Other

5 modern forces that shaped the jewelry industry

OtherDec 17, 2014

5 modern forces that shaped the jewelry industry

 In part one of a two-part series, columnist Jan Brassem examines the first two of the five factors he says disrupted and transformed the jewelry industry over the past 35 years. 

Brassem-article.jpg
Jan Brassem is a senior partner at MainBrace Global Partners, a global jewelry advisory and & firm with offices in New York and Hong Kong. You can e-mail him at Jan@MainBraceGlobalPartners.com.

Since I got my start the gold jewelry industry about 37 years ago, I’ve found myself in the unique position to take a look back--through a rearview mirror, so to speak--to see how our industry has changed over all these years.

After returning from military service and earning a business school degree, I acquired a gold jewelry (mostly rings) manufacturing company. Fortunately for me since I was a novice, the firm employed about 250 experienced managers and skilled craftsmen.

Computers were a novelty then, as they wouldn’t really arrive for another two or three years. We operated manually--no email, no computer-aided work flow nor EDI. Little had changed since the end of World War II, or so it seemed.

We purchased gold castings and genuine stones/diamonds and supplied finishing labor, namely grinding, stone setting and final polishing. Those type of firms were called jewelry contractors in those days.

When all was said and done, we ended with a line of 4,000-plus styles. Using this as a sample line, we took orders from large jewelry retailers, catalog showrooms, wholesalers and other volume users. It was a nicely profitable, price-driven, low-end, word-of-mouth “brand.” To be sure, several competitors used the same operating model.

The firm shipped about 9,000 units a month, few styles costing more than $50. For example, one popular style, targeting teenagers, was a solid, 10-karat gold ring set with a one-point diamond, having a total manufactured cost around $15. We manufactured thousands of these “teen rings,” and our customers sold them for around $30 each. The low-end fine jewelry, sometimes called mass merchandise channel, was robust then.

We, our competitors and many industry leaders, did not foresee the rather unpleasant economic changes that were about to fundamentally and permanently transform the jewelry industry. As William Bridges argues in his bestselling book Managing Transitions (Da Capo Press, 2003), changes that could--and did--wipe out traditional companies only a couple of decades ago are managed more effectively today. More on this later.

Using education, experience and the prism of time, let me briefly summarize five unique industry dynamics (there are more, of course) that, in my view, disrupted and then transformed the U.S. jewelry industry from what it was in my “good old days” to what it is today.

These dynamics--some good, some bad--should give you a pretty good idea of what external forces, timing, management and who

knows what else, collaborated over time to restructure an entire U.S. industry.

More to the point, however, will your firm skillfully navigate through future unanticipated transitions, or will the changes create the organizational equivalent of a train wreck?

1. The mushrooming gold price
In 1971, President Richard Nixon “closed the gold window” so that foreign governments could no longer redeem their U.S. dollars for gold. From that time on, the price of gold would “float” and be based on the law of supply and demand. By the late 1970s the average price of gold already was around $200 an ounce, up from $44 an ounce in 1972.  

As the price of gold quickly rose to $250 an ounce it became a challenge to maintain the important $25 retail price point. When gold reached $300 an ounce it became almost impossible.  

In those days, gold represented 20 to 30 percent of an item’s manufactured cost, labor and stones made up the rest. Assuming a retailer’s keystone (100 percent) markup, and their important low-end $25 maximum retail price, it’s no surprise, of course, that the low-end jewelry segment would change when the price of gold started on its inexorable path.

We even looked overseas for merchandise since Asia’s lower labor cost could compensate, or so it was thought, for the higher gold price. That plan was abandoned when gold topped out at $850 an ounce in 1980.

We made the rather unpleasant decision to close our doors when the Reagan-era recession added insult to injury. We were out of life boats.

So retailers went to Plan B, and gradually developed a fondness for silver jewelry with innovative designer styling, consumer acceptance and a “reasonable” cost. Silver jewelry filled the void left by low-end gold jewelry and fit nicely in many showcases.

Over the years, with the price of gold going up and down, the jewelry retailer sagaciously adjusted his product offering and found his footing.

Consumers, in general, now seek fashionable designer brands, particularly in yellow gold.  

When all is said and done, the future of the jewelry industry, at least where gold is concerned, is starting to look rosy again, or at least rosier. After years of concern and confusion, happy days could be here. More on this later.

2. Technological un-sophistication
It is unclear to me why the jewelry industry has not kept pace with the technological revolution.

