Charles Wyndham is left singularly unimpressed with the Diamond Producers Association (DPA) new slogan, as part of its marketing strategy, of ‘Real is Rare. Real is a diamond.’ It falls far short of the legendary ‘A Diamond is Forever’ slogan which hit the emotional value of diamonds and also the fact they are a store of value. But it also aims for the wrong target and even succeeds in missing that, he comments. "My assumption is that the key aim of this tag line is to combat the threat of synthetic, or as I would prefer [to call them] cultured diamonds.
"Real is Rare. Real is a Diamond". The Diamond Producers Association today delivered a special presentation to members of the diamond industry at the JCK Trade Show in Las Vegas to reveal the long-awaited compaign slogan and platform with which they hope to attract the generation of Millennials. The DPA's marketing campaign, intended to fill the void since De Beers ceased generic marketing, is the result of six months of development, including in-depth research into its target audience: millennial consumers.
I don't simply throw diamonds at buyers and pressurize them into buying with all kinds of sales tricks. Buyers have faith in me; everything is on the table and very clear. Integrity is very important to me. Rough needs to be seen and inspected before it can be sold. This is a business that needs a personal touch. You have to create a pleasant atmosphere and give clients the feeling that they will not lose out and that they can make a profit on the goods. [The same need for transparency is true of the industry in general].
Financing and persuading banks to provide credit to the diamond trade, the lack of profitability for manufacturers, the critical need for generic marketing of diamonds and persuading Millennials to buy diamond jewelry, the damage caused by frequent changes to price lists, the threat from synthetic diamonds and deliberate overgrading, together with diamond sourcing protocols were the main issues debated at length at the World Diamond Congress in Dubai this week.
The Diamond Producers Association (DPA) and India’s Gem and Jewelry Export Promotion Council (GJEPC) signed a Memorandum of Understanding (MOU) to work together to bolster global diamond demand. The agreement was signed by DPA Chairman Stephen Lussier and GJEPC Chairman Praveenshankar Pandya. The MOU calls for quarterly meetings between the two bodies to discuss industry challenges and opportunities, review and discuss marketing progress and share industry insights on matters of mutual interest.
De Beers' increase in the price of rough diamonds in April for the first time in one year, albeit only by about 2%, is an encouraging sign, writes diamantaire Melvin Moss, adding that although the diamond market will still take a year or two to recover the news is positive. Indian cutters have increased output and diamonds are selling with polished prices stable. "VS and SI goods are hot but GIA reports are inconsistent making it very difficult to purchase tightly graded diamonds."
The fact that diamond miners have been unable to prevent prices from dropping below where they were a decade ago is a clear sign that the industry is failing to maintain the cachet of its brand. Today's consumers have different desires than those of their parents who may remember Marilyn Monroe singing 'Diamonds are a girl's best friend' and are more likely to spend their money on nice vacations, fancy handbags and high-tech gadgets. They likely only think of diamonds when it comes to a (mostly) once-in-a-lifetime engagement ring or a wedding band.
Martin Rapaport has written an in-depth diatribe rejecting the claims of sythetic diamand producers that their product is more ethical than naturally mined diamonds, exposing the value proposition of synthetic diamonds as a ruse and calling natural diamond miners to join together to aggressively market and natural diamonds and attack synthetics. It is nothing less than a call to arms for the natural diamond industry, and he goes so far as to call the way synthetic diamonds are marketed as "evil".
"Very few speak of the good diamonds have done for some of the poorest people in the world," write Mark Boston and Vinod Kuriyan in a blog article on GemKonnect. "Of the positive influence on communities in literally every single continent barring uninhabited Antarctica." With the world's attention grabbed by evils such as terrorists, people traffickers, sex slavers, and drug cartels that destroy millions of lives, good deeds don’t get the sort of publicity that evil does.
International Gemological Institute (IGI) North America has begun a national advertising campaign on U.S. cable TV to raise consumer awareness about, and confidence in, the diamond and fine jewelry industry. The adverts started airing on Fox News, MSNBC, CNBC, CNN, HLN and Time Warner Cable NY1 News from March 14, according to an IGI statement Monday. They are focused on educating consumers about the need for independently graded and evaluated diamonds, which would in turn provide peace of mind and incentivize them to buy fine gemstone jewelry.
In an exclusive interview with Rough & Polished, analyst Paul Zimnisky discusses a wide range of issues, from diamond production volume and prices to oversupply and mid-stream purchasing trends, profit margins, consumer demand and synthetic diamonds. A few key takeaways:
The Diamond Producers Association has announced that Jean-Marc Lieberherr, formerly its Chairman, is to become Chief Executive Officer. Jim Pounds, an executive vice-president at Dominion Diamond, is Vice Chairman, and Forevermark CEO Stephen Lussier, as announced last week, will serve as Chairman, all with immediate effect.
