Columnists George Prout Applied Marketing 101 - The view from Vicenza

Applied Marketing 101 - The view from Vicenza

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As I write this, I am returning to America from the Vicenzaoro Show on a Delta 767 bound for Kennedy airport. The Winter Vicenza Show is the annual starting point for style and design in the world of precious metals, so if you want to understand the trends, you come here. Yes, I will also be in Hong Kong in March, and it is only after I’ve visited that city’s Show that I’ll start to pull the trigger on what we’ll be merchandising for the Fall Season, but if you really want to understand “what’s next” in our industry, it will have its roots in Vicenza.

No culture understands design and style like the Italians. Yes, their politics are more soap opera than statesmanship, and their economy is in a terrible mess, but when it comes to the creation of a thing of beauty from the inanimate, there is simply no finer eye or hand than that of an Italian. And in recent years, the Italians have needed every possible degree of artistic resourcefulness in order to navigate the combination of the global recession and the historic rise in the price of gold.

The Italian manufacturers, as well as the entire global gold jewelry supply network, have reacted to events beyond their control in a number of ways, by taking maximum advantage of three different metals. Let’s consider each of these separately.

GOLD

In a rising gold market, the central objectives in the jewelry design process are self-evident: use less gold, because it’s expensive, and use more air, because it’s free. The challenge, of course, is to do so in a manner that is aesthetically pleasing, and still structurally sound. And prior history suggests that the key to responding successfully to the challenge doesn’t lie solely in design. It also lies in engineering.

The gold spike that occurred in the ‘80s produced a wide array of manufacturing innovations, from the use of metal molds in the casting process, to the production of new kinds of hollow tube extrusions. But in my view, the most extraordinary innovation during the last gold spike was the shift in production to manufacturing techniques borrowed from Silicon Valley, where ultra-lightweight earrings were “printed” in the same manner that computer chips are produced.

Unfortunately, the last wave of innovations yielded products that were flat and uninteresting, as well as structurally compromised, to the extent that today’s gold producers have been forced to look elsewhere for innovative ways to bring down the weight, and therefore the cost, of their gold products. During the past several days, I saw a variety of manufacturing marvels, including the most recent evolutions of elastic gold weaves that mimic woven textiles, as well as extremely fine three dimensional latticework that was still exceptionally strong in spite of its light weight.

As one Arezzo manufacturer told me, “First, I have to design and build a machine. Then I play around with it, to see what it can do.” It seems that everyone in Italy is now designing machines, to see what they can do, and the results are amazing. This Fall, you can expect to see some exceptional new design trends that may actually breathe new life into gold.

SILVER

It’s extremely important to recognize that the population of skilled craftsmen who produced the fine Italian gold products that we have sold for years didn’t suddenly disappear. They are still there, and they are still working. The total value of Italy’s precious metal exports may have plummeted, as gold lost its luster, but in order to understand the trends, one must recognize that the same high grade craftsman who was making gold jewelry six  years ago is still making jewelry. It’s just composed of a different metal: Silver. And I’m not referring here to the cheap silver jewelry that we see coming out of the orient. The styling and finish of the silver jewelry I’ve been reviewing in Vicenza is simply exquisite.

The important question that I can’t yet answer is whether the American fine jewelry community will find it easy to embrace plated silver. Pandora certainly solved the resistance that many had to selling silver in a “Fine Jewelry” environment, and designer lines like Rebecca have softened the typical American retailer’s resistance to the idea of selling something with a micron finish.

There is no question that we saw the yellow tone and the pink tone heat up this past Christmas, suggesting to me that a subtle shift away from the silver color has begun, but there is still an intrinsic uneasiness that I detect coming from many old line jewelers about selling a plated product. So, will the silver we’ll be selling this Fall be silver in color, or will it be other tones? If what I saw in Vicenza is any indication, I am inclined to believe that as long as consumers want new colors, yet spend in lower price points, plated silver is going to get pretty hot in fashion accessory price points.

BRONZE

Simply put, Bronze is the game changer. From the major department stores to the major chains, yellow plated bronze has been selling like it’s on fire, with annual rates of turnover in the 7 to 10 time range, and margins that are very, very friendly. In reaction to what I’ve been hearing, we actually put a plated bronze Byzantine set in our Christmas flyers, under the name “Eleganza di Vicenza”, just to see what would happen. Predictably, our customers were a little leery of it, and placed initial orders in very small quantities. But then a funny thing happened when 10 million Christmas flyers hit the street in mid-December. Consumers didn’t just like it. They loved it!

So part of my motivation in going to Vicenza this week was to develop additional sources, and build a product line made of plated bronze. And I won’t tell you who else I saw doing the same thing, but based on the fact that some of the smartest folks I know were there in Vicenza, engaged in exactly the same process, I think you’re about to see an explosion of activity in this area. 

This may actually result in two outcomes. First, if you’re an independent jeweler, you’re probably going to be selling gold plated bronze in the very near future. Second, the sudden predominance of gold-colored jewelry being worn by American women may be the catalyst that finally flips the generational switch, reviving gold as the must-have jewelry color, and instantly rendering obsolete every white gold item in every woman’s jewelry box.

And wouldn’t that just be wonderful!

Class Dismissed!

George Prout is Vice President of Sales and Marketing for Gems One Corporation, and can be reached via e-mail at This e-mail address is being protected from spambots. You need JavaScript enabled to view it , or by phone at Gems One’s New York office at 800-436-7787.

 
 
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