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Sweeten the Deal

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By Victoria Dwek

When the price of gold sent jewelry out of reach for many consumers, Murray Shabot asked: what could get them excited to buy again?

After a volatile 1970s, throughout the 1980s and 1990s, the price of gold had been quite steady—hitting the high of the 20-year span at $500 an ounce in 1987 as inflation accelerated, dipping to its $252 low in 1999, but mostly hovering around a quiet and reliable $400.

“My father had two jewelry stores in downtown Manhattan—the original is still on Nassau Street, but our second store was in the World Trade Center. After September 11—I knew I didn’t want to be in retail long term,” said Murray Shabot, CEO of World Trade Jewelers. “Manufacturing and licensing was the future—but how could we apply it to jewelry? One of my uncles, in wholesale apparel, had hundreds of licenses we could have worked with—but a license that would work on a t-shirt wouldn’t work on a piece of high-end jewelry.”

Murray had the right idea—but was still searching for the right match. “We considered evergreen licenses such as Betty Boop and Pink Panther. Those brands could only be produced on generic, lower-end jewelry, that had to be sold at a very high volume. But who was buying that?” They decided to drop the licensing idea and moved back into higher end, generic jewelry.

In 2005, Hurricane Katrina sent gold back on a steady climb, breaking $500 again for the first time in 18 years. And then, in 2007, when the credit crisis hit, investors poured their money into gold as a safe haven. Gold was $600 in 2007 and hit $1000 in 2008. As this magazine goes to print, gold is trading at $1660 an ounce. “When the economy went bad, the price of gold and diamonds shot up like crazy. Anything made of gold was over $500. Jewelry almost became obsolete—no one could afford to buy anything substantial. We needed to revisit my licensing idea and move away from high end jewelry.”

Jewelry, New Again

One day, one of World Trade Jeweler’s female employees was thinking out loud, “How about the Hershey’s Kiss?” she said. It was perfect.

“How many billion of pieces of heart jewelry are sold every year? A kiss is a universal symbol of love. The Hershey’s Kiss has been around for over 100 years. It’s an iconic symbol in the U.S. Everyone knows what it means. And, it’s essentially just an upside down heart. If we could grab just a fraction of the heart business, there would be great potential for the Kiss.”

That day, Murray was in the supermarket and landed in the candy aisle, where he picked up a bag of Hershey’s Kisses. He noticed that each plume, the paper tag extending from the top of the Kiss, had a different saying. He thought, “We can do this in white gold or silver…or pavédiamonds, that would emulate the chocolate’s famous silver foil wrapper. Then we can inscribe different sayings on it.” Murray recognized that his demographic could be as wide as the consumers who enjoyed Hershey’s Kisses.

Together with his father Alan, President of World Trade Jewelers, and his brother, Eddie, the VP, Murray approached Hershey’s to acquire the license. “Hershey’s had never even thought to translate their brand to high end jewelry. Previously, jewelry with the Hershey’s Kiss had only existed as a novelty. It was on junky jewelry people could buy as a souvenir when they visited Hershey, Pennsylvania.”

Branding the Kiss That Lasts Forever

Before the Shabots could introduce Hershey’s Kiss Jewelry to the marketplace, though, they had to establish the brand. “I wanted to make sure people didn’t look at this as a cute novelty. If it were to have staying power, it needed to be considered a classy item.” They developed the high end Hershey Kisses first—in 18kt gold, with the best quality diamonds and the finest workmanship. The most coveted product in the line was a 3-dimensional pendant, the size of an actual Hershey’s Kiss, made in white gold and covered with diamonds.

“I didn’t expect to sell a lot of them, it was just for marketing purposes. Later, we would introduce the sterling silver and cubic zirconia products. But launching with gold and diamonds gave the jewelry prestige and exclusivity. Then came the time for PR. We sent celebrities samples of the jewelry. Pictures of them wearing our Hershey’s Kisses showed up in the magazines. We used the photos of the celebrities wearing the jewelry at our booth at the jewelry show. That approach worked. Retailers wanted it in their stores.”

Murray never really left the retail business—because wholesalers today can’t only think about appealing to the retailer. They need to constantly have the end buyer in mind, and think of ways to attract their attention—even if the shopper isn’t in their store. “We created very cute displays in the shape of a Kiss, that immediately grabs the shoppers’ attention. Our packaging looks like a big Kiss. For Valentine’s Day, we offered our products with free gifts, like chocolate scented candles, cookbooks with Hershey’s recipes, and of course chocolate. It becomes a fun product to buy, and makes it easier for the salespeople to sell.”

Murray thought about what his customer wanted—and how it changed from earlier in the decade. Women always want pretty things, and people will never stop giving gifts. Quality jewelry will never actually be obsolete. Today’s jewelry consumer, though, might not be able to afford the gold bracelet that they could have earlier in the decade—but they might be reluctant to step down to silver. But when the poster boy of Hershey’s Kisses Jewelry was an extra large gold and diamond-studded pendant which retails for $5,995—the silver version of this high end item, at a small fraction of the price, becomes very desirable.

“Hershey’s Kisses weren’t a new item that all of a sudden became hot. They’ve been around forever, they’re classic and recognizable. This was one
that belonged in a jewelry store.”

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