"I began charting out my vision for a future for diamonds, in which they serve as a wealth preservation tool. It is a broad vision, and I want to start discussing how I think we should get there" Ehud wrote in a post in January 2017.
Financial institutions are another key stakeholder in the diamond supply chain, which Ehud believed expected greater transparency from the diamond sector.
"Bank financing is the lifeblood of the industry. Without it, there would be no money for exploration or new store openings," Ehud stated in 2015. He also stressed the need to boost confidence in the diamond industry. This lack of confidence is evident in, for example, the decline in available bank financing over the past several years.
Beyond diamond players, Ehud explored other supply-side topics that have sparked debates over the years where he believed that similar to demand-side issues, greater transparency is central to address them. Lab-grown diamonds provide a good example.
While their emergence was accompanied by rising concerns across the industry, Ehud believed lab-grown diamonds can play a complementary role to that of natural diamonds, provided consumers gain a better understanding of the inherent value of natural diamonds.
As another possible way to solve the problem of fragmentation in the diamond sector beyond consolidation, Ehud encouraged the industry to explore strategic alliances.
"Looking at other industries, there appears to be various ways to address the challenges of excess fragmentation in parts of the diamond sector. One option our sector can consider, especially given the slow trend in consolidation between players, is to make more use of strategic alliances."
Ehud explored possible methods of addressing the issue of fragmentation, drawing in part on lessons from other industries.
First among them was simply consolidation, whether natural or through mergers and acquisitions.
Delving further into the issue of fragmentation in the midstream (manufacturing) of the diamond sector covered in last week's post, Ehud said in August 2015, "The more we examine the facts, the clearer it becomes that the main problem faced by the diamond industry is that the midstream – the manufacturing sector of the diamond pipeline that mainly polishes diamonds – does not get its fair share of the pie."
In addition to improving pricing transparency, Ehud believed that the diamond industry should also tackle the other issues that have led to a decrease in trust in the sector as a whole.
Improving the pricing transparency of polished diamonds is the first part of the two main components of the Crystal Clear philosophy. The other part, driven by the first, is the ability to then determine the prices of rough diamonds.
The rationale that Ehud used here was that, ultimately, it is consumers who determine the price of a rough diamond based on how much they are willing to pay for its polished output.
The introduction of a transaction-based polished diamond price list is possible. The Mercury Diamond™ Price List which Ehud founded, provides wholesale polished diamond prices based on transaction prices in the wholesale market.
A key component of Mercury Crystal Clear™, the diamond pricing system which Ehud founded, is expanding consumer knowledge of diamond characteristics beyond the 4Cs (Carat, Color, Clarity and Cut) known to the ordinary buyer.
"The importance of a transparent and easily understood pricing system for diamonds cannot be stressed enough. For many years, the general press and many consumers have been stating that the misunderstood differences in diamond prices are a turn-off."
When considering diamond shapes, Pear-shaped goods are quite a popular shape in the Far East, but one of the least popular diamond shapes in the US consumer market. That is unfortunate because they are one of the best-looking diamond shapes, and they provide a surprisingly good value.
Diamonds are polished into a variety of shapes. The choice of shape is mostly one of taste, best use of the pre-polished rough diamond, and, at times, color. Most call a diamond's shape "cut." However, since January 2006, the term "cut" has referred to the proportions of the diamond, its Cut Grade, and the term "shape" has since been the term for the form or contour of diamonds.
When considering the requirement to create a critical mass of buyers of diamonds for wealth preservation, Ehud drew many parallels with what is also required to reinvigorate traditional consumer demand for diamonds in both cases, transparency sits on, or perhaps trumps, the podium.
According to Ehud, education, like marketing, is an essential component in creating a critical mass of believers in diamonds for wealth preservation.
To reach a critical mass of believers in diamonds for wealth preservation, Ehud believed it was also essential for the industry to recalibrate its marketing efforts.
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