Skewed Perceptions: $550,00 For A Cartoon, 70% Discounts For Jewellery

GemKonnect

Skewed Perceptions: $550,00 For A Cartoon, 70% Discounts For Jewellery

Vinod Kuriyan 11/23/2015

The perception of value isn’t simply a matrix of rarity, beauty and high price. It is in fact, one of those undefinable issues.The jewellery retail industry doesn’t seem to know what it is right now. Cartoon collectors on the other hand, seem very sure about what value is. And they’re willing to put their money down on their perceptions.

Would you, for instance, pay half a million dollars for an original cartoon drawing? Particularly one that has major issues such as stereotypical racial perception and the promotion of big game hunting among other things? The asking price for an original plate of Tintin Au Congo, the original French version of Tintin In The Congo, by Belgian cartoonist Georges Remis who wrote under the pen name Hergé, is $550,000.

The artwork from the cartoon featuring the boy-adventurer Tintin has a very good chance of realising its asking price. A double-page strip from the Tintin adventure King Ottokar's Sceptre sold for $1.7 million last month at Sotheby's in Paris. The previous year, the original art for Tintin and the Shooting Star set a record when it sold for almost $3 million at the Brussels Antique Fair.

Meanwhile, US retailers are loudly promoting 70 percent discounts for jewellery over the holiday season. It’s almost as if they don’t really believe in the value of their own product.

You can’t really blame them. The middle of the gem and jewellery production pipeline doesn’t seem to have any idea of the value of its product either. While scarcity or rarity does, in a strict economic sense, increase the value of a product or commodity, these two things alone do nothing to make the consumer want to buy something.

De Beers understood this and positioned diamonds as the symbol of a relationship between a man and a woman. It no longer runs its famous global promotions. Surprisingly, along with all the other diamond mining firms, it actually pushed the argument that diamond prices would automatically increase as mine output declined and product scarcity kicked in.

Consumers, who have a range of other luxury products and services to choose from, haven’t bought into that line of reasoning. Many in the industry seem surprised at learning what they should have known well — a diamond is only worth as much as a consumer is willing to pay for it. So now retailers have been reduced to offering 70 percent discounts to sell jewellery over the holiday season.

What is key is that the retailers who are offering these large discounts are major chain operators who sell a variety of products. Jewellery is just one of them. If it takes a 70 percent discount to get rid of jewellery that will otherwise simply sit on their shelves as dead stock, they are naturally not going to hesitate.

Multi-segment retailers are the biggest sellers of jewellery. Specialty jewellery retailers are and endangered species. The question is, will the multi-segment retailers want as much jewellery when they start restocking after the holidays? What will their assessment of jewellery as a product category in general be?

Industry pundits have expounded at length about how the very perception of luxury is now very different to what it used to be. It is now not at all linked to price but instead to the experiential component that the product or service delivers and as to whether or not it helps the acquirer make some sort of personal statement.

“I got this at a bargain” isn’t the sort of statement the industry wants. That, in fact, devalues the very idea of a “precious” material to begin with.

Some mid price brands like Pandora, — who offer a large variety of product in what is being described as the “hundreds and not thousands” price band — seem to have understood what that perception of value is. Their designs start with a target price and are aimed primarily at the self-purchase market, which has a much clearer definition of perceived value than the fuzzy, upper-price-band gifting segment.

Products in the mid-price section transmit value by offering design as a personal statement combined with high quality that ensures that the product will endure and not fall apart like the “cheap and cheerful” lower end products.

The mid segment does use lower-cost diamonds and while its products might not at some later date get to the $500,000 level in a collector’s market, they will, nonetheless be something that a mother might want to pass on to her daughter as a favoured everyday style statement.

Consumers in today’s fast-changing, technology-driven world get the idea of “enduring value” much better than a fuzzy idea of “forever”.