For example, with an abundant amount of tech products and accessories to complement them on the market (tablet computers, laptops, smart phones and watches, etc.), why aren’t some of these also sold in jewelry stores? With the increase of disposable income, jewelry stores seem to be a natural distribution channel, especially to the tech-loving youth market.  
I called few technologically advanced friends from Microsoft, Stanford, Harvard and NYU along with a pair of clever marketing geeks from a local high school. I was confident they could shed some light on blending technology with jewelry without altering jewelry’s natural beauty.

After spending a few days thinking about practical technological applications (PTA), the team presented some very preliminary, yet quite innovative, concepts. They’ve found a footing.

-- Micro engineering. It is quite simple to apply micro-engineering principles to jewelry so a pendant, watch, earring, ring, brooch, etc. can change color, look or even character without anything having to come off. A small movement, like watch movements, are virtually invisible and are simple to use. Without getting too technical here, all that is needed is a strategically placed mechanical bearing so a watch, for example, can have a watch face on one side and a lapis stone on the back side. Additional costs are negligible. The Eclipse brand successfully pioneered this concept in silver.

-- iPod technology. iPod technology is becoming smaller and smaller. The largest part of an iPod Nano is, of course, the case. The team estimates that a medium-sized pendant, particularly a locket, could be designed so an iPod Nano can fit inside the locket. The locket’s chain will act as the wire with subtle extensions for ear plugs.   

-- GPS/camera tracking. It is only a matter of time before GPS miniaturization will allow expensive jewelry, especially pieces with laser-engraved diamonds, to be tracked. The small GPS systems are not on the market yet, but the team estimates they will be in a year or so.

-- PTA miniature applications that haven’t been developed yet. The team reported that cameras, speakers, recorders and the like could be integrated into jewelry; if not now, then in the near future. The jewelry designer can simply work with technology-trained innovators to create techno-pioneering designs.

A good example is Galatea, which has developed the Momento pearl jewelry brand that contains an embedded chip that uses near field communication (NFC) technology. The wearer can record messages that later can be played on mobile devices.

All of these technological developments need an important ingredient for stardom, says Harvard’s Jim Gilliam, namely a loud voice and a kumbaya product.

I don’t necessarily agree. Truth be told, of course, any pioneering product usually needs a persuasive “rainmaker,” a company who bangs their drum the loudest. But it’s clear to me when it comes to risk- taking, innovation always trump noise.

Did I hear that Apple Inc. is quietly looking for salesmen to sell their smartwatch to jewelry stores? A perfect example of innovation over noise.

Please stay tuned for my three remaining factors.
Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

The Latest

Macy’s New York City Herald Square flagship
FinancialsMar 20, 2026
Macy’s Turnaround Plans Shows Promise, Boosted by Bloomingdale’s

Plus, why Saks Global’s bankruptcy may have given Bloomingdale’s an edge.

Jwaneng Diamond
AuctionsMar 20, 2026
Sotheby's, De Beers Unveil ‘Jwaneng 28.88’ Diamond

The flawless, Type IIa stone is estimated to achieve up to $2.8 million at the auction house’s high jewelry sale in April.

Tiffany & Co.’s Three Jean Schlumberger for Tiffany & Co. Archives Brooches
TrendsMar 20, 2026
‘Frankenstein’ Costume Designer Is Bejeweled In Brooches for Oscars Win

Costume designer Kate Hawley wore three archival Tiffany & Co. brooches, our Pieces of the Week, while accepting her first Oscar.

GIA iD100®
Brought to you by
Protect Your Customers and Your Business

You deserve to know what you are selling–to protect your customers as well as your business and your reputation.

Women wearing Zales jewelry
FinancialsMar 19, 2026
Signet Jewelers to Close 100 Stores, Shutter James Allen Banner

The jewelry retailer announced changes to its store network and brand portfolio during its fourth-quarter earnings call.

Weekly QuizMar 19, 2026
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Hand holding shopping bags
SurveysMar 19, 2026
NRF Forecasts 4% Retail Sales Growth in 2026

From a weaker labor market to inflation, NRF Chief Economist Mark Mathews gave insight on what retailers can expect this year.

26.36 carat round brilliant cut white diamond
AuctionsMar 19, 2026
26-Carat Diamond Tops $1M at Auction

The historic stone, which sold at Elmwood’s in London, is the largest white diamond to be offered on the U.K. market in more than a decade.

TopImageCrop.jpg
Brought to you by
Is This You? Every Jeweler Has This Problem; We Have the Solution.

Every jeweler faces the same challenge: helping customers protect what they love. Here’s the solution designed for today’s jewelry business.

JCK Rocks Nelly Graphic
Events & AwardsMar 19, 2026
JCK Rocks To Ride With Nelly

Three-time Grammy award-winning artist Nelly is set to perform at the annual event at Tao Beach in Las Vegas on May 31.

