The World Gold Council is switching channels. Its annual report points out that mass merchants – discount stores, department stores and non-store retailers such as QVC and the Home Shopping Network – all had better growth in gold jewelry sales in terms of dollars and units than independent jewelers and chain jewelers. As a result, the World Gold Council’s major new direction is to support these non-traditional outlets.

This is bad news for traditional jewelry sellers and the manufacturers of higher-end jewelry. WGC will shift its funding away from them. There is good news, however. WGC’s spending will help mass merchants go upscale in the way they choose, market, sell, promote and advertise gold jewelry, and this could benefit everyone. As more consumers begin to focus on gold’s intrinsic qualities, they will be less attracted by 50%-off sales, the bane of the traditional jeweler’s existence. “Advertising is more than gold jewelry in clusters with ‘price-off’ promotions,” says Michael C. Barlerin, chief executive of Americas, World Gold Council.

ALL THAT GLITTERS
Tracking the percentage change in retail gold sales according to distribution channel from 1995 to 1996.

RETAIL CHANNEL	DOLLARS	UNITS
Discount stores	+10%	+9%
Department stores	+8%	+8%
Non-store retail	+5%	+30%
Chain jewelers	+3%	+3%
Independent jewelers	+6%	+4%
Catalog showrooms	-3%	-4%
Source: World Gold Council

In more news from the annual report, WGC announced gold jewelry sales overall rose 5% from 1995, marking the fifth consecutive year of sales increases. Sales totaled a record $12.3 billion. Independent jewelers and chain jewelers remain the market leaders in dollar share, with chains holding 26% of the market and independents 21%. Non-traditional outlets shared the rest of the market.

Sales were up for all outlets except for catalog showrooms, with discount stores enjoying the biggest increase: 10%. In numbers of units sold, non-store retailers’ units skyrocketed 30%, but their dollar sales were up only 5%.

Neckchains remained gold jewelry’s juggernaut, with earrings, bracelets and charms also enjoying brisk sales.

Consumers Value Study Says Quality

When consumers shop for jewelry, they want quality, says a new nationwide study. Consumers in the poll made 198 purchases in the first three months of 1997, compared with 136 jewelry purchases during the same period of 1996. The quarterly poll, conducted for JCK and Jewelers of America by Chilton Research Services of Radnor, Pa., asks 1,000 people about fine jewelry and watch purchases made in the past three months.

Of the purchases that were made, almost half (42.9%) cost $100 or less, and those purchases were predominantly made in jewelry stores, echoing last year’s result for the same time period. Though most purchases weren’t over $200, many consumers ranked quality high.

Almost half (46.2%) of those responding cited quality as something they look for from their jewelry retailer. More than half (55.3%) look for a guarantee or warranty on purchases. Repair services are important to 41.7% of those polled, followed in importance by cleaning (34.8%), design (33.3%) and appraisal (24.2%). Only 1.5% said price was important to them.

The most popular merchandise was precious metal without stones. In this category, the most popular items were earrings, followed by bracelets, necklace/pendants, rings, chains, charms, pins and cuff links.

The poll results are statistically reliable enough to be projected nationwide with a margin of error of +/-3%.

White Metal Shines in Italy, Germany

White metal is all the rage in Italy, which means sales of platinum jewelry are on the rise, while in Germany platinum is enjoying steady, moderate growth, according to the countries’ respective offices of the Platinum Guild International.

SERVICE MATTERS
Consumers picked services they were most interested in when shopping for jewelry.

Guarantee/warranty	55.3%
Quality	46.2%
Repair	41.7%
Cleaning	34.8%
Design	33.3%
Appraisal	24.2%
Price	1.5%
Based on JCK/JA Survey of Consumer

Here’s a look at some of the top trends in Italy:

• Understated styles, with simplicity, discretion and linear design being the watchwords.

• The greatest increase in sales is in wedding bands, which posted a 20% gain in 1996 over 1995. Classic and contemporary styles are popular, especially when contemporary styles incorporate small diamonds or combinations of matte and polished surfaces.

• The classic solitaire ring is back.

• Pendants are the necklace of choice, especially the diamond solitaire necklace.

• Pearls are also part of the white craze, often set in platinum and teamed with small diamonds.

• New Age values, such as natural minimalism and understated simplicity, are popular with young people looking for jewelry that says “less is more,” and finding it in subtle platinum design.

• Catalogs are the marketing venue of choice, as consumers enjoy looking at elegant, informative “jewelry magazines.”

