The world has been watching in anticipation as the newest installment of the Star Wars franchise has hit cinemas around the world. The power of the Star Wars brand has exploded in recent years to the point where the movies themselves have somehow become secondary to the growing maturity of the brand. Modern branding has become perhaps the most powerful force in retailing, no pun intended.
Much has been made in recent years in the diamond media of the need for branding. It seems like everyone is extolling the virtues of branding for diamonds, but only a select few have been able to achieve notable success and brand awareness at the consumer level. Over the years, there have been many branding initiatives, several of which have been hugely successful.
So far in my survey of diamond retail, we have looked at the demographics of the industry and the variables that influence profit margins for retailers. We have seen how both marketing and modern technology are changing how retailers sell diamond jewelry and how all of this has affected the consumer shopping experience. In this final installment of my series exploring diamond retailing, I want to take a closer look at the approach to branding in our industry.
What is a brand?
This seems like a simple question but in truth, the answer is anything but. One of the better known definitions of a brand comes from David Ogilvy, often dubbed “The Father of Advertising”: A brand is “the intangible sum of a product's attributes: its name, packaging, and price, its history, its reputation, and the way it's advertised.”
Branding is a confusing subject, and even experienced marketers don’t always clearly understand it. But with diamonds, as with almost all consumer products or services, branding is critically important. It can mean the difference between a thriving business or a mediocre one…or worse.
At its core, a brand is a commitment to consumers. It tells a consumer what they are getting, or what they should expect to get, when they purchase and use a product. However, consumers, not companies, build brands. It doesn’t matter what you think your brand promises to your customers, it only matters how they perceive it.
I like to think of a brand as what is left after a particular marketing initiative is over. Marketing can help steer customers to buy a product, but they will only become repeat buyers if the product lives up to the promises of that specific marketing campaign, whether with regard to quality, durability or any other product characteristic.
As if the concept of branding was not complex enough, diamonds involve additional nuances for retailers and consumers to consider. This means that branding in our industry can take many forms. There are three key elements of branding that are crucial to specialty jewelry retailers:
1. The branding of the diamonds
2. The branding of the jewelry
3. The branding of the retailer.
Each of these can be a strategy employed in isolation, or in some cases, they can be combined to achieve additional leverage. Let’s take a closer look at each.
The Branding of Diamonds
I have discussed extensively the need for our industry to go beyond the 4Cs. The vast majority of consumers have been conditioned to believe that two diamonds with the same 4C characteristics are essentially identical. In such cases, price becomes the only other consideration for consumers when selecting a diamond. I believe that nothing could be further from reality. Relying only on the 4Cs to encapsulate the virtues of a diamond is hurting the industry.
The branding of diamonds is one way that can help to overcome this, provided it is done in an intelligent, and most importantly, a transparent way. Diamond branding can take a few forms, but the most prevalent are brands created around a particular diamonds quality, its cut, or its source, and in a few cases, brands are created around all three attributes.
For example, the Royal Asscher cut has been patented, and is distinct from the square emerald that is often referred to as an “Asscher” and from which the Royal Asscher cut was conceived. Part of the Royal Asscher branding includes a strict set of standards for the manufacturing proportions. These standards give consumers confidence that they are purchasing diamonds that meet a strict set of criteria beyond the 4Cs.
Interestingly, one of the outcomes of the De Beers “Supplier of Choice” sales methodology instituted in 2000 was the entrance of a plethora of new diamond shapes into the market. In fact, part of the De Beers strategy was to offload some of their historical marketing efforts onto other downstream players, thus encouraging manufacturers to develop their own diamond brands surrounding the new cuts.
Hearts on Fire, the company purchased by Chinese diamond retailing giant Chow Tai Fook, markets itself as “the world’s most perfectly cut diamond” and has developed standalone Hearts on Fire retail stores, as well as selling its branded diamonds through other affiliate retail outlets. Hearts and Arrows, as another example, has opted for the latter route, selling its branded diamonds through various retail stores that chose to carry the Super Ideal cut stones.
