New programs build on platinum's strengths, lead to greater profits

July 01, 2007

PGI Chief Executive Officer James Courage.

By James Courage

One of platinum's many strengths remains its clear positioning in the mind of the consumer as "the best." This positioning is reflected both in jewelry and in the many other uses of the word "platinum" to denote something that is at the top of its category.

Building on that in the jewelry sector is platinum's well-known and unique combination of physical properties, characteristics and associations—all of which continue to make it the primary choice for bridal jewelry in the United States, and the favorite metal choice for all jewelry in the two largest global markets for platinum: China and Japan.

The challenge for the trade has been to have faith in the fact that the consumer's strong desire for platinum—combined with proper product selection and sales information—will result in a more significant sale for the retailer. This challenge has become more difficult as a result of the price increases that have taken the metal beyond the more comfortable price points it used to occupy.

In turn, Platinum Guild International (PGI), both in the United States and internationally, has stepped up its activities to focus more tightly on the product itself, through programs such as "the 4Ps" in the United States. In addition, PGI USA is developing programs to promote innovative design and fabrication techniques that allow the weight of the individual platinum piece to be tailored to reflect less expensive price points.

In global markets, our efforts include a newly established wedding band program in China, where we are introducing the tradition of three rings to the market, and a very positively received launch in Japan of the "Thanks-Day Platinum" program, targeting the anniversary/retirement sector with a platinum and "diamond double anniversary ring" style.

In meeting with retailers at the Las Vegas jewelry shows, we underscored the "value" of the platinum sale to the retailer's business, outlining the opportunities for higher-ticket sales and greater profits available to those who choose suitable products for consumers and train sales associates to understand the consumer's desire for platinum rather than focus on recent increases in world prices.

In a tough climate, where unit sales are falling and the temptation to trade down is strong, the bridal platinum sale is even more important—a point cited by several retailers who said that without platinum, their sales numbers would suffer significantly.

In addition, since the margins that jewelers may gain on mountings surpass the margins on the gemstone itself, getting a balanced message out about the importance of the setting, while also reflecting the established role of the diamond, helps lead to long-term consumer satisfaction. Customers get the durability and the look of platinum as well as the feeling that they are getting what they really wanted. Finally, and importantly, all of this is giving more back to the retailer's bottom line.

PGI is supporting these initiatives in the trade with increased education and merchandising programs, together with valuable feedback from extensive mystery shopping programs. These initiatives can help retailers better understand how they can benefit their platinum sales, profit dollars and customer satisfaction.

The opportunity to link and expand an engagement sale into a three-ring bridal sale is also a strong PGI theme and one that clearly resonates with retailers and the trade overall. Consumer and trade strategies to help that theme develop, as well as the efforts of designers seeking to refine the traditionally heavier men's band into a distinctive but lighter-weight piece, is an additional element in PGI USA's arsenal of numerous support tools for the industry.