The International Diamond Week at the Israel Diamond Exchange (IDE) officially opens today in the diamond trading hall of the bourse, with hundreds of buyers from overseas participating in the event, the IDE said. CIBJO President Gaetano Cavalieri will carry out the official opening of the buyers' week, which runs until February 18, and later will sign a statement of purpose for the establishment of the Israel Diamond Jewelry organization. Later on Monday, a panel will address the issue of marketing diamonds.
"The World Diamond Mark (WDM) has developed and started to implement the fundraising from retail end of the industry and from outside service providers. This endeavour will continue. Soon the miners, through the DPA, and retailers, led by the WDM, will have the funds. If the midstream industry will not follow, its market share and profitability will shrink even further. [...] In this respect the role of major centres and bourses is paramount.
With a touch of hyperbole, The Times of India writes that, "a fierce marketing battle is on the cards between companies making lab-grown diamonds and those producing natural ones to woo consumers across the globe" as demand for diamonds stagnates.
Speaking at the opening of the four-day IIJS Signature show in Mumbai, writes GemKonnect, India’s Gem & Jewellery Export Promotion Council (GJEPC) chairman Praveenshankar Pandya said he wants the global industry to spend at least as much annually on global generic promotions as De Beers used to spend before it stopped doing them completely - $200 million.
Industry analyst Edahn Golan says fine jewelry retail sales in the US in 2015 posted a modest 1.1% rise, in the November-December holiday season, sales increased 2.5% YoY. The increase is good news, says Golan, but he adds the industry should remain cautious, "we are not out of the woods yet".
"It is my belief that specialty jewellers are being taken for granted and alienated by upstream diamond players. I believe this neglect to be a big mistake as specialty jewellers are the most important partners in the promotion of diamonds as luxury. It is my opinion that luxury does not mesh well with the Internet. The concept of diamonds as luxury is not optimally transferred by a diamond report and picture. The Internet generates sales in the short term and erodes value in the long term.
Despite difficulties the global industry is facing and is likely to continue to see this year, "renewed confidence and an optimistic outlook" is necessary, World Federation of Diamond Bourses President Ernie Blom writes in a commentary in GemKonnect. "We all know that the issues that confronted the industry last year are not going to disappear just because a new year has started, but we must also realize that financial and economic challenges are temporary and it is imperative to retain a balanced outlook.
In an article identifying the major story of 2015, Rapaport's Avi Krawitz says the re-introduction of generic – or category – marketing is the paramount development for the sector. "With the benefit of hindsight, one could say many of the trade’s grueling challenges could have been met more effectively had investment in category marketing continued to be made in the past decade. Instead, the trade found itself vulnerable to a slowdown in China, unsure about selling to millennials, and facing more prudent retail inventory management.
IDEX India conducted a wide-ranging interview with Russell Mehta, vice chairman of the Gem and Jewelry Export Promotion Council (GJEPC), and CEO of Rosy Blue (India), about the current state of affairs in the Indian diamond industry. The single biggest challenge, according to Mehta, is the ‘ease of doing business’.
JCK reports: The Diamond Producers Association (DPA) has appointed Mother New York as its global strategic marketing partner. Mother New York will work with the DPA and recently appointed managing director of marketing Sally Morrison on a new campaign that will make diamonds relevant to the next generation, a statement said.
A group of Hong Kong-based Indian diamond companies have launched the Hong Kong Indian Diamond Association (HKIDA), which aims to protect and promote the natural diamond trade. Ramesh Virani, chairman of HKIDA, cited the support and commitment of the association’s 35 founding members, which include the largest Indian diamond traders and jewelry manufacturers in Hong Kong.
Rapaport writer Avi Kravitz discusses the marketing campaigns of De Beers and Signet, as well as the work of the Diamond Producers Association, as the diamond trade realizes that generic marketing of diamond jewelry is critical.
Diamantaire Ehud Laniado looks at the history of diamond marketing and how consumers can be persuaded to buy diamond jewelry. "Recent moves, including the formation of the Diamond Producers Association, are important first steps to re-energize the industry and inject new life to pull us out of the current slump we are in. It is incumbent on this, and other organizations to support the industry with universal marketing of diamonds as an eternal symbol of love and an asset which offers a potential additional path for wealth preservation in the long run.
The Diamond Producers Association (DPA) has announced the immediate appointments of Jean-Marc Lieberherr as chairman and Stephen Lussier as vice-chair, while Sally Morrison has been named managing director of marketing. Seven major diamond mining companies agreed to form the organization earlier this year to support development in the diamond sector, including engaging in category marketing. Lieberherr is managing director of Rio Tinto’s diamond business, while Lussier is chief executive officer of the De Beers Group’s Forevermark brand.
"Today, the lack of generic promotion, and the threat of undisclosed synthetics getting into the mainstream market are issues parallel to the magnitude of blood diamonds; however, at the moment there is a complete lack of collective leadership in tackling both these issues. Unfortunately, unlike the proactive action taken to tackle the issue of blood diamonds to nip it in the bud before it could really damage the industry, I believe on the current two issues, the industry has fallen behind the curve."