In Germany, platinum is also enjoying steady, albeit moderate, sales growth. Platinum growth is the bright spot in an otherwise stagnant – or slightly declining – jewelry market.

Platinum consumption in units for 1996 was 5% ahead of 1995, with a 2% gain in monetary value of sales and a 3% gain in the amount of metal consumed. At the same time, these figures dropped for diamond jewelry and gold jewelry.

Diamond jewelry consumption by unit dropped 13%, total sales value dropped 3% and metal/carat weight consumption drop-ped 4%. Gold jewelry unit sales were down 4%, sales value was down 2%, but metal consumption was stable.

The total market for jewelry sales in Germany registered a 4% drop in unit sales for 1996, a 2% drop in dollar value and no change in metal/gem consumption. The biggest platinum unit sales gains in 1996, by category, were in wedding rings (up 17%) and necklaces (up 16%). Earrings posted a 9% gain and non-wedding rings a 1% gain. In gold jewelry, the only category to post any unit gains was wedding bands, up 12% over 1995. Diamond jewelry figures were not available at press time.

The lion’s share of platinum sales are made in the US$85-$175 range, but the biggest growth category is in pieces retailing for less than $85.business up in ’96, says JA study

For two-thirds of almost 800 retail members of Jewelers of America, sales in 1996 were up an average of 14% from 1995, according to the latest JA Annual Business Survey, released in March.

The survey was sent to JA members throughout the country in January. Sales success varied by store size. While only 60% of stores with annual sales of less than $450,000 reported an increase in sales, business increased for 74% of stores with sales between $450,000-$749,000, 71% for businesses with sales between $750,000-$1.49 million and 77% for stores with sales of more than $1.5 million.

1996 JA SALES RESULTS

Sales Volume	Increased	Decreased	No Change
Less than $450,000	60%	27%	12%
$450,000-$749,999	74%	9%	17%
$750,000-$1,499,999	71%	12%	16%

Respondents also reported on holiday sales, with 56% saying sales were up in December. However, more than 30% of respondents said their sales were down during the holiday season an average of 13%, and 11.8% reported that business was about the same as in December 1995.

The highest climbs in category sales were in diamond jewelry and karat gold jewelry in 1996, retailers reported. Diamond jewelry sales were up an average of 14.3% for 65% of the respondents, and karat gold sales were up an average of 12% for 52% of the respondents.

Jewelers seem optimistic about 1997, with 54% of respondents projecting an increase of at least 10% in sales and 38% expecting business to remain the same as 1996.

Jewelers of America, 1185 Ave. of the Americas, New York, NY 10036; (800) 223-0673 or (212) 768-8777, fax (212) 768-8087, e-mail jewelersam@aol.com. affluent asians want to emigrate

One in six affluent Asians plans to emigrate, and one-third of those to the United States, according to a survey by MasterCard International. The company surveyed 400 people in each of 13 Asian-Pacific countries in December and targeted middle- to upper-income families, reported The Asian Wall Street Journal.

On the whole, 16% of all respondents said they planned to emigrate. The desire to relocate was particularly strong in the Phillippines (33%), India (28%), Singapore (19%) and Korea (20%). Plans to emigrate indicate that quality of life has not yet risen to many affluent families’ expectations, says the Journal.

In Hong Kong, where tension mounts over China’s reclaiming of the colony, only 15% of respondents said they planned to emigrate, but the survey did not report what passports respondents hold, MasterCard told the Journal. About 500,000 to 1 million Hong Kong citizens hold foreign citizenship, according to the newspaper.

The study also found that 30% of respondents would educate their children at schools abroad if they had the choice. Of these, 43% would send the students to the U.S.

State of the Unions

According to American Demographics magazine and the U.S. Census Bureau, the number of couples who cohabitate, as your mother might whisper, “without benefit of marriage” increased steadily from 1990 to 1995. A jeweler might point out they’re also living together without benefit of wedding ring sets. Here are a few related marriage and shack-up statistics:

• The U.S. had 53.9 million married couples in 1995, and 2.2 million of them were married that year.

• Nationwide, 5.4 million couples were unmarried but cohabitating. Of these, 3.7 million were couples of the opposite sex who could, legally, be married.

• An additional 1.8% are same-sex couples who, though not able to make the union legal, might be in the market for wedding bands anyway.

• Two-thirds of opposite sex cohabitating couples have at least one partner under the age of 35. Most have never been married.