women only really need one solitaire. Many women could care less if they ever have a solitaire. But most women wear jewelry, and not just costume. While the jewelry industry has stayed stuck in its old merchandising paradigms, women have been buying fine jewelry, designer jewelry, art jewelry – all kinds of jewelry made with precious gemstones and precious metals – from outside the traditional jewelry industry.

      I do not believe that only businesses with high(er) margins can afford to focus on understanding the customer better – customer focus is central to achieving any level of economic advantage, and therefore a requirement of all businesses in all industries. And any industry that cannot afford to access talent has seen its best days go by already.

  2. Gary Dawson says:

    I think you are on to something, Andrea! In answer to your first query, part of it may be that the price point of so-called fashion jewelry may prohibit the investment in time that is required to produce thoughtful, well-crafted designs in the fashion category. Most of us designers are not snooty about it but I can’t invest two days of design time and another day in production to sell 4-5 $12 items, the numbers just don’t work. Part of that equation of course is that as a small, independent designer-manufacturer, I don’t have the sales reach to generate the numbers of sales to make that work out more advantageously. And there are a lot of businesses out there just like mine that are now coping with competition from manufacturers of silicon wedding bands and the like, I’ve written about this in my own blog.

    All that being said, you have a real good point about there not being a forum for feedback between consumers, designers, and the industry in general. This is something that I and a couple of partners of mine are beginning to address and I’d like to bring you into that conversation at some point if you are interested in the project.
    Thanks for all you do for the industry, it is apparent that you care and it means a lot!
    Your friend,
    Gary D

    • Andrea says:

      Ooh – big clarification here. When I say fashion jewelry, I don’t mean $12 items. I guess that’s “costume jewelry” to me. I realize in retrospect that some people do use the terms ‘fashion’ and ‘costume’ interchangeably – so perhaps we need some new vocabulary – something informed by the consumer even! What I’m referring to is jewelry in the $250 – $2,500 category – jewelry that is well-made, well-designed, and appeals to the sensibilities of fashionable women. It’s not unusual to spend money in this range for items of clothing, handbags, and shoes, so there’s no reason we aren’t selling more jewelry in this price range. And some jewelry stores are selling things in these price ranges, but it’s jewelry that lacks imagination, same old stuff that’s been out there for the last 25 years. In my opinion, every store in the country should want to carry lines like Bree Richey’s – right in the price range I’m talking about (there are many more designers doing work in these ranges, but Bree pops to mind). You can’t wear a piece of Bree jewelry out of the house without women coming up and asking where you found it!

      Of course, I’m not surprised you are busy cooking up new ideas :) . You’re always up to something innovative! Give me a holler if I can be of help with anything! Yes, I care. Like you. Like the majority of jewelry industry folks we know. And figuring out some ways to improve the jewelry industry profile with consumers is worthy work that we can all do together.

      • Gary Dawson says:

        Ah thanks for that clarification! For some reason I’ve always called that price range the “bridge”. Makes more sense now…
        And yes, I’ll reach you to you very soon, thanks for being open to a conversation.
        G

  3. I think that the jewelry industry needs to embrace technology and take cue from the big fashion brands by marketing more on social media. I think it is foolish to think you can’t afford to create a buzz around your brand with social media marketing! Honestly I think this is what the industry needs. We have to realize that the way people shop is changing. Not many have time these days to go to a brick and mortar store to shop when most are only open 9 to 5. More people are starting to trust buying luxury items via the Internet. Or at the very least do their research about a brand online before they decide to make time to visit the store. Jewelry brands need to start developing their brands online!

    • Andrea says:

      I definitely think that’s part of it Ethrane. The jewelry industry has been slow to adopt technology – not only for online marketing, but also for the technologies within the store, the manufacturing plant, and the studio that facilitate the streamlining of product and brand information for both internal and external purposes. The one group within the industry that has embraced social media whole-heartedly is the independent designer, who does it for her own survival. More and more frequently I hear that if the designer did not draw traffic to retail store trunk shows, nobody would show. That’s a sad commentary on what is happening at retail. I know for a fact that there are dozens of retailers that are doing a terrific job joining the new millennium – but dozens is far too few given that we are an industry of thousands. And of course, the responsibility doesn’t lie only there – we are change resistant up through the entire supply chain as an industry. Even manufacturers and suppliers that have committed to working in social media are still treating it like the management of catalogs, brochures, and print ads. We have a lot of work to do, and we’re running out of time to do it!

  4. Osnat Gad says:

    Andrea, your article is a concern and we discussed it numerous times.

    There is disconnect between editorial fashion jewelry and reality. Most of the jewelry editorials in fashion magazine exhibit jewelry at prices that their audience cannot afford, which turns the jewel into a fantasy. Young or working women cannot conceptual buying fine fashion jewelry and also feel that their friends will not know the difference. These women also buy jewelry to compliment their wardrobe.

    I understand that the cost of making fashion jewelry with precious metal and precious stones is high but it is also important to remember that even one precious material can turn the fashion jewelry into an affordable piece.

    However, the manufacturer is unable to sell this concept to the retailer. The mainstream retailer desperately needs a change in their inventory to attract more customers. The retailer should also consider becoming an expertise on fashion trends and knowledgeable in the art of complimenting jewelry to one’s wardrobe.
    Today jewelry Ecommerce websites connect jewelry to a lifestyle. This is the reason for their success.

    Our industry will not diminish but it will change.

    • Andrea says:

      Great observations Osnat. Right now I’m working with a retailer in Dubai, and I am so heartened by the fact that their Brand teams are constantly focused on getting old inventory out of the stores and new styles in – while constantly monitoring the expectations of consumers. It feels more like being in an apparel retail environment than jewelry, and this group demonstrates that this kind of merchandising can absolutely be done with gold and diamonds. Of course, selling high-end goods in Dubai isn’t necessarily a challenge, but since this retailer also sells in the rest of Emirates, Kuwait, Oman, Bahrain, Qatar and Saudi, I think there’s a reasonable comparison to be made here.

Leave a Reply to Ethrane Ravenstone Cancel reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>