Diamond industry analyst Ben Janowski bemoans the lack of generic diamond marketing in his latest blog. Where are the glory days when Marilyn Monroe and Elizabeth Taylor put diamonds in the global spotlight, along with De Beers, Tiffany & Co, Harry Winston and Laurence Graff. "Hollywood stars rarely buy diamonds - they mostly borrow them for the Oscars. I could not name a modern Taylor. De Beers gave up diamond promotions years ago, and now only spends money when tied to Forevermark. (Would anyone even suggest that Forevermark is a respectable replacement for Taylor?) Winston, now owned by Swatch, is not even a ghost of old Harry. Graff focuses on the 1/2%, not even on the 1%, so that's not much help for us there. Tiffany stands out among the global brands as a strong diamond merchant, but does not see itself as carrying the diamond torch." In addition, for the last 40 years, "the middle class has slowly seen its buying power fade away as wages have stagnated while inflation slowly had its effect. In jewelry, the problem has been exacerbated by rising prices for diamonds, colored stones and precious metals."
But there is hope, he stresses: "In spite of all this, the diamond dream stays alive. The engagement ring still symbolizes love and commitment, something men willingly pay a high price for. It publicly acknowledges all that for everyone to see. It is unlikely, barring totally bizarre events, for that to change in the coming years." However he points out that the industry must remain vigilant, "We should go blithely on as if nothing has really changed. The Dream is not impervious to all downturns in the economy or the mindset of the public. We are in the midst of a distinct decline in jewelry sales, including diamonds. And how has the trade reacted? With diamond daydreams. One blogger says that the industry needs to step up and spend the money to build (or rebuild) the diamond image. This is a pure fantasy. De Beers was able to do that when it was a true monopoly, but even they had to step back because the cost is prohibitive unless all sources are on board. That is not possible, not just because some major sources (Alrosa, Rio Tinto) will be reticent; not just because diamond prices are now too volatile; and not just because the major sources can already begin to count the years before their mines will become uneconomic. It is also because there are huge stocks held by the public that will be an ever growing, uncontrolled source of diamonds. It is also because profit margins for diamond cutters and dealers are razor thin, essentially making contributions to an image campaign a non-starter. It is also because no one wants to pitch in unless every one of the other thousands of diamond companies also pitch in." Meanwhile, another daydream is that the development and marketing of man-made diamonds needs to be stopped or discredited.
"In the diamond and jewelry business, protecting the future will take an open and inclusive effort to coordinate the very diverse interests of large and small companies. Major financial institutions (like Morgan Stanley) are issuing reports warning of the dangers ahead in the diamond business. Important publications, like The New York Times, The Guardian, the Wall Street Journal and the New Yorker have covered the subject. They all sense a parameter shift, and think a major story is brewing. It is already the case that major banks will no longer finance the business. And if fair-weather friends are no longer with us, then maybe the weather is not so good. It is incumbent on the broad-based industry organizations all over the world to set aside defending their fiefdoms and reorient the industry towards a workable future," he concludes.