Summary
In spite of nearly a decade of jewelry product brand advertising, not one brand makes the top 10 list according to the latest research from Harrison Group and the JCK. Here's how consumers think about jewelry brands.
Analysis
Investors in large retail jewelers should welcome these latest research findings. According to a recent JCK-Harrison study, most jewelry buyers think of prominent jewelry trade names like Zale and Kay as brands almost to the exclusion of all designer and manufacturer’s brand names. Despite millions of dollars in advertising since the DTC inaugurated its supplier of choice program which “encouraged” manufacturers and retailers alike to develop jewelry product brands, virtually none have gained any awareness with consumers.
Ironically, the study found that Zale was the most recognized brand, followed by its larger competitor Kay in unaided recall. Zale has lost market share to Kay Jewelers since about 1994, when Signet Group decided to take the name national. Presently, Zale is losing money, closing stores, consolidating functions, selling off divisions, and increasing debt to fund stock buy backs. The significance isn’t that Zale remains number one, but that in just over a decade, Kay Jewelers recognition has gone from near obscurity as a regional jewelry chain to second most recognized jewelry brand in America. If true, it’s only a matter of time until Kay edges Zale out for the number one spot as Zale reduces marketing spend and closes more stores.
Other trade names that were also mentioned as brands were Tiffany and Cartier as were two watch manufacturers Rolex and Seiko. Rolex and Tiffany's recognition was predictable because both names are widely known as symbols of wealth and status in the US and overseas. The same is true for Cartier, but to a lesser degree as its #8 position demonstrated.
Seiko brand gained traction in the 1960’s as US veterans brought Seiko mechanical watches back from the Vietnam War. Later, under Pliskin and Morea’s leadership, Seiko replaced Bulova as the #1 brand in the US with quartz watch technology. Eventually, Bulova ended up on the back walls of fine jewelers as Seiko brand gained prime showcase position. Eventually, Bulova was sold to the Lowes Corporation as much for its real estate holdings as it was for brand value.
In spite of Seiko high brand awareness, Citizen now out sells Seiko brand today. In fact, Citizen is the leading mid market brand in America, but didn't make the top ten brand list. Interestingly, Citizen bought Bulova brand in the spring of 2008, a move that will increase its manufacturing leverage and probably increase Bulova distribution in the market; if Larry Grunstein, President of Citizen. USA has anything to do with it. However, despite Citizen's dominance in the US market, it didn’t show up on either the aided or unaided list of top ten jewelry brands. That could because of methodology or suggests consumer awareness has less to do with brand selection at the store level than most marketing specialists would like to admit.
Clearly, researchers expected some of the thousand or so designers, jewelry manufacturer’s and retail jewelry product brand names would have gained a degree of consumer recognition in the last decade. Apparently that hasn’t happened. According to the research results, names like “David Yurman, Roberto Coin, Scott Kay, Hearts On Fire, and popular names like Mikimoto and ArtCarved didn't make the top 10 at all.”
Realistically, that isn’t surprising. Anyone familiar with brand management knows it can take over $50 million in advertising in a single year to establish a brand in the US market and equal amounts over several years to maintain and grow a brand’s awareness. Even with that level of marketing support, brands still fail because fuzzy differentiation and poor distribution.
With the exception of large companies like Zale, Signet, Tiffany, Rolex, Cartier, and DeBeers, few, if any, designers or jewelry manufacturers have the capital resources to mount such a costly advertising campaign. Moreover, most products aren’t sufficiently differentiated to gain awareness in the US market beyond a select few niche consumer groups, as these results demonstrate.
Just what DeBeers had in mind when they started their industry branding initiatives in 2001 has never been clear to me. But one thing is certain, the result has been a proliferation of obscure, mostly irrelevant names that clutter showcases with a menagerie signs, logos, and colors that have no meaning to consumers at all. Collectively, jewelry retailers have probably invested in excess of $100 million in advertising over the last 6 years to promote these names, often at the expense of their own retail store name. That's the opposite of how customers think; if this research is correct. Meanwhile, in the midst of all this brand confusion, DeBeers has managed to position its new retail brand in the ‘top 5’ with fewer than seven stores operating in the US today.
Lastly, this research emphasizes the power local and regional jewelry names continue to have with consumers. According the research, “57% of the respondents wrote the name of a local independent jeweler, regional chain, Web site, or brand [when asked], And what other jewelry brands or companies come to your mind next?” That suggests smaller jewelry businesses should position their store name as a leading jewelry brand in their community or region as opposed to a jeweler selling specific jewelry brands. The fact is most consumers don’t know these brands, but they do know the names of “Their Jeweler”.
Evidently, the store as a brand is what's “top of mind” from the consumers point of view. Incidentally, that's how it used to be and this research seems to say consumer thinking really hasn’t changed despite all the brand proliferation. However, along the way, it seems a lot of retail jewelers have lost sight of that fact; something they need to rediscover. Store name awareness as a leading jewelry brand is a powerful competitive advantage many small jewelers have failed to exploit. Now with second tier chains like Friedman’s and Whitehall going out of business and large chains like Zale in financial distress, independents and small chains have a unique opportunity to take the initiative and reconnect with their customers.
