One milestone in a woman’s life is the purchase of her first piece of “real” gold jewelry. No matter how small or basic, it will take a special place in her jewelry box and reserve itself for the dressiest of occasions.

If she fits the profile – a middle-class woman buying gold jewelry as a fashion accessory – this consumer probably will shop price to begin her gold wardrobe. While she may gloat over her $99.99 14k gold earrings now, however, some industry observers worry that the “cheap, cheap, cheap” attitude taken by many discount outlets ultimately will sour her attitude toward gold jewelry, especially when she’s ready for more expensive purchases.

It may not be 18 karat, may not have a designer’s name attached to it and may not retail for thousands of dollars, but moderately priced gold jewelry (retailing for under $1,000 and including mostly 10k, 14k and some 18k gold) has become the focus of a widespread image campaign. “The new generation of consumers is looking for products that have the potential to become an heirloom,” says Christine Yorke of the World Gold Council. “Gold is a special product, and it is not beneficial to position it simply as a commodity.”

From tearing down “Sale!” banners to providing more variety in product, retailers and manufacturers are striving to give the women who buy gold jewelry the best of both worlds: classy jewelry and a great price.

Embracing mass retailers

“Selling gold jewelry is more than 50%-off sales!” says Michael Barlerin, chief executive, Americas, World Gold Council. This assertion at a press conference in April summarizes the council’s plan to deliver a more upscale image through traditionally inexpensive channels.

The council’s annual reports in the past five years show the bulk of gold jewelry sales moving steadily to the high-volume side of the business.

In 1996, 67% of all gold jewelry sold was purchased from a discount store, department store or non-store retailer.

Accordingly,WGC has turned to the mass merchandiser to spread the word about gold. A large part of its campaign will be better educating these retailers how to market their jewelry, continuing an already apparent trend toward giving jewelry departments increased attention. “In the past, people walked by the jewelry counter in Wal-Mart and didn’t even know if the jewelry was real,” says Yorke. “But one reason gold jewelry sales have grown in the discount sector is the stores have upgraded their departments.”

Yorke says WGC is encouraging retailers to downplay the sale message. “We tell them not to scream ‘Sale,’ but instead to print ‘Price was $500, now $250 in small letters in their circulars,” she says. WGC also works with jewelry departments to create better visual imagery, better train their sales staffs, stock a wider assortment of products and provide an overall more attractive presentation.

Like it has done in the past with independent retailers, WGC will begin an advertising campaign featuring an array of media. “The ads will position gold as a special and unique product,” says Yorke.

GOLD JEWELRY CONSUMER

• 70% of gold jewelry sold in the U.S. in 1996 was purchased by women for themselves or as gifts for others.

• 40% of all sales in 1996 were impulse buys for “no special occasion.”

• 80% of gold jewelry sales were in 10k or 14k gold (checking this)

• 67% of all gold jewelry sold in the U.S. in 1996 was sold by non-traditional retail channels (discount stores, department stores, catalog showrooms and non-store retail).

Differentiating product

Mass merchandisers and independent retailers alike know that for the basics in gold jewelry, customers tend to shop by price point. Some companies, however, give customers an edge with unique products and competitive price points.

“We have reached the point of maturity with the karat gold jewelry business,” says Michael Gusky, chairman and chief executive of Aurafin in Sunrise, Fla. “The next step is to draw

the consumer to the product for something other than price.” Accordingly, Aurafin obtained the exclusive license to market a type of 14k gold patented by Leach & Garner International, North Attleboro, Mass. Gusky says it’s stronger than typical 14k gold and has a natural color and shine.

Best of all, the Leach & Garner name is a brand that Aurafin and its retailers can market to consumers. The company makes classically styled jewelry to which consumers consistently respond, and the products are very similar in price to regular 14k gold jewelry, Gusky says. The one unique selling point is the quality of the gold.

Silber’s in Houston, Tex., takes a different approach by sticking to traditional price points but offering a flair in design. “We always give our customers more bang for their buck,” says Rachel Silber, marketing manager. “For the same amount of money they would pay for a basic look, we give a unique look, better finish, different styling.” All of Silber’s jewelry retails for under $600, she says.

Because consumers who shop for moderate gold often have a price in mind, Silber says they can misinterpret how much the jewelry costs. “When people look at the merchandise, they think every piece is very, very expensive,” she says. “Retailers actually put the retail price beside our pieces so people don’t have to be nervous about coming up to the case.”

Marketing an image

Manufacturers provide plenty of point-of-sale materials, ads, brochures and display elements to help retailers sell moderately priced gold. But building an image can require marketing efforts that are a little more abstract.

The sales presentation – the way the jewelry appeals to a consumer’s eyes, mind and heart – is crucial. “Our better customers don’t just throw the gold chains on a scale and sell by weight only,” says Steven Bell of Steven Bell Associates, who represents the gold jewelry company Candela of New York City. “They can’t just throw gold jewelry in a case anymore.”

When Coleman Co. in Rapid City, S.D., sells its Black Hills Gold Jewelry to retailers, it addresses price last. “We sell the product on the basis that it’s affordable to the middle-class American, go through the features of perceived value and then talk about price,” says Gogie Enstad, marketing director. In turn, retailers of the 10k gold designs can use the legend of Black Hills gold and the jewelry’s design and workmanship as selling points. “They point out the durability of the ring shank, the casting of designs as opposed to stamped metal, the quality of the stones we use and the fact there are 40-plus steps to making each piece of jewelry. Each piece is hand-inspected along the way,” says Enstad. Retailers also sell the fact consumers are buying karat gold rather than costume jewelry, sometimes for almost the same price.

Coleman and some other companies try to avoid the “bargain basement” approach. “We do not go into a store and say ‘The only way you can sell this is by marking it 70% off.’ We are not supportive of that, although some of our retailers do it,” says Enstad.

Gori & Zucchi, best known for its higher-end 18k gold Uno a Erre line, goes so far as to ask that its moderate gold not be discounted. “Our gold jewelry has consistent intrinsic value,” says President Paolo Novembri. “If you buy the jewelry today or tomorrow, the value is always the same.”

Novembri says his company creates brand awareness by marketing its 18k line through advertising in Vanity Fair, Harper’s Bazaar, Town & Country and other fashion magazines. Though these ads are geared toward more well-heeled women, he says they work for marketing the 14k jewelry also. “The sophisticated consumer no more goes into a store to buy generic products,” he says. “A piece of jewelry is a statement, and even a basic chain is personalized by adding a brand name. It’s like buying a simple white shirt, but with the name of a well-known designer on it.”

Moving into higher-priced lines has proven to be a popular strategy for marketing gold jewelry. The latest to join the ranks is QVC, which debuted and sold out of its Arte d’Oro collection of 18k gold jewelry April 7. What’s more, department stores and chain stores are adding 18k; even stores that sold “bridge jewelry” ($19.99-$49.99) are moving into higher-priced 14k. The jump has resulted from consumer demand and better consumer education by retailers, says Bell. Most importantly, he says, all the hubbub about higher-priced gold is making all consumers excited about the quality and value of karat gold jewelry – and a higher-priced image is born.