Lady Wardington and diamond-clip brooch
AuctionsMar 18, 2026
Collection of the ‘Severely Beautiful’ Lady Wardington Fetches $161K

The model and fashion editor’s gold evening bags were the top lots at the London sale, going for more than $25,000 each.

My Next Question Episode 3 guest Johnny Nelson
PodcastsMar 18, 2026
Episode 3: An Interview With Jewelry Designer Johnny Nelson

Fresh off winning the David Yurman Gem Awards Grant, Nelson discusses the ring that launched his career and his plans for the future.

Lucara blue diamond
SourcingMar 18, 2026
Lucara Recovers Nearly 37-Carat Blue Diamond

The “stunning” Type IIb stone was found via x-ray technology at its Karowe mine in Botswana.

Stuller The Basics of Jewelry
MajorsMar 18, 2026
Stuller Releases New Edition of Jewelry Education Book

“The Basics of Jewelry” has been updated to include modern topics and visuals.

Mark and Candy Udell on stage at the 2026 Gem Awards
Events & AwardsMar 17, 2026
The Best Moments From the 2026 Gem Awards

Held just before the Oscars, the jewelry industry’s big awards show had its share of standout jewelry, gowns, and acceptance speeches.

Winter Tourmaline
SourcingMar 17, 2026
Cruzeiro Mine Debuts ‘Winter Tourmaline’

The Brazilian mine’s new collection features cabochons in soft, muted shades like silver and lilac.

Natalie Portman in Tiffany & Co. Jewelry
TrendsMar 17, 2026
Natalie Portman Is Tiffany & Co.’s New Ambassador

The Academy Award-winning actress stars in Tiffany & Co.’s latest commercial, which debuted Sunday night during the Oscars.

Jean-Marc Duplaix
MajorsMar 17, 2026
Kering Establishes Jewelry Division, Appoints CEO

The organizational change follows Kering’s promise of a transformation after declining sales in 2025.

Anne Hathaway and Rose Byrne
EditorsMar 16, 2026
2026 Oscars Jewelry: One Necklace After Another

Natalie Francisco rounds up the top Oscars jewels, including Rose Byrne’s Taffin necklace with a more than 20-carat yellow-brown diamond.

Tag Heuer CEO Béatrice Goasglas
WatchesMar 16, 2026
TAG Heuer Has a New CEO

Béatrice Goasglas has been with TAG Heuer since 2018. She is the first woman to head the 166-year-old, LVMH-owned watch brand.

Ben Bridge Jeweler Honolulu boutique
IndependentsMar 16, 2026
Ben Bridge Debuts New Honolulu Boutique

The store features the first in-store build for the jeweler’s in-house “Bella Ponte” bridal brand.

Bonhams fine jewelry Paris
AuctionsMar 16, 2026
Bonhams Paris To Offer Antique, Signed Jewels

The live fine jewelry auction will take place later this week, showcasing antique pieces, rare gemstones, and signed jewels.

Silvia Furmanovich Horse Mane Earrings, Cece Jewellery Underworld Triptych Necklace, Almasika Invictus Flower Brooch
CollectionsMar 13, 2026
A Trio of Jewels from the 3 Gem Award Nominees for Jewelry Design

Our Pieces of the Week honor the 2026 nominees for the Gem Award for Jewelry Design, Silvia Furmanovich, Cece Fein-Hughes, and Catherine Sarr.

Vera Wang
WatchesMar 13, 2026
Citizen, Vera Wang to Launch Watch Collection

The 24-piece watch collection is set to debut in spring 2027.

Andrea Pooler
SourcingMar 13, 2026
Andrea Pooler Joins Third-Generation Diamond Company as COO

Pooler, who has more than 25 years’ experience in jewelry, is now chief operating officer of Modani Jewels, Soham Diamonds, and SNJ Creations.

24 Karat Club banquet
MajorsMar 13, 2026
24 Karat Club of New York’s Banquet to Return to Waldorf Astoria

The reopening of the Waldorf Astoria means a homecoming for the industry group’s annual event, which will take place Saturday.

Zoë Kravitz in Jessica McCormack’s Planetary Necklace
CollectionsMar 12, 2026
Jessica McCormack Sends Gold, Gemstones Into ‘Orbit’

McCormack looked to the 19th century’s “golden age” of astronomy when designing her new celestial-themed collection.

Johnny Nelson Wins David Yurman Gem Award Grant Graphic
Events & AwardsMar 12, 2026
Johnny Nelson Wins David Yurman Gem Awards Grant

Nelson will be honored as the inaugural grant winner at the Gem Awards gala on Friday.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy