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A Passion for Gold:
Realising Potential in the Gold Market
Consumer Research Summary
www.gold.org
title: subtitle
A Passion for Gold:
Realising Potential in the Gold Market
Consumer Research Summary
passion
attitudes
Contents
Foreword 04
Overview 05
Fast Facts 06
About the Research Programme 07
Our Strategy 08
Key Findings 09
Impact of Findings 15
‘Voices of the world’ 16
Results 18
Research & Statistical Methods 19
3
Foreword
As the marketing organisation for the This document outlines key findings of the World
Gold Council’s 2005 consumer research project. The
global gold market, the World Gold research is based on over 9,000 interviews in six key
gold jewellery markets: China; India; Italy; Saudi
Council’s primary objective is to drive
Arabia; Turkey and the USA. The WGC has seen
the demand for gold in all its forms. significant positive changes in consumers’ attitudes
and purchasing behaviours towards gold jewellery
With jewellery demand accounting over the past three years, and these have been
for around 70% of total consumption, instrumental in driving increased demand. In
territories where the WGC has conducted
this is a very important segment for promotional campaigns, we have successfully turned
around gold’s erosion of market share and value,
the WGC to focus its marketing which was being lost to competition in both the
activity on. Understanding the jewellery sector and other luxury goods and services.
Gold jewellery demand in 2005 was the highest ever
consumer and her attitudes towards in value terms, at around $39 billion at primary cost
gold jewellery is therefore of gold, making it one of the biggest brands globally.
fundamental to the WGC’s marketing Our marketing programmes are built on a foundation
of understanding consumer attitudes and behaviours,
of gold. Together with our partners, enabling the gold industry to reinvigorate the
we have implemented a programme marketing of gold jewellery and change it from a
commoditised category into a dynamic and desirable
to develop both marketing strategies lifestyle product.
and business plans that are
The gold jewellery market is forever evolving and the
transforming the gold jewellery WGC recognises the importance of identifying both
new consumers, as well as the changing tastes of
market. established target markets. To ensure that both the
WGC and our partners’ marketing strategies are built
on factual insights, we commissioned extensive
consumer research in our key target markets.
Our research programmes have helped us understand
the role gold jewellery can and does play in the lives
of consumers and their motivation for buying gold.
The research has proven to be a very valuable tool to
the World Gold Council; helping us to establish
stronger, more relevant marketing programmes and
helping World Gold Council partners to target “prime
prospect” consumers. The factually based research is
core to the World Gold Council’s jewellery marketing
programme and whilst we will continue to develop
the research further it will remain the foundation of
our marketing business plan.
4
desire
The World Gold Council’s latest global study into
consumer attitudes towards gold jewellery explores
in depth both consumer relationships with gold
jewellery and consumer usage of gold jewellery, as
well as women's attitudes towards life and how they
spend their time. This brochure outlines some of
the key findings of the survey.
Overview
attitudes
Gold jewellery is perceived to be an
integral part of a woman’s
appearance. Our research showed
that gold jewellery is considered by
the majority of the consumer
segments to be a necessary item
rather than just an accessory –
women derive strong emotional
benefits from wearing gold jewellery,
it is believed to complete a woman’s
appearance.
The study identified that there have been key
changes in consumer attitudes to gold and the role
it can play in their lives. There has been a definite
increase in the desire to own gold.
With their lives becoming increasingly hectic and
demanding, women are seeking to balance stress
and routine by benefiting from the rich emotional
rewards gained from activities such as shopping,
socialising with friends, self purchased treats/rewards,
working out of the home and freedom of self
expression. These activities are growing everywhere,
particularly in the East, and provide powerful
opportunities for the marketing and design of
jewellery to cater for these changing routines.
5
Fast Facts: Key Indicators
World Gold Council research In the majority of core markets, the purchase of
gold jewellery has increased since 2002.
identified a number of attitudinal and Interestingly the greatest increase in demand has
been from women buying gold for themselves,
socio-economic changes amongst
which ties in with the changing characteristics of
gold’s core target groups. Below we modern day women who are becoming
increasingly independent. Women are no longer
highlight some key findings from the waiting to be given gold, although that still
research: remains highly desirable and pleasurable. Gold as
a gift still has a strong presence. Gold is
everlasting and ideally suited to many diverse
Among gold’s core target groups there has been occasions. For women, gold maintains its lifelong
a significant increase since 2002 in the number of appeal and value.
women who fall into this category. In just four
key markets alone we have seen an estimated The main barrier to buying gold remains
increase of 56 million women. Overall, this totals perceived affordability in women’s minds: “Can I
some 150 million women in these markets. This justify that gold bracelet; or shall I buy that
increase is a result of a combination of macro- second pair of shoes; or that new handbag?”
economic factors such as higher disposable However, as global wealth increases, particularly in
incomes, but also importantly, positive shifts in core developing markets, so the affordability
consumer attitudes and behaviours, with gold barrier has decreased, allowing women to indulge
becoming a more relevant and desirable product themselves.
to a large number of women.
The intrinsic value of gold jewellery is recognised
Despite increasing competition from other across all markets, including the USA, where a
consumer goods, gold jewellery remains a highly large proportion of women agree that gold is as
desirable item for women and has increased in much of an investment as it is a fashion item.
desirability since 2002. This not only adds to the desirability of gold
jewellery but provides a rationalisation for
Gold jewellery plays an important and regular purchase, reinforced by the rise in the gold price
part in women looking good; serving to enhance over the past three years. It is clear from the
their feelings of inner confidence and wellbeing. research that gold jewellery markets cannot be
This characteristic was particularly apparent categorised as “investment” or “adornment”, and
among WGC core target groups. that the emotional attributes and benefits of
gold, as well as its practical or financial benefits,
play important and complementary roles for
women around the world.
6
About the Research Programme
The World Gold Council conducts consumer research The research provides the following insights:
programmes to ensure our marketing strategies,
together with those of our partners, are built on Defines what the attributes are that make a
factual insights. In 2002, we conducted a major consumer a gold consumer
study across five main markets to understand the
fundamental position of the market: Who were Provides information to create insights to build
gold’s consumers? Why did they buy? Why didn’t successful fact-based customer driven marketing
they buy? What competitive products did they buy? programmes
etc. From this study we identified key consumer
segments for gold, based not only on attitudes and Helps us understand strengths and weaknesses:
behaviours, but also usage and values. The term our own and those of our competitors
values is defined by core principles and ideals that
women hold as central to their lives, in particular, to Helps us define who our real competitors are
the way in which they live their lives. This enabled us
to develop a psychographic rather than a purely Determines who are target customers are, and
demographic model. The findings in our research how to reach and retain them
have helped guide the marketing strategies of the
World Gold Council since 2002. Helps us define what makes gold different in the
eyes of the consumer: what are gold’s unique
Building on the outcomes of our original global selling points and how do they differ from
research programme, in 2005 we enhanced our competitive products?
understanding of the motivations behind women’s
purchase of gold and competitive products. We Helps us to produce marketing campaigns
looked at what role gold plays in women’s lives and specifically aimed at prime prospect consumers
how gold fits their emotional and rational needs,
together with major shifts since 2002. This has Measures the effectiveness of our marketing
given us an unprecedented holistic understanding of programmes
today’s gold consumer. Here we showcase key
highlights of our understanding and how we have Creates commercial value for World Gold Council
used this to provide both strategic and tactical
direction. Using the findings of this research, we are able to
improve consumer focus and develop a fully
The World Gold Council originally surveyed over integrated approach that goes beyond advertising
5,500 women in five target markets. In 2005 we campaigns, to a clear and consistent marketing
extended our survey, meeting over 9,000 women in platform for gold across the globe, which will help
six key countries. These women told us about their stimulate the demand for gold jewellery.
behaviour and attitudes towards gold jewellery and
other luxury goods and services, as well as general
information about their lifestyles and motivations
7
Our Strategy Research Background
Develop in-depth understanding of In 2002 the gold jewellery market was performing
poorly. Gold jewellery demand, which accounts for
the attitudes and behaviours of around 70% of total gold demand, was in sustained
decline in both tonnage and in value terms. Gold
consumers towards gold jewellery
jewellery had lost desirability and relevance to the
in all major markets. consumer, resulting in loss of market share to
diamonds and platinum in the jewellery market. At
the same time gold was competing against an ever
Focus on integrated strategic increasing pool of luxury goods, such as leisure,
electronics, fashion and luxury accessories, all of
partnerships with leading gold which had stronger marketing platforms than gold.
As a result, new supply was higher than jewellery
jewellery retailers, wholesalers demand for the first time in eight years, the gold
and manufacturers. price was stagnant and gold jewellery was
experiencing market erosion in all territories.
Work with these partners to In response to this, the World Gold Council changed
the focus of the organisation from a disseminator of
develop advertising and information and a general advocate for gold
promotion, to a commercially driven marketing
promotional materials and function for the gold industry. We have established
retail environments. ourselves as the primary catalyst in transforming the
global gold jewellery category and driving increased
consumer demand.
Strengthen gold jewellery's
Our strategy is to focus on integrated strategic
core proposition and increase partnerships with leading gold jewellery retailers,
wholesalers and manufacturers. We work with these
consumer demand. partners to integrate advertising and promotional
materials and retail environments, to strengthen
gold jewellery’s core proposition and increase
Use our research programmes consumer demand.
to develop globally appropriate
The findings of our research programmes have given
messages about why, when us significant insight, resources and information to
develop globally appropriate messages about why,
and where to buy gold jewellery. when and where to buy gold jewellery. Building on
gold’s core values, we have focussed on key
messages as to how it makes consumers feel, a
prime motivator for women to wear gold.
8
Key Findings
Increase in Core Markets for Gold
Fig 1. Estimated Growth of Core Target Group
2002 2005 m Millions of women
32m
25m
81 4m
74 3m
65m 56m
67
% of defined market
36m
37m
53 53 53
39
34
China India Saudi Arabia USA
Base: All respondents. Defined market is the female population represented by the research.
China: urban population. India: urban population. Saudi Arabia: urban population. USA: nationally representative.
We have identified core target groups for gold others and gold plays a strong role in this. These
jewellery in each market, based on women’s women have little desire to be ‘modern’ in their
behaviour and attitudes towards gold. Since 2002, culture. Their role as a wife and mother is critical to
these target groups have grown significantly, with an them.
estimated increase of 56 million women in four main
markets alone, totalling over 150 million in these key Gold jewellery, especially yellow gold, is extremely
countries. This growth is driven partially by increasing important to these women. It is an expression of
wealth, but also by changing attitudes and tradition and wealth, it enhances their appearance
behaviours. and symbolises the importance of marriage. They
are slightly more rational than some women in their
selection of jewellery, but still appreciate the
emotional benefits that wearing gold can bring.
Women who are traditional and status
Gold has the added bonus of being seen as a wise
conscious in their outlook:
financial investment.
A key segment in India. These women embrace
tradition by following customary norms and culture.
They use traditional symbolism to communicate to
9
Women passionate about their Women and Gold Jewellery
appearance and accessories:
A key segment in all six countries. They desire to Amongst the core target groups, feelings evoked by
portray a positive appearance that enhances their gold jewellery are consistent across markets. Gold
feeling of self confidence. These women dress to jewellery offers and delivers emotional benefits to
‘lift’ their mood, paying particular attention to how women, however the rising price of gold has led to
they are perceived by others, they always need to an increased interest in the investment potential,
look their best. In some eastern markets these intrinsic value and financial security gold offers; far
women are aiming to be more modern and from detracting from its appeal, this is universally
progressive, but are conscious of the boundaries of recognised and adds to the desirability of gold
tradition. Through design, gold jewellery enables jewellery. It allows women a strong justification to
these women to express their modern self without buy gold rather than competitive products whose
conflict, since gold is traditionally endorsed. value may fall over time.
Overall, gold is extremely important to this group; Women wear gold jewellery as a reflection of their
they own many pieces, but still have the desire to personality. Wearing it makes them feel good and
own more. Their gold jewellery communicates allows them to express their individuality and style.
beauty and status to others through visible or Often there is an added sentimental reason for their
noticeable designs. Family and heritage are very choice of piece.
important to these women and the role of gold in
gifting and sentimental value is critical. Fig 2. Attitudes Towards Gold Jewellery
Self confident, creative women:
Reflects my taste and
78
personality
A key segment in China, Saudi Arabia, Italy and the
USA. These women have the desire to express their Wear just for me, not a
73
feelings and individual personality through their statement for others
clothes, jewellery and accessories. These are
Favourite item has great
creative, unique women for whom self expression, 72
sentimental value
albeit in a more discrete way, is a key motivator.
They follow their own feelings and desires rather As much of an investment
69
as a fashion item
than conform to what is expected of them. These
women are the most progressive of all the key Like to wear items that are
63
targets. They are confident, well balanced, serene distinctive
and slightly irreverent. They have a passion for
Wearing makes me feel
exploring a wide range of social and cultural 61
good
experiences. Life out of the home is key for them.
Like browsing even when 58
not intending to buy
Gold jewellery is valued for its design and colour,
with white gold popular amongst these women. Yellow gold is coming back 55
Originality of design is important. into fashion
% Agree Strongly / Agree
Base: All respondents (China, India, Italy, Saudi Arabia, USA, Turkey)
10
Perceptions of Gold Jewellery and
Competitive Luxury Goods
Gold’s strong and distinctive image compared to Diamond and platinum jewellery are distinguished
competitive products, be that other jewellery, luxury from other luxury goods by their image of rarity,
fragrances and cosmetics, designer clothes or exclusivity, luxury, beauty and wealth. Women hold
handbags, gives us a strong foundation for building a these unique product benefits very highly. Gold,
unique communication proposition. however, is more universal in its attraction and
appeal.
Consumers believe that both yellow and white gold
jewellery offer them benefits that other jewellery Luxury fashion items and cosmetics are perceived by
types and luxury goods do not. However, globally women as offering more superficial, but nevertheless
yellow gold has a stronger image. everyday benefits. These items make women feel as
though they are both admired and seen as
Gold is seen to have unique attributes, with professional and successful by others, but do not
respondents humanising its characteristics, deliver on the inner needs of women.
describing the yellow metal as having
a stable and mature personality, bringing warm Competitive luxury goods do not compete on the
emotional benefits that are driven by being special same profound emotional level as gold. They may
and loved. White gold is characterised by a more be functional, stylish and up to date, but do not
playful and youthful image, but is not only for the deliver the same depth of emotional benefits as that
young. The attraction of white gold lies in the more special or favourite piece of gold jewellery that
creative and less formal designs that are available. makes a woman feel good.
11
The Role of Gold
(reasons for wearing gold jewellery)
Identifying what makes women want to look their Sentimentality associated with gold jewellery is also a
best and what makes them feel their best, is crucial key driver for women of today. Feelings of
in understanding the opportunity for gold jewellery sentiment may be associated with a piece of
in this resurging market. jewellery from someone special, or a design that
expresses a person’s individuality.
Today’s modern women primarily want to look their
best for personal gratification. It gives them inner
confidence and a feeling of wellbeing. Gold jewellery
plays an important and regular part in women
looking good, especially among our core target
groups.
Fig 3. The Role of Gold
Reasons for wearing gold jewellery %
51
52
72
Feel good about self 65
66
71
44
46
24
47
Sentimental value 39
54
63
51
35
40
54
Express individuality 47
29
59
26
28
33
35
Be modern/up-to-date 31
43
40
25
21
15
38
Be cool/trendy 23
41
29
7
Global
18
21 China
29
India
Good first impression 16
31 Italy
28
6 Saudi Arabia
USA
18 Turkey
23
36
Be admired/respected 11
32
19
4
Base for figures shown: Global = All respondents. By market = Identified core target group in each country
12
Buying Gold Jewellery
Fig 4. Desirability of Gold Jewellery
What women would choose if they were given $500 to spend on themselves
2005 % 2002 %
43 33
15
up 11
Gold 86 Gold
jewellery
29 10 jewellery 39
68
53
53 pp 58
62 32
27 28
27 29
*Weekend 9 Weekend 8
43
away away 36
10
50 12
11 38
21 16
28
10
*Designer/ 22 Fine
8
luxury clothes 35 fragrances 20
11
39 35
6 12
17 16
7 14
*Meal at a nice 17 Consumer
26
restaurant 17 durables 11
8
47 11
8 14
17 13
16
*Put money into Meal at a nice 14
26
Bonds/ Savings 5
8 restaurant
7
etc 3
31 13
5 16
Global Global
China China
India India
Italy Italy
Saudi Arabia Saudi Arabia
USA USA
Turkey
NB: Longer list asked in 2005. * Items not asked or asked differently in 2002. Turkey not included in 2002 study.
