The star that opened the day’s discussions at the GIA Conference was Steve Forbes – chairman of the Forbes Communications Group and the chief editor of Forbes Magazine, writes former managing director of the Israel Diamond Exchange Yair Cohen at www.israelidiamond.co.il. Listening to him speak was an experience in itself, since Forbes is not only a great speaker with exceptional rhetoric talents but also has interesting ideas and knows how to express them.
In his speech, Forbes addressed business economics and the growth of the American market, touching on the diamond and jewelry sectors. In response to a question, he noted that sometimes buying gold, silver and diamonds isn’t done as an investment but rather to maintain a sense of security, especially in times when economic and/or political stability is threatened and people are seeking an economic anchor to cling to in the face of economic vacillation and uncertainty.
Forbes also discussed the issue of conflict diamonds and made it clear that ways must be found to deal with the issue besides boycotting the product, which he said solves nothing and causes economic damage to African nations and other parts of the world.
The first speaker of the conference addressing this subject was significant in that the dominant issue in the discussions was consumer confidence. In my opinion, it was important that this issue was addressed by someone from outside the diamond industry and from the American market, the largest consumer market in the world.
No Confidence
Especially interesting was the speech by Ken Royal, a senior manager of customer service in the Gallup polling company, who told the conference about a poll conducted by Gallup to determine who were the most trusted professionals in the eyes of the consumer.
The poll found that the most trusted professionals were firefighters, with 90% (they have doubtlessly risen in the American estimation since 9/11); followed by nurses and military personnel. Jewelers were at the bottom of the list, with only 20%, alongside lawyers, with only mechanics and lobbyists ranking lower.
Such a low expression of trust in jewelers by American consumers leads us to consider the need to develop consumer confidence. One of the models presented looks like a pyramid, which is built on the trust of a consumer in the person who is selling to him. Above this is the buying experience (the feeling that I’ve bought something good that was worth what I paid.) Above that – the product’s prestige (the response from the surroundings after it is purchased) and finally, the desire for the product (an experience that is seen in other products the consumer wants to buy.) If all these stages are correctly built, we get a positive buying experience, which could bring in future sales.
Ken Royal explained that, at the beginning of 2011, the Consumer Confidence Index turned positive. The upward trend received an additional push after the assassination of Bin Laden. This index backs up our industry’s feeling that the American consumer is indeed returning to the jewelry store and that the highest earners are once again buying jewelry.
There is Confidence
Vice President of Retail at Van Cleef&Arpels, Nicolas Luchsinger, also discussed the importance of consumer confidence. He told us about a customer who ordered a piece of jewelry in March 2010. The preparation of the jewel was so complicated and took so long that the customer received it a year later, in March 2011. The fact that a customer is prepared to trust his jeweler for such a long period of time and believe that he’ll still be here a year from now indicates great trust. Of course, we must remember that Van Cleef&Arpels is an enormous, veteran brand, but that does not detract from the message of the importance of the consumer’s confidence at every point along the diamond chain. This is true whether we’re talking about the final jewelry consumer or the diamond consumers – that is, the diamond buyers, jewelry manufacturers and jewelry retailers.
Luchsinger also shared with his listeners the benefits of how his company had addressed the global financial crisis. Rather than seeing the crisis as a fall, the company decided to take drastic marketing steps - for example, inviting customers to spend a week in Paris. Along with the events, the customers also had a jewelry buying experience. As a result of this and other similar activities, Van Cleef&Arpels sales rose even during the consumer crisis.
