As Good as Gold
Gold’s high perceived value sustains demand despite higher prices. The World Gold Council encourages jewelers to keep focused on sales training and enhanced merchandising/marketing efforts in order to capitalize on consumer fascination with this noble metal.

By Deborah A. Yonick, Market Trends Correspondent

The higher price of gold combined with lower consumer confidence and the weakness of the U.S. dollar will provide distinct challenges for retailers going into the holiday selling period. Yet, history has proven that consumers have and will adjust their price expectations for gold. Jewelers, however, cannot rely on consumers’ innate attraction to this precious metal and, instead, must be proactive in telling a compelling story for gold jewelry at retail.

In a Q&A with Duvall O’Steen, director, jewelry public relations and promotion for the World Gold Council (WGC) in New York, JQ explores the current climate for gold, the jewelry trends for the coming Fall and holiday season, and tips and talking points that jewelers should consider when developing their strategies for the remainder of the year.

JQ: What is the current climate in the gold market?
DO: Gold is becoming increasingly difficult to find and produce. At the same time, global demand for gold jewelry at retail value has doubled from $50 billion in 2001 to over $100 billion in 2007. It’s interesting to note that all of the gold that has ever been mined amounts to about 160,000 tons, which could fit under the first level of the Eiffel Tower.
Specifically for the U.S. market, gold jewelry sales in 2007 rose 3 percent to $19.37 billion in value, and by 2 percent to 250,039 million pieces or units by volume, according to data compiled independently for WGC by GFK Audits & Surveys. Over the last seven years, the price of gold has risen from $271 an ounce in 2001 to over $1,000 an ounce in the first quarter 2008. However, an increasing gold price is not a recent phenomenon.

JQ: Why has demand historically risen for gold jewelry in the face of higher gold prices?
DO: Gold’s price has increased steadily over many generations and research shows the investment value of gold is something consumers consider when purchasing gold jewelry. The 1980s bull market for gold is one such example of a time when consumers continued to buy gold jewelry despite higher prices. Research shows that as the media shines a spotlight on gold prices, consumers’ appreciation for gold increases. They understand though that it’s probably safer to focus on gold jewelry’s meaning and durability rather than its base worth as a commodity. But compared with other luxury products such as handbags or shoes that naturally deteriorate over time, gold has always proven to be a better store of value over the long term. In uncertain economic times, the lasting intrinsic value of the gold in jewelry is very important to consumers as both an enduring gift of love and a significant selfreward.

JQ: How should jewelers discuss gold in their sales presentation?
DO: Gold messaging in this challenging economic market should emphasize gold’s beauty, rarity, lasting value, and the unique qualities that make it so desirable. Th e WGC has developed specific talking points, tips, and training strategies in a new brochure available to jewelers through our office, which includes such advice as:
• Update your gold jewelry inventories with fresh assortments that feature lasting value and meaning. Showcase collections that especially encourage up-selling—like matching bracelets and earrings.
• Avoid stocking overly lightweight gold pieces that could damage easily. Instead, focus on designs with versatility, added value options, and classic looks. Highlight features like adjusters for variable lengths of chain, add-on enhancers, and reversible pieces for day-to-night wear.
• Tell your customers that gold has never been more valuable. Emphasize the value they’re getting for the money by focusing on gold’s durability, its importance as an heirloom, and the likelihood that it will maintain relevance over the long term— unlike handbags or shoes.
• Tout the fine quality craftsmanship, better design, and more sophisticated production processes that also contribute to the higher price of gold jewelry.
• Romance the historical allure of gold, mentioning Cleopatra, King Tut, or King Midas to evoke customers’ cultural affinity for gold. Talk about your own affinity for gold, its warmth and sunny color, how it makes you feel good, and how great it looks with all skin tones. Use emotionally evocative language like “radiant”, “warm”, “beautiful”, “cherished”, and “treasured”.
• Offer creative promotions and in-store events like trunk and fashion shows to engage customers to explore the lasting value and beauty of gold jewelry.

JQ: Which product types lead in gold jewelry sales?
DO: In terms of volume, earrings are the best selling gold jewelry type, at 95,550 million units, according to our independent research. In value, necklaces, including chains, are the best sellers at $7.34 billion. While the biggest market share growth last year was in fashion (non-bridal) rings—up nearly 4 percent in volume and almost 5 percent in value.

JQ: What trends do you consider important in gold jewelry design for the second half of 2008?
DO: The recent renaissance of gold in fashion and luxury goods has inspired product development and design innovation in jewelry. Designers are creating richer looking gold jewelry with highly detailed textures, hammered surfaces, and higher karat alloys that are evoking cultural sophistication and higher perceived value. But because of the higher price of gold, many designers are attempting lighter gram weights. Those who are successful are the ones who avoid thin, easily damaged pieces, in favor of using negative space via lattice, scroll, or open work designs.


Rose gold continues to heighten in popularity offering new choices for the gold enthusiast. More designers are crafting lovely feminine looks in rose gold, including link chains, textured cuffs, and creative pendants. Rose-cut stones also are on the rise, while flower and nature motifs continue to reign. Our interest in nature has inspired a growing green movement among designers touting eco-friendly jewelry using recycled gold, or giving back to the environment via donations to charitable causes.
This earth trend also inspires the use of earth tones, as well as black variations in combination with gold. Oxidized silver creates a very hip black look that is being mixed with yellow gold in innovative ways, which also helps lower pricing for bold gold pieces. Browns such as tigers eye, chocolate pearls, smoky topaz, champagne and cognac diamonds, as well as dark hues like onyx, black sapphire and black diamond are popping up in elegant new designs for the Fall and holiday seasons.
The metallic trend is strong on the fashion runways that in recent seasons have been aglow in shiny gold and silver fabrics, handbags, and shoes. Gold cuffs and link chains, in particular, as well as statement rings and long chains are popular accessories for these shimmering looks.

For more information, visit the World Gold Council website at www.gold.org