Base for figures shown: Global = All respondents. By market = Identified core target group in each country.
13
Despite increasing competition from other consumer Gold as a gift still has a strong presence. Gold is
goods, gold jewellery is one of the most desirable everlasting and ideally suited to many diverse
items for women globally and has increased in occasions. It can be a gift to mark a special
desirability since 2002. In the majority of core occasion, or for a special friendship. For women
markets, this trend is reflected in the increased gold maintains its lifelong appeal and value.
purchasing of gold. Interestingly the greatest The main barrier to buying gold remains perceived
increase has come from women buying gold for affordability in women’s minds: “Can I justify that
themselves. Women are no longer waiting to be gold bracelet; or shall I buy that second pair of
given gold, although that remains highly desirable shoes; or that new handbag?” However, as global
and pleasurable. wealth increases, particularly in core developing
markets, so the affordability barrier has decreased,
allowing women to indulge themselves.
Fig 5. Buying Gold Jewellery
Overall purchasing levels have increased slightly with the greatest increase in
women buying for themselves
Bought at all % Type of purchase %
31
Global 47 Global 36
50 34
31
20
China 27 China 21
25 12
8
34
India 51 India 65
71 32
32
31
60 31
Italy Italy
54 50
40
65
76 54
Saudi Arabia Saudi Arabia
68 57
44
44
57 56
USA USA
66 35
38
38
Turkey 63 Turkey
49
2002 2005 For self 2002 2005
As gift 2002 2005
Base for figures shown: Global = All respondents. By market = Identified core target group in each country
14
Impact of Findings for World Gold Council
The research has provided the World Gold Council
with a wealth of knowledge and insight that has
been used to develop a marketing platform which
encompasses the core values and connectivity
associated with gold, together with the wide and
powerful vocabulary that consumers use about the
yellow metal and its role in their lives.
The marketing platform communicates relevant,
contemporary and powerful messages with a strong
emotional hook. We have developed messages that
are both relevant and flexible enough to work for
different markets, to target different segments of
consumers. These messages seek to address both
the reasons for buying gold, as well as reasons and
occasions to purchase gold.
15
‘Voices of the World’: Local Market Implementation
USA Middle East
The World Gold Council’s “speak gold” advertising In the Middle East, as elsewhere, there is increasing
campaign ties into the role of gold in expressing competition from a wide variety of goods.
deep emotions and symbolising key events in life, Promotional activities, such as the Dubai City of Gold
because research highlighted the need to reinforce Shopping Festival is a tactical project aimed at
the ‘why gold’ message together with the retailer keeping gold top of mind ahead of competitive
message of ‘where to buy’. The campaign uses real products.
women instead of models, thus capturing the
consumer in its relevancy to their everyday lives. By Gold is a popular gift in the Middle East, but within
embracing authenticity and depicting real women in the core target there has emerged an important
real situations, the campaign represents gold’s core group who want to express themselves as modern
universal values - gold offers a unique language of its and contemporary women. For this group,
own. The print campaign was extended into point traditional gold jewellery can feel limiting, as it is
of sale materials and catalogues. The campaign also deemed old fashioned. In response to this trend,
ran in the Middle East, Turkey and Italy. Damas, a leading jeweller in the region, has
developed a strategic communication programme,
Our research identified that having no occasion to Farfasha. To represent the brand’s attributes of style
buy a gift was one of the barriers to purchase in the and self-confidence, rising pop star Nancy Ajram is
USA, together with the feeling that there were more the brand ambassador, promoting a new exciting
suitable gifts than gold. These findings, coupled collection of bold designs.
with the 2005 data that showed a greater number
of women saying that they would consider buying
gold as a treat, spurred the US market to devise a
tactical campaign to promote gold in a given
month. May is Gold Month was implemented with a
variety of strategic partners.
