It used to be that most diamonds were sold to the jet-set, a globetrotting group of people that included tycoons, captains of industry, royalty, Hollywood actors, and the like. Buying a high-cost diamond necklace or ring was an expenditure that they could easily manage financially, so it was almost a no-brainer.
Few others bought these jewelry items. Perhaps someone who did exceptionally well at the casino one night, or a person who lived in a politically unstable country and wanted a large diamond that could serve as a store of value, an item that could be easily placed in the pocket before running away, and transformed into cash after arriving in safety.
That was in the 1950s and 60s. Today you may call them the one percent, but at the time, they represented a far smaller section of society. Over time, more and more people joined the middle class, and the economy developed to provide more at a lower cost, making once-inaccessible items much easier to obtain. This process was one that can be described as democratizing accessibility. What was once available only to few becoming accessible to many.
The Shift from Jet Set to EasyJet
Today, a broad cross section of the consumer market buys products and activities once limited to the affluent. They go abroad multiple times a year on vacations, stay at Airbnb apartments, and fly on low cost airlines such as EasyJet. They do it because it make sense to them financially. It is a sound economic decision.
For similar reasons, diamond jewelry has become ubiquitous. Mass-market retailer Walmart sells affordable diamond jewelry, and on Amazon, the top selling diamond jewelry items last holiday season were also affordably priced. And yet, they are a very price-conscious segment of society. They compare prices to maximize their dollars and get more out of their vacations. And that is the reason why manufacturers and service providers are always in a race to lower their costs – so they can provide products fit for every pocket.
This is the most important consumer segment of our business, because they are our primary consumer of the future. Once, the crowd that could afford a private jet to get around was also the crowd that could afford a 3-carat diamond. Today, 3-carat diamonds are within reach of most segments of western society.
Among higher income households, there is also a big change. There are many more millionaires today than there were ever before. But most of these millionaires are not exceptionally wealthy, like the jet set of the 50s and 60s. They are also very mindful of their expenditures. Not only when considering the dollar amount value of an item, but also when considering the social and ethical costs of what they buy.
Together, these two are growing consumer groups that do not want to spend, but instead want to use their finances wisely. They want to be sure that the purchase they are making does not come at the expense of hard-working people, and most definitely is not exploiting them; they want to know that the environment was not harmed, or that the harm is mitigated. They want assurances about the integrity of the process that generated their product. On top of that, they want their purchase to be more than just a purchase: ideally, they hope, it will become a value-preserving item that can later be sold.
Changes and shifts in society are natural and expected. The democratization of consumer products, diamonds included, means a major shift in marketing, and every industry has to act accordingly. It looks like most industries have made the proper adjustments, but has the diamond industry?
It's not about adjusting manufacturing of diamonds and jewelry. The prevalence of the above-mentioned jewelry items are proof that those changes did take place.It's about marketing. Have we adjusted our marketing in such a way that it targets the much wider range of consumption, and the interest in diamond jewelry that retails for less than $100, as well as for $100,000? Have we adjusted to production and manufacturing procedures that allow for both mass production and ethical, responsible and environmentally-friendly products? Are we catering to buyers who want to buy reasonably-priced diamonds that are resalable as well?
To some degree, the answer is yes on all counts. We are clearly able to sell low-cost and very high-priced diamonds. We are meeting higher ethical, labor and moral standards, and we can do some more to improve even further. As for the last point, providing resaleability, this last point is a yes too, but a far less resonating one.
In order to make diamonds resalable, we need to improve transparency. We need to be transparent in the process of mining and polishing, more transparent in disclosing the way we price diamonds (including the components of diamond price setting) and we need to offer an easily trackable value timeline and pricing system that will allow sophisticated consumers decide if selling a diamond at a given point is a sound move.
Adjusting Marketing to the Change
Diamond marketing has to be adjusted to today's consumer, a different consumer than the one we catered to in the past. We cannot rely on old perceptions, and old traditions are not "doing it" for today's consumer. They want us to use a very different language. Issues of provenance and fair trade were not part of the lexicon a few years ago, but today we need to take them into account. Transparency all along the diamond pipeline is of great importance. While some in the industry see this process as painful and undesirable, we can only benefit from it. By building trust, we will bring potential costumers closer.
It is the indusrty who needs to change and adapt, because consumers are not holding on to the old tenets.
We should make consumers of all walks feel comfortable spending their hard-earned money with us, and give them an excellent reason to do so. The way to achieving this is by approaching them correctly, and by keeping their reservations, needs and concerns in mind.
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