Taking a different approach, CanadaMark is an example of a branding initiative based on a diamond’s origin. CanadaMark, which is owned by Dominion Diamond Corporation, one of the largest diamond mining companies in the world, guarantees a diamond’s origin in a Canadian mine, which can be tracked through a series of audit processes from the mine through to final manufacturing. The initiative also guarantees customers that the diamonds were mined only by employees working under ethical and fair employment standards.
Forevermark is an example of a branding initiative that attempts to hit all three elements: the diamond’s quality, cut, and origin. Much like its competitors, the De Beers brand is sold through a network of De Beers boutique stores and other specialty retailers. According to the company, Forevermark diamonds go through a rigorous quality control process to ensure that they qualify for inclusion, and less than 1% of the world’s diamonds are suitable for the brand.
The Branding of Jewelry
Jewelry designs are quickly becoming an important point of distinction in the retail space. Consumers typically lack the knowledge and skill to identify the subtle differences and finer points of distinction surrounding jewelry’s craftsmanship or quality, so a brand name can help them to differentiate products in a crowded retail space. There is strong evidence to suggest that consumers are responding positively to branded jewelry. Research from De Beers shows that claimed acquisition of branded engagement rings in the US jumped from 7% in 2002 to 33% in 2013.
US jewelry manufacturer Tacori is an example of a company that has built a strong reputation for its designs and craftsmanship, which has allowed it to expand without operating its own retail outlets. Tacori manufactures all of its jewelry in its own facility in California, and sells its products through a network of retail partners. Each Tacori piece comes with an ‘authenticity card’ and care instructions. This gives the consumer further peace of mind, and has proven to be a successful strategy that other manufacturers have begun to emulate.
Some jewelry brands are capitalizing on the millennial generation’s propensity for brand loyalty. Thea, a line of personalized diamond jewelry from designer Emilie Duchene, has targeted younger consumers using pitches from youthful celebrities like Taylor Swift and Jessica Alba. Thea product lines have been financed using crowd-funding platforms such as Kickstarter, which have strong visibility among millennial buyers.
One of the most successful branded jewelry lines of all time is Pandora. Over three decades, Pandora has grown from a single store family run business founded in 1982 by Danish jeweler Per Enevoldsen, to a publically traded multi-national corporation currently valued at over $14.7 Billion. The company was built its foundations by offering charm bracelets and a large variety of gold and silver charms. It has since expanded its offering to include some pieces with diamonds, as well as other types of jewelry including necklaces, earrings, and rings. Pandora has not yet entered the bridal market.
The Branding of the Retailer
When a retailer can achieve mass recognition and establish a perception of value based on the store itself – this is what we might call the holy grail of branding in diamonds. It takes a long time to achieve, sometimes decades, and is built on an enduring commitment to a standard of quality and service that can be replicated across the company.
There are many good examples of companies that have been highly successful over the long term through a commitment to quality. I have written in the past about Harry Winston, Chopard, Van Cleef & Arpels, and other ultra-premium luxury diamond brands. These companies’ names have come to define the quality of their jewelry, and the quality of their jewelry defines their names. These jewelers do not need to develop specific branding around their diamonds or jewelry, as their heritage guarantees that only the finest diamonds will be used in the jewelry, and the craftsmanship will be among the finest in the world.
In a fragmented diamond retail space, only a few can achieve brand prowess at the store level. It should come as no surprise that Tiffany & Co has one of the largest Facebook followings of any luxury goods company, and certainly the largest among specialty jewelers. A Tiffany engagement ring presented in a “little blue box” is perceived by many to be superior to the same ring in a different package, and many will pay a significant premium to gift that box to their loved ones.
To be sure, branding is a very important force that has proven over many decades to strongly influence consumer buying behavior. While not every diamond retailer has a century of experience in building a brand name for its store, even independent retailers may opt to carry branded jewelry lines and diamonds that can appeal to their customers. Branding might look a little different to each individual business, but most would stand to benefit from injecting some of the power of brands into their portfolio.
The views expressed here are solely those of the author in his private capacity. No one should act upon any opinion or information in this website without consulting a professional qualified adviser.