Under the leadership of Gareth Penny, the DTC concluded that promoting diamonds by educating consumers about the four C’s was a mistake. By removing the mystic and deconstructed diamonds to their mere technical elements, this resulted in the loss of their emotional value. To bring the emotion back, diamond marketing led by the DTC in the coming year will put a strong emphasis on the natural origins of diamonds and the passion they represent.

Stephen Lussier, DTC’s Worldwide Marketing Director, spoke with IDEX Online about marketing, natural diamonds, and the Right Hand Ring – who really buys them?

 

There is a feeling among many in the industry that we are so deep in the woods of diamond marketing that we are perhaps missing out on the trees of individual concerns. For example, how aware is a 20-something consumer of Conflict Diamonds when he goes out to buy an engagement ring? Some argue that he will buy a diamond ring because that is what you buy when you get engaged, regardless of his knowledge of civil wars in West Africa.

 

An examination of what consumers are looking for when performing searches on diamond retail websites reveals that they are very well-informed, defining their search in very specific technical terms. For instance, how much fluorescence their diamond should have (as little as possible is a common request).

 

But even though the average gift diamond buyer is educated in the four C’s and beyond, familiarity with the politics of the industry is less wide spread. What about lab-made diamonds? Do consumers really fear they will buy one unknowingly while paying the higher price of a natural diamond?

 

Lussier does not think anyone is really concerned in principle about synthetics, saying they can peacefully co-exist with natural diamonds, but there is a need to address this. The focus should be on three key elements: detection, disclosure and differentiation.

 

“Detection means that the consumer wants to be absolutely confident that the industry can detect one from the other. If one is very inherently valuable and expensive and the other is much less, the consumer wants to know: are you certain you can tell the difference. Detection is crucial,” he says.

 

He places disclosure in the hands of retailers, calling the ‘Well, maybe we will tell them, maybe we won’t, we’ll tell them only if they ask,’ approach wrong.

 

“The synthetic is a viable product, it should be sold as what it is and priced accordingly and consumers will decide [which product they want]. Trying to confuse them with the name is not ethical and retailers should play this game straight.

 

“It’s important to differentiate between the two products. If we blur them we risk both products. Diamonds will always be much more expensive because they are inherently rare. In time, the price of synthetics will fall as with any technologically driven product. It was true for CZ, true for computers and cell phones and, in time, the same will happen with synthetics.”

 

What kind of marketing campaign is DTC planning in order to emphasize the natural aspect of diamonds?

 

“We have been focusing more of our public relations activities on that because to a great degree it makes people feel good about diamonds. If you check consumer groups, they will tell you that diamonds are precious and that is why they want them for this important event. But if you ask them why, they can’t remember. If you remind them then it makes them feel better about it, it makes it feel even more precious. It got to the point that they take it for granted.

 

"We hear it in many categories outside of diamonds like with Coca-Cola, where people forget the roots of the brand, why use it.”

 

The DTC will remind people why diamonds, that is, why natural diamonds. But it feels it should be a group effort and not fall just on the shoulders of De Beers. As an example of what can be done on the PR front, increasing the message, he cites a recent event by the group, the Diamonds/Nature's Miracle, “in part to get the journalists around the world to get focused on this idea”. The idea being that diamonds have an inherent value coming from nature and not being created any more. “We need more activities like that. We need to bring that up.”

 

What role is the DTC planning on taking, then? Are they waiting for some other diamond industry body to take the lead? “I think we are prepared to take the lead on this, what we don’t want to do is everything. We don’t feel it’s our role to do everything. We will lead by talking not only with the other major producers but also with the big retail groups, and others that have a vested interest in making sure that the inherent value of the diamond, that the perception of the diamond, is maintained with the consumers.

 

“We started to participate in different industry groups, all of which will have a different role in this area. Again, this is just reinforcing this concept of disclosure, detection and differentiation. “

 

Another way of promoting diamonds, is marketing. With Supplier of Choice in full swing, Lussier is encouraged by marketing efforts, putting the emphasis on quality marketing.

 

By quality he means the sort of marketing that will bring consumers into our segment and away from the competitive industries as opposed to the sort of marketing where a person already wants a diamond and the marketing effort is to lure the consumer to your store. “Quality marketing is about category enhancement and that continues to increase in double digit rates in 2004,” he says.

 

And the results? Are we getting consumers to spend their money on diamonds, are we gaining an increased market share at the expense of other luxury items? The answer is yes, but it’s not clear if it is purely because of marketing efforts.

 

“The last three and a half years have been a dreadful time for the luxury goods industry worldwide, it was probably its worst period in 20 years, and the diamond business did pretty well during that same period, so we gained significant market share. But what I don’t think our marketing, and the success of our industry marketing, has decreased the sales of the other products. I think they had their own economic problems – very dependent on tourists and tourism for a significant part of their business and post 9/11 and other issues, tourism was weak. So I think that’s really what impacted them.

 

“But it does mean that we were not impacted to the same degree, we have been able to maintain growth at a time of real difficulty. I also expect they will come rolling back and continue to grow faster then we. I think they will grow faster in the years ahead than the diamond jewelry market, because inherently they are, better marketers then we are. Much more sophisticated, greater investment, ability to expand stores, [there are] a lot of reasons why they’ll grow.

 

“The key thing to me is: can we continue to do better then we would have done if we didn’t have this more marketing orientated strategy.

 

“We have got to keep reminding ourselves that business in the second half of the 1990s was bad. We didn’t grow at all through that period of time until the millennium. We had no growth, and now we have been growing at a really respectable rate through the first half of this decade. Can we grow at the double-digit rates of the luxury goods? I do not think so. We are too big a business and too mature, but we have every ability to grow strongly at 4, 5, 6 percent worldwide per annum. That’s what we should target.”

 

These are candid words on the results of the diamond industry’s (led by De Beers) success in gaining an increased share of the luxury market. But what about specific efforts, like who buys Right-Hand Rings? Surprise - everybody.

 

Lussier says men buy them for Christmas, “It’s a bit like a set of golf clubs,” he says. They are marketed to men, but wives buy them as a present.

 

“Right-Hand Rings aren’t really primarily about women and what it means to women, but women are quite happy to acquire it for themselves, or acquire them through the normal gift opportunities.”

 

“[The Right-Hand Ring campaign] did two things. It gave women ‘permission’ to buy it for themselves, if that’s what they wanted, and they felt a little odd buying a diamond for themselves because an engagement ring is such a strong emotive symbol. It also raises the profile of an existing category which has been slow, which is the more design orientated, non-commitment ring. And by raising that product category it does give men something else to buy. If they bought everything already and this is the next thing she wants, it makes her happy. That’s what we live for.”