Finally, “Gold Expressions” is a global product
development initiative that is designed to address
consumers’ desire for innovative products. Top
Italian designers and manufacturers design product
based on understanding the target consumers’
needs. In the USA, we are working with a leading
wholesaler to make these exciting designs available
for the market across a broad variety of retail
channels.
16
India China
The Indian gold jewellery market has a very strong Our research conducted in 2002 identified that
heritage. It is important however to ensure that among our target group in China, gold was falling
gold evolves and is still seen as relevant to behind other products because its traditional image
consumers, particularly with the changing role and was losing relevance for women of today. As a result
attitudes of women. Women are no longer choosing we launched the K-gold initiative in 2003 with
to wear gold because they are expected to, instead leading retailers. The programme was initially
they are looking for products that make them feel introduced in Shanghai and then later in other key
glamorous, pampered and modern. Our research cities. The K-gold initiative was to bring new
has shown that gold has such perceived attributes, modern 18 ct gold products to our core target
and to promote this the World Gold Council has audience, to encourage them to think differently
launched “Gold Expressions” with D’damas. Gold about gold and to see gold as a product that was in
Expressions showcases aspirational and tune with their need to be fashionable and
contemporary Italian jewellery that has been contemporary. An important touch point for the
designed by leading Italian manufacturers based on consumer is the jewellery store experience, and so,
our understanding of consumer needs and trends for in addition to the advertising, the retail environment
the modern woman. was re-invigorated. The latest research shows that
gold has much greater appeal and that emotional
values are particularly important in their choice of
luxury goods. The new K-gold campaign focusses on
an emotional expression of individuality, attitude and
identity through K-gold.
17
The Results of our Strategy so Far
The initial results of our efforts to revitalise the gold The World Gold Council’s efforts have contributed to
jewellery market have been very successful. With this growth, and the clear measures of success that
overall jewellery demand in 2005 five per cent the WGC now has in place demonstrate that it is
higher than 2004 in tonnage terms, and a making an impact. The markets where the WGC is
substantial 14 per cent higher in dollar terms, we active are the largest markets for gold which were all
have now successfully reversed a period of declining in decline prior to 2003, but are now showing
demand and indeed, in value terms, have seen growth. Gold jewellery sales also outperformed GDP
record demand at around US$39 billion at primary growth, retail sales indices, and diamond and
gold value, approximately US$80 billion at retail platinum jewellery sales in all these focus markets.
value, making it one of the biggest brands globally.
The World Gold Council intends to roll out this
Over the past two years, countries where the World approach to more partners in an increasing number
Gold Council has been conducting jewellery of markets, but in order for this to be valuable we
promotion campaigns have outperformed the rest of need to continue to build the relationships with our
the world. In 2005, gold jewellery demand rose 17 partners to ensure we are targeting our marketing
per cent in value terms in those markets compared efforts in the most effective way. Whilst gold has
to only 7 per cent in non-promoted regions, leading performed well in the jewellery sector last year, gold
the market in attaining record levels of demand in still has a lot of ground to make up to recapture its
value terms and improving gold jewellery’s market former status. The gold jewellery category is still
share. significantly under-funded compared to competitive
products.
Fig 6. Jewellery Demand (US$)
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Others India USA Middle East Turkey China
18
Research and Statistical Methods - Overview
The World Gold Council consumer research was
carried out in 2005. Qualitative research was
conducted in March and April 2005, with the
quantitative research conducted in July and August
2005.
The study was conducted in six key markets: China;
India; Italy; Saudi Arabia; Turkey and the USA.
For the quantitative research a total of 9027
interviews were conducted, with approximately
1,500 in each market.
The research methodology was conducted using
face to face interviews lasting at least 60 minutes in
length. The research was conducted with women
aged 15–65 years (minimum age of 16 years in Saudi
Arabia and USA, and 18 years in India and Italy).
With the exception of USA and Italy, where samples
reflected the entire female population, all other
markets were representative of the urban population
only, and the data was weighted to reflect this.
The research in both 2002 and 2005 was carried out
by GfK NOP.
WORLD GOLD COUNCIL
55 Old Broad Street
London EC2M 1RX
United Kingdom
Tel. +44 (0)20 7826 4700
Fax. +44 (0)20 7826 4799
www.gold.org
For further details, contact your local WGC office
or email us at: marketing@gold.org
