By Russell Shor. Reprinted by special arrangement.
Forty years ago diamonds and gemstones were rocketing in price on a boom the likes of which no one had ever seen before. $50,000 for a one-carat D flawless! I was a newbie back then and dealers were telling me that price was cheap. $100,000? $200,000? per-carat. That was more like it, they said.
Six months later the boom was over. These stones didn’t just drop in price. They fell so fast that there was NO PRICE because no one was selling and no one was buying. Then came the question — Will the gem and diamond trades survive this?
Yes it did, but it was not the same.
Today, the world is locked down and people are asking the same question. And the answer is — YES— but it won’t be the same.
The short term reality we all must face is — it’s going going be a bad year. It’s unlikely that diamonds, gemstones and jewelry will be top of public mind when people emerge from their lockdowns. Not all the jobs that have been lost will come back. Much of the government pay-outs will go to back mortgages, utility bills, credit card payments While there may be a small spike in postponed engagement ring demand, other sales drivers such as graduations, anniversaries and birthdays will be lost, at least through the first half of the year.
I know diamond and gem dealers do not like bad news — look how dealers jumped all over Rapaport for lowering prices on his March report (Rapaport should have suspended his list in February in my humble opinion, when the reality was that trading volume had slowed too much to gauge market prices.) But this is reality. And we have to prepare for its aftermath.
Once we accept this reality , then we can understand that it will be a bad year for most businesses around the world and our adversity is shared by nearly everyone.
Next step. What can we do about it? A few thoughts.
First, this pandemic demonstrates graphically how we are all interconnected and that there is a common good. Here is our opportunity. Build goodwill in your communities for a start. Our sense of community will be much stronger coming out of this and the benefit and support you provide won’t be forgotten
In the longer term, we can build goodwill with consumers at large — some of whom (raised on tales of blood diamonds) deem us to be a greedy trade. Don’t just insist that the diamonds and gems you offer be ethically mined and processed:— support efforts to insure that ALL gems are ethically mined and cut. ALL is a stretch, I know, but it’s worth trying.
Of course, this is off in the future so I’ll revisit this later when things are a bit more normal; or entering the new normal.
Finally— after we re-emerge from lockdowns, consider promoting diamonds and gemstones for what they are: Miracles of nature that connect us to our Earth as nothing else can. Need to reach millennials? This is a way.
In the meantime use this time to plan for new normal coming. The world won’t be the same. We cannot stay the same either.
Russell Shor is an industry veteran with more than 40 years of experience in the diamond industry, including 20 years as journalist and analyst at GIA. The author currently works independently providing communications consultancy, writing articles, blogs and news for clients, and advising on sustainability and diamond and gemstone supply chain issues while also working with Roshem Impact Corporation.