One of the most promising developments for the global diamond and jewelry industry over the past year was the foundation of the Diamond Producers Association (DPA). Established by ALROSA, De Beers, Rio Tinto Diamonds, Dominion Diamond Corporation, Lucara Diamond Corporation, Petra Diamonds Ltd and Gem Diamonds Ltd, and led by industry veterans, it targets a rise in consumer demand for diamonds and diamond jewelry.
Led by Chairman Stephen Lussier, a long-time senior De Beers executive and President of the diamond giant's Forevermark brand, and CEO Jean-Marc Lieberherr, formerly head of Rio Tinto's diamond division, the DPA recently outlined its much-awaited campaign strategy and slogan at a special presentation at the JCK Show Las Vegas following six months of in-depth work. The slogan that the DPA has selected is "Real is Rare. Real is a Diamond".
The DPA's marketing strategy targets so-called Millennials – aged between 18 and 35 – who the DPA feels have not been targeted by diamond jewelry advertising and are not aware of the diamond industry's messages regarding precious gems. The DPA initially started out last year with a $6 million budget but with widespread comments that the figure was nowhere near large enough, that figure is being doubled, Lussier told the JCK presentation. The DPA presentation followed six months of work, including in-depth research into millennial buyers.
Lussier said the DPA's target was to bring "the diamond dream" to a new generation and get them to take on board and accept the symbolic and emotional role diamonds can play in their lives. Meanwhile, DPA CEO Jean-Marc Lieberherr spoke of three goals for the campaign: to create an ongoing emotional connection with current and future diamond consumers, to construct trust and confidence in diamonds and the gems trade, and to develop further the diamond trade's business practices from mine to market.
The presentation spoke about millennial consumers' "double-edged diamond perceptions", with an ambivalence about diamonds. They have a reluctant attitude to diamonds, seeing them as part of past generations' desires and do not want diamonds imposed on them.
On the other hand, diamonds could fit with millennials' desire for real connections and real experiences since their digital lives were missing real human connections. Stephen Lussier also stressed the value of diamonds being inherently rare, precious and having enduring value, as opposed to lab-grown stones.
The Millennials campaign is part of the DPA's wider aim of creating demand among consumers for diamond jewelry and for polished diamonds across the world. The aim is to create a ripple effect throughout the industry: higher demand for diamond jewels will mean bigger sales of polished stones by traders and manufacturers to jewelry makers and others.
The body was set up after the world's main diamond producers realized that diamond jewelry was being left behind in the race for consumers' disposable income across the world, especially in the United States and Europe, as the public developed a taste instead for smartphones, tablets and fancy vacations. There has been no program of unified worldwide generic promotion of diamonds and jewelry since De Beers decided around eight years ago that it was no longer in a position to spend around $200 million annually on advertising diamond jewelry on behalf of the global trade.
With De Beers' share of the global supply of rough falling to less than 40% in recent years from 80% just 20 years ago, and before that for around 100 years having almost a total monopoly on rough supply, the giant miner came to the conclusion that it was no longer its role to serve as the industry's custodian. Instead of promoting diamonds generically, it decided to slash its marketing budget and concentrate instead on its Forevermark brand. It is estimated to spend around $100 million per annum on marketing Forevermark.
The DPA's unveiling of its campaign to target millennials – people born between 1980 and 2015 – including extensive surveys and focus groups conducted by its marketing firm, Mother New York, came as little surprise. Millennials are being targeted by many different industries and new research and campaigns are an almost daily occurrence judging by the global media coverage of the topic.
However, there is a huge gulf between creating a campaign and actually succeeding. Although millennials are potentially an enormous market, they are also a difficult one to crack and with many potential problems. They have generally graduated into a tough and uncertain economic climate. In the United States, stories are legion of student debts putting new graduates into a precarious period of some years while they live frugally and try to pay off the debts. They are faced with considerably more debt and fewer job prospects than their parents' generation. Consequently, they are less likely than previous generations to own their own home and more likely to feel about their financial prospects. Ironically, however, despite the financial constraints, they are generally optimistic and upbeat.
Regarding diamond jewelry specifically, research finds that millennials consider diamond jewelry as being “too formal” and that diamonds may appear to their peers as being rather blingy and ostentatious. The millennials value experiences rather than material possessions and when they do buy something, they want it to have a significant personal meaning.
As Thomas Henry, a senior strategist with Mother New York told JCK Online: “If you think about the fact that they are living in an oversaturated world, they are desperately seeking these moments of meaning, which are few and far between, what they love about diamonds, and what we heard over and over again, is the authenticity. [Diamonds are] a product that they still believe carries authenticity, they are from the earth, they are very rare. That is an exciting opportunity. The way that millennials live their life now opens up a lot of space for diamonds,” he concluded. “It is just a very different space than diamonds used to occupy through most of the 20th century.”
Clearly, it is still a little early to draw any conclusions about the success or otherwise of the Diamond Producers Association project. However, it is an excellent sign for the industry that it is aware of the need for such a grouping and created a professional staff to start the process.
By our Israel correspondent Abraham Dayan
