So what was this past Christmas like? With an economy in the dumps, gold at record highs, and an uncertain future, people were finding it hard to just be extravagant. Since most of my inventory is custom made gold and platinum jewelry with genuine stones and only a small amount of nicely made silver items, sales were not as prolific as normal. I’m sure other goldsmiths such as me, found themselves in the same situation. The funny thing is that I have lots of items priced when the gold market was much lower than it currently is.
Think about the majority of jewelry store ads you heard this past season. Most stores were advertising diamonds or other gemstones mounted in sterling silver. While on the surface this looks like a good cost alternative, ultimately you are offered jewelry that will be continually loosing stones, or appearing scraped up. Silver is a much softer metal, meaning weaker prongs. Jewelry of this type of manufacture will ultimately cost the consumer more money in repairs and lost stones. Sadly, the major cost of most jewelry items is not the metal but the stones and labor to manufacture it. For example, consider a nice quality one carat blue sapphire ring with a few accent diamonds. Three or four years ago, when gold was less, the ring might retail for about $200, the sapphire for $600 and the diamonds for another $200 making the total retail price about $1000. Now the ring might retail for $500, and the diamonds and sapphire about $900, making the total cost $1400. So a forty percent increase, in four years while gold has increased nearly 300% by itself. The more expensive an item is, such as a large diamond ring or a tennis bracelet with many carats of diamonds, the smaller that percentage increase caused by gold is.
So now we get to the ultimate insult in jewelry this year, the Pandora phenomena. Consumers are being deluged by a marketing strategy of individualized beads to express your life’s journey. Beads that only the wearer can identify with. Whats wrong with this scenario? So, here’s my marketing ad for next year:
Mary: “Jane, what a lovely bracelet you have, what is it?”
Jane: “Why thank you Mary, it’s a Pandora bracelet. Each bead Tom bought for me has a special meaning. This bead is for our wedding, that bead there is for our fist born. And this bead is for that special vacation we took….”
Fade out to black and fade in to a massive factory, machines pounding, steam spaying conveyor belts. The camera zooms into a machine stamping out millions of little silver beads………………falling by the hundreds into a fifty gallon barrel. Forklifts in the background stacking barrel upon barrel, floor to ceiling.
Big white letters scroll across the TV screen: Where’s the individuality?