Summary
Consumers know RETAIL brands because ONLY retail brands promote consistently and sufficiently to become ingrained in the minds of consumers. Manufacturers of even the most successful jewelry brands spend relatively little in advertising to promote their brand due to low gross margins for this product. They simple do NOT have sufficient profit to justify higher ad spending. Only low cost brands with higher margins can afford national advertising and for the most part even those that do advertise spend relatively little in comparison to their retail counterparts. Retailers for the most part do not and will not promote a manufacturer's brand. Their advertising expenditures are used to sell mostly specific product they own or to promote their store image
Analysis
The JCK – Harrison Group study of jewelry consumers yielded information that should be of little surprise to jewelry industry insiders. While ‘branding” has been much touted as representing a new era in jewelry manufacturing, those who often talk about it the most still seem to understand it the least. In the jewelry industry, manufacturers are trying to promote their product on two fronts, to retailers AND consumers. The qualities and important issues to one are seldom, the same to the other. Among jewelry manufacturers, profit margins are slim compared to other industries such as cosmetics. These elements of low margin along with the need to promote to both distribution channels AND consumers combine to make establishing a manufacturer jewelry brand very difficult indeed.
Consumers know RETAIL brands because ONLY retail brands promote consistently and sufficiently to become ingrained in the minds of consumers. Manufacturers of even the most successful jewelry brands spend relatively little in advertising to promote their brand to consumers due to low gross margins for this product. They simple do NOT have sufficient profit to justify higher ad spending. Only low cost brands with higher margins can afford national advertising and for the most part even those that do advertise spend relatively little in comparison to their retail counterparts.
Retailers for the most part do not and will not promote a manufacturer's brand. Their advertising expenditures are used to sell mostly specific product they own or to promote their store image. In difficult economic times such as these, that makes good sense for retailers but makes brand building even more difficult for manufacturers.
Most of the problems consumers have with the jewelry industry can be traced to the “closed” nature of the industry. Retailers and manufacturers alike spend most of their time soliciting and acting upon opinions of others in the industry instead of consumers. Consumers assume product to be “over priced” because they don’t understand the industry and the industry does little to inform them. When retailer like Blue Nile creates information rich content and delivers factual information on pricing consumers feel empowered. When retailers hide the price or push for the sale, they feel intimidated or assaulted.
When manufactures and retailers alike look beyond the jewelry industry for examples of how to build brand and improve customer perceptions, many of these issue can be resolved. Good public relations can benefit both segments of the industry. Openness, honesty and understanding that a brand is more than a name will go a long way to improve the current picture.
