Retail sales of gold jewelry have exploded in 1998, attaining growth rates unseen in more than half a decade. Consumers are buying at a $20 billion pace thanks to a growing perception of value at mass and a confidence-building economy.

For as far back as statistics are available, that unit gain hasn't been matched, according to World Gold Council data (dating back to 1993) supplied by Audits & Surveys Worldwide.

It's a blossoming era for gold jewelry, particularly at full-line discounters, which are beginning to apply category management principles for several reasons: to raise the department profile; to make it semi-self service for greater impulse; and even to experiment with accessorization displays within ready-to-wear apparel.

These changes are long overdue and speak to a demystification of jewelry at mass--one that finally has tapped pent-up demand and unlocked the potential for greater department productivity.

"Gold jewelry has always been important to consumers' image of a store, says Michael Paolercio, chief executive officer of Michael Anthony Jewelers. "Mass has strived to achieve two goals: high GMROI and increased consumers awareness of their total merchandising effort in accessorizing apparel."

Trade sources confirm that gold jewelry generates nearly 100 percent of GMROI at mass, based on 45 percent to 55 percent margins and 1.5 to 2 turns annually.

"Aggressive mass outlets have learned that total gross margin dollars far outweigh the turn rate to their benefit," says president Anthony Paolercio.

Moreover, he adds, "People feel they can trust the value of gold jewelry in mass. Gold has intrinsic value, while diamonds are more of a blind purchase and costume jewelry has no intrinsic value."

The category's importance is easily demonstrated by better locations on the selling floor and greater investments ill fixtures made leading mass chains. Kmart now places jewelry departments on the main traffic aisle of every new store. Target has created an accessories core in the middle of ready-to-wear, with gold jewelry flanked by watches and costume jewelry, as well as belts and purses. Wal-Mart has built jewelry into its high-volume area across from high-traffic consumer electronics.