The Jewelry Industry's Design Dilemma

Walk into many jewelry manufacturing plants around the world – perhaps even most – and you’ll see lowest-common-denominator design processes taking place.

You’ll encounter it in conference rooms, where retail buyers are reviewing the designs they saw at the jewelry show in Las Vegas, or Hong Kong, or Basel; asking if the manufacturing team can knock off their favorite looks from the exhibitions.

You’ll see it in offices, where a designer’s work is being picked apart by sales staff, who are suggesting that a few more diamonds on the halo, or down the shoulder, or a blackened metal, or a more pointy-tipped prong, are necessary; that these are the elements that seem to be selling in the market.

Then, the top sales guy takes the designs back to his desk and returns a day later with images pulled off a Google search, cut and taped together to demonstrate what he thinks they should be selling.

Here’s a simple rule about market value to consider: If all the products in the market are essentially the same, then the only thing any customer will care about is price. Once customers only care about price, the market starts bleeding value. What is left after this occurs? Simply the sum of the parts; in this case, the market value of the gemstones and precious metals. After that, returning the market to a state of added value is extremely painful, if not impossible.

What Happens When Innovation Disappears?

This isn’t even new news. The jewelry industry has been marching down this path for some time.

The results are showing in an independent retail segment that is struggling to compete with online sellers and non-traditional jewelry sellers. It is tempting to write off the struggles at jewelry retail as being the same as the struggles at all retail – and to a certain extent, they are – but to do so ignores a corollary problem. Walk into any jewelry store anywhere, and you are likely to see the same cases filled with solitaires, solitaires with halos, solitaires with double halos, diamond studs, and three-stone rings. Yes, there will always be demand for jewelry basics, but have we become too . . . well . . . basic? Consumers have been trained to expect that they will not see anything new or different at the jewelry store, so they do comparison research online and negotiate prices.

The jewelry industry has a jewelry manufacturing sector that does not innovate. Yes, there are pockets of innovation – you’ll see them profiled in this column in the coming weeks and months. But the dominant focus of the jewelry manufacturing sector has been to perfect the pumping-out of parts, the mechanization of what was hand work for nearly a millennium, and the reduction reduction reduction of labor costs. Which, when you consider it, should really make you scratch your head. When the item you are making consists of $700 worth of gold, $2,800 worth of gemstones, and $80 worth of labor (and this is before the U.S. started exporting jewelry jobs), how much can a company gain by focusing so much energy on lowering labor costs?

What are the Opportunities for Value Add?

Please don’t misunderstand. No manufacturer should spend more money on labor than necessary relative to their brand strategy, and working to improve efficiencies and reduce errors is extremely important work.

But is it possible that the jewelry industry threw all its eggs into the efficiency basket? Is it possible that it turned 100% of its attention to reducing production costs and increasing output, and in the process failed to attend to that other extremely important aspect of value add: Design?

At some level, the industry knows it’s lost something important. Retailers and manufacturers have attempted to focus attention on customer service as a differentiator. The problem with that is great customer service is now a minimum standard necessary to compete. Once something is expected, it no longer provides value add.

Thousands of companies around the world manufacture jewelry, both for their own distribution efforts and for other brands.  Yet a mere handful of jewelry brands ever achieve consumer recognition. Meanwhile, survey after survey reports that good design is a priority for Millennials - from clothing to electronics to kitchen accessories, design matters. Considering that this is the fastest-growing jewelry-buying demographic, the industry must take note.

So What About Design?

Design is a discipline, just like engineering, marketing, or accounting. Yes, starlets and trust-fund babies with cash to burn can decide to become jewelry designers, but just because one says it’s so doesn’t mean it is. There is a reason that Tiffany & Company jewelry is so appealing. Beyond the marketing and manufacturing machine, at the heart of the brand, are designers; people who study and practice the art of creating something functional, beautiful and balanced, something that pleases the eye and stimulates the senses like a perfect dish pleases the palette. Harry Winston didn’t become famous because he could get his hands on exquisite diamonds (though that didn’t hurt). It was his uncanny sense of how to design the setting around each diamond that set him apart. David Yurman has become a powerhouse partly because they created jewelry for the mass market without ever losing sight of the importance of design. Both David Yurman and his co-founder wife Sybil are practicing artists, and that sensibility is always in the forefront of the company they created.

Does the jewelry industry have a design problem? The jewelry industry needs to focus more on creating great design - agree or not?

None of this is to say there isn’t brilliant jewelry design for sale. The jewelry industry is filled with independent designers producing small lines, and that body of work is exceptional. The problem is that these designers rarely have the capital to make it to market. It’s next to impossible for them to penetrate jewelry retail, and going direct-to-consumer is prohibitively expensive (it's easy to build a Shopify site, but there's no guarantee that anyone will ever visit it). Most independent designers survive by selling to between 10-30 stores – hardly enough exposure to create a lasting consumer impression. If the manufacturers were smart, they would tap into this talent pool.

Creating a bias toward design is not an easy thing to do in organizations that have not thought this way before. It requires hiring experienced design talent and investing in the development of design teams. It means taking risks to create new looks, and not simply pandering to the most mainstream tastes. It means doing the hard work of defining collections and learning the art of merchandising. It means developing an understanding of the difference between good design and great design, or learning to trust someone to guide that part of the product development process.

Sustained, explicit focus on design would surely help create more differentiation in a sea of sameness. And that’s the kind of value add that consumers are willing to pay for.