Cue the trumpets: Sterling silver jewelry is hereby recognized as a viable and dynamic jewelry category by the "Main Street" jewelry store owner, as indicated by numerous reports, including some right here in National Jeweler, according to www.nationaljewelernetwork.com.
But wait a minute: Is this sterling surge really anything new? Numerous jewelry retail channels have already long recognized silver jewelry for what it is: beautiful, creative and especially profitable.
Take Tiffany and Co., for example, which over the years has become a retail channel unto itself. Its skilled management team pioneered silver styling, and silver jewelry has become a strong if not major part of the retailer's product mix. How big a part is, of course, a carefully guarded trade secret, but it's clear that Tiffany executives have been doing their silver jewelry homework for decades--and they're not alone.
Consider also major department stores, where sterling silver jewelry has become a staple thanks to popular designer brands, such as Judith Jack's "Victorian look" silver jewelry at Macy's, for example. In such stores, silver jewelry has become an important showcase profit center.
Big TV shopping networks, such as QVC and HSN, are onto silver, too, and have a wonderful eye for combining gemstones such as Malaysian jade, lapis lazuli, charoite, blue lace agate and even hand-carved stones--the list is endless--with silver.
Ritani, a QVC regular known for its 18-karat and platinum designs, has just introduced a silver jewelry collection that features simulated diamonds. Meanwhile, HSN has been selling silver jewelry for almost as long as it has been in business.
Consider, also, the direct sales, or home party retail channel, made famous by companies such as Tupperware and Avon. Parties for books, soap, ladies underwear and more have seen sales easily totaling $30 billion, according to a 2007 Direct Selling Association estimate.
Several companies with representatives who are selling silver jewelry in the consumer's living room have combined sales of an estimated $154 million. (The sales leader is Silpada Designs but new players, such as Inspiranza Design and Morgan Dane Designs are not far behind.)
And then there are all the miscellaneous silver jewelry importers found on urban streets and at mall- and airport-based silver jewelry kiosks, such as Tasco Silver. It would take a magician to unravel the sales volume of these channels, but it is easily in the millions of dollars.
Where did I find all this information, you ask? For almost seven years, I owned a very successful silver jewelry brand. (I sold it a couple of years ago.) I designed for the brand and imported finished goods from manufacturers in Hong Kong, India, China, Thailand, Italy, Indonesia, Mexico, Africa and Canada.
I've acquired an understanding of silver jewelry marketing, sourcing, merchandising and pricing, plus--dare I say it?--a strong bias to silver jewelry.
To be fair, I also owned a large karat gold jewelry manufacturer before it ran into the rather unpleasant Reagan-era recession, as it were. There were no stimulus packages in those days.
I thought it might be interesting to look under the hood and compare the retailing of karat gold jewelry to the retailing of silver jewelry. Some of the contrasts may surprise you.
Gold vs. silver: Target customers
Karat gold jewelry: With the price of gold hovering above $1,200 per ounce at times over the past year, the gold component has a major affect on retail price. Obviously, the target customers are, frankly, self-purchasing women (likely on the older end of the age spectrum) with a higher disposable income.
Sterling silver jewelry: It is no surprise that silver jewelry appeals, in general terms, to the younger consumer. Just walk into a high school or attend a wedding party (chain-link bracelet, disk dangle, silver neck-chain anyone?) and it's obvious that silver jewelry is a staple. There are exceptions, of course. On occasion, a special silver jewelry brand bridges the gap between target consumers. Kelim Jewelry Designs comes to mind.
Gold vs. silver: Pricing
Karat gold jewelry: Since the price of gold has increased, so has the cost of making 10-karat, 14-karat and 18-karat gold jewelry, and margins have to be constrained or retail prices will hurt sales. Keystone is the margin in this category. Obviously, design is important, too, since there is a need to limit gold content.
Sterling silver jewelry: Although the cost of silver has also run up (silver is now about $17 per ounce), it is still inexpensive enough to allow for larger and creative designs. Generally, there is room to allow designs to carry the larger, beautiful colored gemstones. Margins can still be as high as four to five times manufacturers' cost.
Gold vs. silver: In-store selling
Karat gold jewelry: Briefly, and in general terms, the customer's purchase of a gold item can be a hand-wringing, time-consuming and emotion-filled experience. (Uncle Harry, where are you?) Whether its price, gold or concept-related, the consumer's decision-making process is profound.
Sterling silver jewelry: In general terms, the consumer's purchase of a silver design is usually on impulse. Gone are the days of wondering if a silver bracelet will turn a wrist green or if an earring will make someone sick. Silver manufacturers have solved these problems through improved alloys and product plating.
One last thought: It should only be a matter of time before watch companies offer silver watches.