Russell Mehta, Managing Director of Rosy Blue India Pvt. Ltd
Shailish Sangani, writing for GemKonnect, cites the Indian government's push to eliminate the undocumented parallel economy - which by some estimates could be as much as double the size of the official, documented economy - as a contributing factor to the country's stagnating high-value (and thus diamond) consumption. The main factor he sees as impeding the growth of diamond consumption in India, however, is the lack of promotion in the wake of De Beers' termination of its brand and content-oriented marketing campaigns.
The adverts in the diamond firm's special holiday season advertising campaign will be along the lines of its former 'Seize the Day' in print, digital, and in outdoor public spaces. The original was black on white, but the updated version will use Forevermark’s white-on-black color scheme, writes JCK's Rob Bates.
Rapaport talked with Maxim Shkadov, General Director of Russia’s number one polished manufacturer, Kristall Smolensk, Chairman of the Association of Diamond Manufacturers of Russia (ADMR) and two-time President of the International Diamond Manufacturers Association (IDMA), about many of the crucial issues facing the diamond industry today.
In his latest blog post, diamantaire Leibish Polnauer applauds De Beers’ move to revive the world-famous slogan “A Diamond is Forever”, but the approach will need to be very different, he says. Polnauer argues that targetting Millennials will require an online and mobile-friendly approach, rather than TV or print ads. But most importantly, they need to be told about the facts; the stable value of our product.
De Beers’s former finance chief, who is developing a diamond mine in southern Africa, expects the industry to remain depressed this year as retail sales languish and traders struggle to turn a profit. “I don’t see the second half of 2015 being that positive,” said Stuart Brown, CEO of Firestone Diamonds Ltd. “Retail needs to recover and the midstream needs to sort itself out and that will take a bit of time. 2016 is still going to be a year of recovery.” Brown is clearly more pessimistic than some of his rivals.
For more than a century, diamonds have been a supply-driven industry. That model doesn’t work any more and the global diamond industry is now seriously hurting. (...) All these issues were brought up by speaker after speaker at the 2015 WFDB and IDMA Presidents' Meeting in Tel Aviv. Yet for all that, no one seems to have come up with a strong initiative to start wooing customers again. Everyone at the meeting seems to be content having reviewed the progress of the initiative known as the World Diamond Mark. This is actually a quality assurance and consumer confidence initiative.
Industry analyst Edahn Golan addresses the challenges facing the jewelry retail sector: from online jeweler Blue Nile's low-profit-margin marketing disrupting the retail sector to low price expectations, stagnant inventory and cluttered display cases. He sees a potential solution: "I call it the H&M model: they offer products that are highly designed of passable quality at a very affordable cost. [They] offer something that is great for the coming year.
Industry analyst Ari Kravitz presents the most salient and intertwined themes that emerged from the Rapaport conferences at JCK Las Vegas. A few key takeaways: desire for diamonds is largely dependent upon confidence in the product; this desire must be instilled and fostered; this involves improving the quality of retail and marketing content and ensuring a level playing field; and finally, confidence can only be safeguarded by reliable grading and the assurance of responsible sourcing.
The Museum of Named Diamonds formally opened (online) on June 11 with a mission to bring together the stories and emotions that diamonds represent. "Every diamond has a story, which connects it on some level to a relationship," explained Krista Olson, Executive Director. "Grading labs record gemological data. The Museum records emotions, memories, and the excitement behind the diamonds themselves. We believe these elements are no less important than the 4 c's."
Industry analyst Ehud Arye Laniado identifies four priorities for the new Diamond Producer Association to address in order to sustain consumer trust: 1. Promoting industry-wide diamond branding, 2. Containing undeclared lab-grown diamonds, 3. Tackling over-grading, and 4. Reinforcing the midstream market.
Industry analyst Ehud Ayre Laniado takes a look at the rise of vertical integration in the diamond industry, with upstream companies (like De Beers) moving downstream and downstream companies (like Tiffany) moving upstream. The challenging question is how midstream companies can play a key role in vertical integration – with options including strategic alliances and integration with players in other parts of the value chain – and how to determine whether integration is appropriate.
On his JCK blog 'Cutting Remarks', Rob Bates argues that De Beers' announcement to relaunch the iconic phrase "A diamond is forever" for its Forevermark brand might not be the best use for arguably the best slogan in advertising history. Now that the top diamond miners have formed a Diamond Producers Association, with a mandate to provide generic marketing for diamonds and a (very) tight budget, resurrecting the catchphrase would be perfect to achieve that goal. After all, Bates says, the four magical words have become an integral part of the industry, not of one single brand.
JCK News Director Rob Bates sums up what to expect or rather what not to expect from the newly established Diamond Producers Association, founded by Alrosa, De Beers, Rio Tinto, Dominion Diamond Corp., Lucara Diamond Corp., Petra Diamonds Ltd., and Gem Diamonds Ltd. Working with a relatively small US$6 million budget, and gathering from comments made by some of the founding members, Bates believes one thing is clear; it won't be a new De Beers.