Having forked out 55 million rand (A$14 million) in July for a 25% stake in South African jewellery group OroAfrica, Anglo is now fine tuning its marketing assault on the youth market.
Recent surveys have found that gold jewellery consumption has fallen dramatically in the under-35 age bracket, with young people viewing gold as an old fashioned relic.
Anglo hopes to overturn that image by using OroAfrica – a successful family-owned exporting business - to make gold fashionable again among young consumers.
The gold producer wants to shape the market for its product through downstream activity, rather than having the market shaped for it.
"I’m very much in favour of the cheapening of gold, in terms of making it available for everyone," said Bobby Godsell, chief executive of AngloGold.
Godsell told journalists at the company’s headquarters in Johannesburg that Anglo envisaged a marketing campaign based around "lifestyle choices" that appealed to young people.
"Gold belongs in clothing stores, not jewellery stores," he said.
Godsell’s gold marketing gospel was backed up by managers at the company’s new jewellery arm in Cape Town.
"The jewellery retailing industry is in a time warp – it hasn’t moved on," said Gordon Fitzsimons, marketing manager at OroAfrica.
He told journalists that jewellery was competing with cell phones, casinos and other discretionary spend items for the youth dollar.
OroAfrica, backed by AngloGold, will adopt a two-pronged approach, looking at a fashion label tie-up and the creation of an "own brand" jewellery targeted at the mass market.
"We are working with Anglo on the timing of the launch and the total spend to set it up," Fitzsimons said. "We are breaking new ground – nobody has tried to do this in the jewellery business before now. We are working with retailers to develop new products and concepts."
One idea is a "mega shop" concept for jewellers, which could involve interactive displays and computer design facilities for customers.
The new initiatives will be tested in Europe, North America, and possibly China.
AngloGold is working with the World Gold Council in an effort to liberalise the gold market in China, with the aim of trebling that country’s annual gold consumption to around 600 tonnes.
America remains the key market to crack, though, with annual US retail sales of gold jewellery estimated at around US$15 billion.
At the moment, Anglo spends around US$20 million a year on its global marketing efforts, including its annual levy to the World Gold Council.
"This is an extremely long-term project and the results won’t be instantaneous," said Nick Tarlie, a director of OroAfrica. "We expect to see the results in four or five years time."
He said the long-term aim was to increase OroAfrica’s turnover from 300 million rand (A$75 million) currently to 1 billion rand (A$250 million) five years from now.
OroAfrica has a strong export focus and has established a 50:50 joint venture with Italian company Filk Spa, for the manufacture of gold chain jewellery in South Africa specifically for export to the United States.
OroAfrica will also try the new marketing concepts in Australia, and has bought a 75% stake in a Sydney-based distribution company called OroAustralia.
