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

Elise & Amy Greenberg
IndependentsOct 15, 2026
Retailer Hall of Fame 2026: Amy and Elise Greenberg

For 40 years, sisters Amy and Elise Greenberg have helmed their 126-year-old family business, leading with appreciation and integrity.

The Retail Smiths Principal Partner Peter Smith
ColumnistsOct 15, 2026
Peter Smith: What Is the Culture REP?

It’s a term Smith coined and felt compelled to share following a bad experience with an aborted flight and an unfeeling flight attendant.

Stephanie Gottlieb Movado watches
WatchesOct 15, 2026
Stephanie Gottlieb’s New Movado Watches Are Made for Your Wrist Stack

Movado teamed up with the New York-based fine jewelry designer on a new collection of Movado Museum Velura watches.

1872 x 1052 Gemolite.jpg
Brought to you by
Meet Gemology’s Next Generation Microscope: GIA® Gemolite® NXT Professional Edition

Experience gemstones with greater precision and comfort than ever before.

Polished diamond in tweezers
SourcingOct 15, 2026
Signet Jewelers, Richemont May Join Bidder for De Beers, Report Says

The two companies are reportedly in talks to join the Global Diamond Consortium, led by former De Beers CEO Gareth Penny, as per Bloomberg.

Weekly QuizOct 08, 2026
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Wolf x Marla Aaron Some of the Things Box
CollectionsOct 15, 2026
Wolf x Marla Aaron's New Jewelry Box Is for Some (Not All) of Your Things

The “Some of the Things” box follows the two larger “Everything” box designs with the look and function of antique sewing and toolboxes.

Coleman Clark and Mitchell Clark
IndependentsOct 14, 2026
Retailer Hall of Fame 2026: Coleman and Mitchell Clark

Fourth-generation jewelers Coleman and Mitchell Clark exemplify the best qualities of their predecessors: humility, modesty, and confidence.

Cover.jpg
Brought to you by
Your Piece Could Be the One Editors Talk About

Submit your pieces for a chance to win in this year's competition.

Manual Marcial de Gomar
SourcingOct 14, 2026
Manuel Marcial de Gomar, ‘The Emerald Whisperer,’ Dies at 90

The gem hunter, whose 70-year career was defined by adventure and exploration, is remembered for his steadfast faith and sense of wonder.

Tiffany & Co.’s Blue Box Café by Daniel Boulud at South Coast Plaza
FinancialsOct 14, 2026
LVMH’s Jewelry Brands Turn in ‘Very Good’ Performance in Q3

Tiffany & Co. continued its full-scale store renovation project while Bulgari’s high jewelry collection generated “record-breaking revenue.”

Chicago Responsible Jewelry Conference 2026 Graphic
Events & AwardsOct 14, 2026
Chicago Responsible Jewelry Conference Releases 2026 Program

This year’s sessions feature leading voices from human rights, legal, and conservation organizations.

Lugano Diamonds Greenwich Connecticut store
MajorsOct 13, 2026
David Webb Owner Purchases Lugano Jewelry

The high-end jewelry retailer was sold to private investment firm Middle West Partners and a group of longtime clients.

Stephanie Gottlieb Wholesale Lab-Grown Collection
Lab-GrownOct 13, 2026
Stephanie Gottlieb Takes Lab-Grown Diamond Collection Wholesale

The jewelry designer has partnered with Sofer Jewelry to distribute her 85-piece lab-grown diamond collection.

Sean Dunn
IndependentsOct 13, 2026
Retailer Hall of Fame 2026: Sean Dunn

Dunn, this year’s Single-Store Independent inductee, is passionate about innovation and telling the story of natural diamonds.

Bulgari pink diamond
AuctionsOct 13, 2026
Christie's Geneva To Auction 'Bulgari Pink' Diamond

The 24-carat fancy intense pink diamond ring could fetch up to $18 million at the November sale.

Greenwich St. Jewelers Island Jewel candle
IndependentsOct 13, 2026
Greenwich St. Jewelers’ New Candle Smells Like Home

The “Island Jewel” candle honors New York City and Puerto Rico and raises money for the island’s water relief efforts.

TechnologyOct 13, 2026
GemFind Is a New JA Member Benefit Partner

The partnership will give JA members access to preferred pricing, exclusive benefits, technology solutions, education, and resources.

Stock image of a person holding holidays bags
SurveysOct 09, 2026
These Will Be the 10 Busiest Days for In-Store Shopping This Holiday Season

Stores should expect to see the most customers on Nov. 27, and Christmas week is expected to be hectic too, as Dec. 25 falls on a Friday.

Elisa Solomon x Serendipity 3 Frozen Hot Chocolate Charm
CollectionsOct 09, 2026
Elisa Solomon Collabs With Serendipity 3 on ‘Frozen Hot Chocolate’ Charm

The charm, our Piece of the Week, features brown diamond frozen hot chocolate topped with white diamond whipped cream and a ruby straw.

8 carat fancy blue diamond
AuctionsOct 09, 2026
8-Carat Blue Diamond Goes Unsold at UK Jewelry Auction

The top lot of Elmwood’s recent fine jewelry sale in London was a 1.84-carat, D color Tiffany & Co. solitaire diamond ring.

Ebel sport classic watch
WatchesOct 09, 2026
Movado to Sell Majority Stake in Ebel for $66.5M

The watch company agreed to sell a 95 percent interest to a group comprised of F.P. Journe, Chanel, and Swiss watch exec Pierre Jacques.

Stock image of paper money and coins
Policies & IssuesOct 08, 2026
Third Wave of IEEPA Tariff Refunds Begins

This round of tariff refunds is for importers that have sued over IEEPA tariffs in the Court of International Trade and won.

Brent Neale Back to Basics Collection Pink Garnet Capsule
CollectionsOct 08, 2026
Brent Neale’s New Collection Goes ‘Back to Basics’

It revisits the brand’s most requested silhouettes, from "Pillow"-set necklaces and bracelets to "Signature"-set rings and earrings.

Ethical Gem Fair Brooklyn
SourcingOct 08, 2026
Ethical Gem Fair Heads Back to Brooklyn

The trade-only event includes buying opportunities as well as educational sessions on artisanal mining, the new Paraíba source, and more.

Ara Chanakian Overall Design Winner
Events & AwardsOct 08, 2026
Pattons Fine Jewelry Sweeps Local Design Contest

Ara Chanakian, a jeweler at Pattons, took home top honors in every category at Jewelers of Louisiana’s annual jewelry design competition.

Reba McEntire belt buckle
AuctionsOct 08, 2026
Reba McEntire’s Jewelry, Watches Head to Julien’s Auctions

The live charity benefit sale in Nashville will also feature gowns, boots, and other memorabilia from the country music legend.

overnght sb 1026.png
Supplier BulletinOct 08, 2026
Overnight Mountings’ Bridal Builder Helps Jewelers Turn Custom Design into a Hands-On Selling Experience

Sponsored by Overnight Mountings

×

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