Is Brand the Plan?

 

July 1998

Precious Metals:News

Is Brand the Plan?

The marketing of gold jewelry by brand name takes hold

It's not a trend yet, but the efforts of some karat gold jewelry manufacturers to market their products by brand name seem to be paying off. Others remain happily anonymous to consumers. Each approach has its supporters within the retail world.

Two Who Do
Aurafin and Gori & Zucchi Inc. report success with consumer-press ad campaigns and in-store promotions for their respective Leach & Garner and Uno A Erre brands. Slowly, these companies say, consumers are recognizing their names or at least warming to the brand-name concept when faced with traditional generic-product comparisons.

"Sales of Leach & Garner gold indicate the programs are working," says Ed Leshansky, director of marketing for Aurafin of Sunrise, FL. "They've outperformed our expectations."

Leach & Garner's year-old, $1 million campaign focuses print advertising in women's magazines such as Vogue, Cosmopolitanand Glamourand has included spots on cable television. Leshansky says the company hopes to expand its television advertising this fourth quarter in some markets. The company's full program includes in-store sales training and comprehensive point-of-sale material.

"Retailers have been wanting this for a long time," he says. "Now the salesperson doesn't have to speak just about price when selling gold jewelry. He can be a more valuable consultant."

Because virtually all consumer products are branded today, jewelry shoppers are increasingly hesitant to buy items that aren't, Leshansky says. "Research shows that consumers' greatest obstacle to buying gold jewelry is not being able to judge if they're getting a fair value," he says. "With name branding, that problem is eliminated. The brand helps them understand what the product represents – the quality, the consistency of color, the fact that it's protected by a patent – then they can judge. When buying by commodity, that's impossible."

The strategy used by New York-based Gori & Zucchi Inc., for its high-end, Italian-made Uno A Erre line is similar. It advertises in consumer fashion magazines such as Elle, Harper's Bazaarand Vogue,as well as in Town & Countryand Architectural Digest,"all high-end and highly recognized," says President Paolo Novembri. Like Aurafin, Gori & Zucchi follows through with in-store training and extensive point-of-sale material. Also like Aurafin, the strategy is working. "It has been very successful from many standpoints," says Novembri. "From the beauty standpoint, assured success and other issues relating to distribution – and especially margins."

The company's goal is to have 300 stores selling Uno A Erre in this manner. Since the concept was introduced in the U.S. two years ago, 40 have been selected, including Clark's Jewelers in Shreveport, LA. Vice President Ginger Clark of Clark's Jewelers says her Uno A Erre boutique is a hit with customers. "In our gold department, we were buying this and that and I never had a unified selection," she says. "With Uno A Erre, we developed an escalating range of gold; you begin to understand how to present it so it's easier for the customer to see."

Clark's offers 300 different Uno A Erre pieces in a range of price points, including a wide-mesh 18k necklace retailing for $4,000, the only one in the country at press time. Clark reached an agreement with Gori & Zucchi to sell $40,000 worth of Uno A Erre products and expects to have no problem doing so.

"I'm not saying we don't buy other gold," says Clark, "but the relationship between the supplier and retailers is going to become more important. If you expect to grow in sales, this is the only way."

No Names, Please
Other industry members aren't so sure about branding. Many gold jewelry makers are unconvinced branding is necessary to build sales in what has been a successful, unbranded market segment.

"Some of my [retailer] customers love to carry designer lines, but others find the price of certain lines don't follow the market and they're not able to turn them," says Renee Miller, president of Aaura Inc. in Chicago, a manufacturer of gold jewelry that does not promote its brand name. "Many also find it difficult to keep up with quotas when they exist. I want people to go into my customers' stores and ask for the merchandise, not my name."

The higher prices of many branded items are a deterrent, says Kimberly Shilkaitis, advertising and marketing director of Oro International in Chicago. "When you get into brand naming, things start jumping in price," she says. "Not because it's more expensive to make – it's name-dropping. It's not something we'd ever consider."

Leshansky and Novembri acknowledge their branded products cost more, but say the difference is minimal. "Leach & Garner gold does afford the product a premium price," says Leshansky, "but it's virtually the same price as ordinary gold. It's not dollar for dollar, but it's close."

Novembri says Uno A Erre selections cover a broad price range and its distinctive designs discourage direct price comparisons.

Retailers not linked with a branding program have mixed feelings about their usefulness. They suggest that while branding may eliminate some confusion about gold jewelry purchases, it could also eliminate some of the product's mystique.

"For the jeweler, I think branding is not always a good thing," says Lester Erich, director of merchandising at four-store Hamilton Jewelers, based in Lawrenceville, NJ. "It's true people can always walk in and recognize a branded item. But I think jewelry stores like to have merchandise that's considered theirs, not a manufacturer's. If everything gets so branded," he says, "it's not unique anymore."

– by Richard L. Carter






Copyright © 1998 by Bond Communications.


 

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