Silver jewelry sales in the U.S. saw a significant increase over the last year, according to a survey recently conducted for the Silver Institute’s Silver Promotion Service (SPS) in the United States. The average increase in 2013 for silver jewelry sales was 17%, findings from the survey showed. The Silver Promotion Service is the jewelry industry’s organization for silver, with a potential to become the "Amazon" for silver jewelry.
SPS Director Michael Barlerin discusses the latest trends and shares his vision for silver jewelry in an exclusive interview with Rough&Polished.
Please tell us about your background in the jewelry industry.
I am a marketing man who started his career in the advertising business, so I am one of the 'mad men' on the television program. I started my career at Doyle Dane Bernbach, which is a famous advertising agency from the 60s, and then progressed on the advertising and marketing side. The first time I got involved with the jewelry industry was when I joined Zale Corporation in 1980 as Senior Vice President of Marketing for the Zales Division (with 534 stores in 48 states– R&P), the first senior marketing executive the company had hired.
Then in the late 80s, I was asked to join the World Gold Council as the Chief Executive for the Americas. I spent approximately 15 years with the World Gold Council. During that time, I got to know the Washington-based Silver Institute.
It was early in 2008 that the Silver Institute called me and said "Michael, could you set up a smaller version of the World Gold Council for silver jewelry?" That spring the Silver Promotion Service was formed, and its first outreach to the industry was at the JCK show in New York that summer. We sent a team of people out to look for designers and manufacturers producing high-end, high-design component silver jewelry.
We launched the program to the industry in December of that year, which was the first time we introduced the Savor Silver website, the SilverMark and our ‘Designers of Distinction’. The organization is now going into its sixth year and is in the process of some fairly significant and strategic changes.
You participated in the JCK Show in Las Vegas in June. Could you share your key takeaways from the show?
The show was a good one. It was the third year that the show was moved from the Sands Convention Center to the Mandalay Bay. The Silver Promotion Service sponsored the press lounge at Mandalay Bay, and a fashion event, because twenty of our program participants had booths at JCK. We had each of the models wear jewelry from one of our members.
After the show, I sent emails out to all of them asking what their results were based on the show. The people who were primarily involved in silver had a very good show. The lowest percentage in sales that was given to me was up 12%. Another of the companies was up 36% over last year. One company that was relatively new to silver last year said they more than doubled their sales from the prior year and that reorders were very strong.
The one comment I would make, though, is that firms that had only recently moved into silver that were primary gold firms said that there had been a resurgence of their gold business. Silver was still strong, but if a company was known for its gold jewelry, they also did well.
All in all, JCK was good for silver. We were very pleased by the reaction to our participation and pleased by the feedback we have gotten to-date from our members.
How would you explain the success of the popular sterling silver jewelry brands, David Yurman, Pandora, and many others?
My sense is that the brands that have done well over the years have a very strong brand-consciousness. They know what their brand is about. They are aware of what the concept is that launched the brand, and they are very loyal to that brand. I have known David for many years. I think David's consistency over time is one of his greatest strengths. He blends exceptional design with a brand positioning and brand equity that he has been very loyal to.
I think starting with the right concept is key, modifying it as necessary is obviously appropriate, but then being consistent so you are not one thing one day and something else the next day.
Would you say that the Silver Promotion Service works as an industry-wide generic marketing initiative for silver, like De Beers for diamonds?
The answer to that is yes and no. I almost went to work for De Beers in the 80s, so I am familiar with their organization. The primary difference is De Beers owned the diamonds, so they were in effect promoting their sight holders, their customers.
The Silver Promotion Service is a little more comparable to the Platinum Guild International, or what the World Gold Council used to be when it was promoting jewelry, as opposed to its current primary focus on investment. If you think of us as the representatives for the silver jewelry industry, but not owning the product the way De Beers did, but promoting the product the way Platinum Guild does it, I think that is a better comparison.
Fine jewelry has faced increasing price resistance from the consumers. Many are not willing to spend thousands of dollars on diamond jewelry anymore, possible because they are more interested in the latest technology and gadgets. Do you think that the future of fashion jewelry belongs to silver or costume jewelry?
First of all, we don't think of silver jewelry as fashion jewelry. We think of it as fine jewelry. It may not be precious, in the sense the industry uses that term, but silver is a precious metal so we differentiate ourselves from fashion jewelry. I do think that silver is offering the retailer exceptional value that the fashion jewelry segment is not.
We often refer to silver jewelry as an affordable luxury because you can get an incredible look with high design component to it for a reasonable amount of money.
When we interview the designers who are part of our program, almost all of them talk about silver being the ultimate artisanal metal. It enables them to do things from a sculptural and design standpoint that other metals cannot give them the same opportunity.
We are seeing more and more silver jewelry set with diamonds. Of course, it is a wonderful look. Last year the fashion industry said white was the new color of the season. We did a section with the Rapaport Report about white metal, white gems and the importance of that look. That is a crossover between plain silver jewelry and precious jewelry because it involves diamonds. We do not see silver as the metal for engagement rings. That is an area we have not explored, but I have a feeling that is probably a platinum and gold arena.
Do you think the traditional retail jewelry stores should consider offering more silver jewelry alongside their diamonds, gold, and pearls?
That is a complex question because a jewelry store has several measures that make it more successful than another. It has to do with traffic. It has to do with sales conversion. It has to do with turnover and it has to do with margin. We believe that silver, based on the research we have done with Nielsen, performs very well on almost all of those measures.
First of all, it's the ultimate female self-purchase product. More women will come in, whether they have had a good week or a bad week and treat themselves with a piece of silver jewelry, than most of the other categories, if not all of the other categories.
In addition, research has shown that white metals are preferred by the younger customers, so you are building a customer base for the future when you start out a graduate or a bridal party with silver jewelry.
Last thing, I think most importantly, in the five surveys we have done over the last years, in addition to fast turnover, increasingly high price points, silver has given the retailer the best maintained margin, by far, over all the other jewelry categories.
What marketing campaigns are you doing at the moment or planning to launch in the future to stimulate demand for silver jewelry?
We anticipate announcing a new working relationship with a leading Internet e-commerce site in the industry. There is a company in New York called OPT. They have a large number of brands and about 1200 retailers who are part of their program. One of our moves is to both increase the number of people who are part of our Savor Silver program and to provide them a transactional platform for silver. We will soon be launching that.
We just previewed it at the Luxury Privé show in New York. Hopefully, we will have it up and live this fall. The Silver Promotion Service can and should become the "Amazon" for silver jewelry. One of our goals is to broaden our base and increase the functionality of our website to make silver jewelry more readily accessible for more consumers.
Olga Patseva, Editor in Chief of the American Bureau, Rough&Polished
