Industry must connect to emotions to bring allure back to gold, say experts

To combat the increasing threat from luxury goods, gold and jewellery must be positioned as a single lifestyle category than by individual stones and metals, and must build strong emotional connects for consumers, industry analysts told conference attendees.

Philip Olden, Managing Director, Marketing & Jewellery for the World Gold Council, said the new approach is imperative. "The how and why of gold marketing needs to change to face up to increasing pressure from unexpected areas," Olden said. "Today more than ever before, we have to compete for discretionary income. We must increase consumer desirability by changing our marketing tack. Gold needs to have a relevant brand image, emotional connect, premium pricing and differentiation. We have not done this well enough."

The second day of the two-day City of Gold Conference focused on the marketing of gold and jewellery, an issue of increasing importance as its global and regional market share continues to be eroded by luxury lifestyle goods including designer apparel and goods, travel, electronics, spa treatments and investments.

Olden stressed the need for related product and retail innovation, staff training, modern retail environments and outreach based on factual consumer research rather than 'gut feel.' "Instead of indistinct, generic advertising, research shows that campaigns need to be about how jewellery makes women feel, not how it makes them look," he said. "It must make them feel cared for, pampered, receiving a premium product. Gold must represent emotion."

Countries that have implemented the World Gold Council recommendations have outperformed those where the Council is inactive, he added.

Establishing new emotional consumer connects is also a critical driver for the region's diamond industry, said Anan Fakhreddin, Director, Gulf Region for the Diamond Trading Company. Fakhreddin, the second speaker at the conference's special marketing session, announced the launch of the DTC's new bridal campaign to drive diamond sales in the region.

In Saudi Arabia alone, he added, the bridal diamond sector was valued at USD 400 million in 2006, with one in three brides opting for diamonds during the engagement/wedding process. Of the USD 400 million, diamond sets account for USD 290 million, with an average set costing USD 8,000. The remainder is spent on individual pieces, with an average price of USD 1,650.

Between 2002 and 2005, bridal acquisition rates dropped 14 per cent from 57 per cent of sales to 43 per cent, Fakhreddin added. The new campaign, titled 'The One for Life,' will position diamonds as the expression of eternal emotional commitment and make it as a cultural imperative. The campaign will roll out across media channels throughout the Gulf.

Tawhid Abdullah, Managing Director of the Dubai Gold and Jewellery Group, organizers of the conference, said the need for image building is a real and legitimate concern for the industry, and one that requires a concerted effort on an international level.

The 5th City of Gold Conference ends today at the Park Hyatt in Dubai.