From a flagship emporium like Tiffany's, to the backroom mom and pop diamond shops, marketing is the anthem for an industry chorusing that it may loose its edge. When De Beers controlled the most of the worlds diamonds, supply and demand was easily manipulated: De Beers could make diamonds more rare simply by not putting them on the market. At that point, De Beers controlled 80 percent of the diamond supply. Now it controls just 66 percent; and without a powerful cartel controlling the flow, many more diamonds are available.
In an ironic twist of fate, the diamond district's purveyors are being nudged by De Beers into being the promoters of a more freely traded product. These nudges feel like tidal waves, says Rob Bates, who follows diamonds for Cahners publications. To explain: Gucci, a luxury retailer, spends about fifteen percent of its profits on marketing. In comparison, the diamond industry spends only one percent.
Bates flipped through a recent issue of JCK, the jewelry magazine and pointed out a recent article on De Beers new 'marketing strategy seminar 101' Igniting diamond desires.
Explains Bates, "It's basically about the seminars for the sightholders; a lot of these guys aren't marketing-savvy and De Beers is holding seminars for them." Bates acknowledges that while most middlemen in the business spent very little on marketing, De Beers is forcing them to learn how.
De Beers practically invented diamond marketing: a diamond is forever is the most recognized ad slogan line of the 20th century, according to Advertising Age. Ninety percent of all Americans know it.
Yet, right now they're spending millions on a campaign that doesn't even include the De Beers name. It's just like pork 'the other white meat' or the milk as you see it on mustachioed celebrities. The ad agency J. Walter Thompson is in charge of a De Beers website called AdiamondsIsForever.com. Their site is accessible to anyone who can go on-line; and Senior Account Executive Ann Ritchie hopes that it will be high-end platform. She says you shouldn't have to be a jeweler or a dealer to look at a diamond ring from every angle.
The ADiamondIsForever.com website gets 200,000 visitors a month. Each spends an average of twenty minutes on line. Most of them are in the target market: women, 18 to 34 years old.
Ritchie explains that she's heard women talking about how much they enjoy the Web site, and that they email their friends with engagement ring designs.
But could a diamond by any other name shine more brilliantly? More ardently? De Beers may not be putting its name on diamond products now, but that will change. Branding means associating a diamond with a high-end merchandiser like Givenchy, or Prada, or, how about a De Beers diamond? Gucci spend fifteen percent of its profits on marketing, the diamond industry, one percent.
De Beers wants to exploit the changes in the market from both directions. It will sell its own diamonds directly to the public: industry analysts say that within a year or two, there will be a flagship De Beers store in London.
Andrew Lamont, with De Beers says, "If you look at the watch industry, as an example, people instantly recognize big brands: Rolex, Omega. There's exciting marketing innovation. These are the sorts of things which help raise the tide to lift the ships."
Next: The Fate of the Middlemen