Branding Brainstorm

May 1999


Branding Brainstorm

Professional Jewelerpoll shows concern about the possibility of De Beers selling branded diamonds

"It's an idea that's been a long time coming."

"Branding will be a bad thing for jewelers."

Those diverse views represent both streams of thought in the debate over De Beers' decision to test-market branded diamonds in England. That test – being conducted by Boodle & Dunthorne, an upscale retailer – reportedly is meeting with an "excellent" reception by consumers.

The test has captured the attention of jewelers worldwide, some fearing they won't be able to compete if De Beers rolls out a full branding program after the test is completed, others feeling such branding would breathe new life into their diamond sales.

Both sides have made their feelings known in private discussions and publicly on the Brainstorming page of Professional Jeweler's Web site []. The Brainstorming participants are 2-1 against branding at this time.

Here are the major questions raised on-line and in telephone interviews.

What Is the Meaning of Branding?
"What will the brand stand for in the public's eye? Does it offer superiority?" asks Bill Underwood of Underwood's Jewelers, Fayetteville, AR. Marion Halfacre of Traditional Jewelers, Newport Beach, CA, says diamond branding can't be compared with a brand such as Cartier: "A diamond doesn't have a distinct look." One jeweler says branding is here now. "Diamonds are, in effect, already branded by the Gemological Institute of America," says John Green of Lux, Bond & Green, West Hartford, CT.

What Would Quality Standards Be?
"If it [the brand] is truly used only for better-quality diamonds, it can add value," says Georgie Gleim of Gleim the Jeweler, Palo Alto, CA. Some wonder what sizes would be branded and what the minimum criteria of the other C's would be. De Beers says the diamonds are high in all four C's, but has yet to be specific.

How Would the Brand Be Displayed?
The brand can be seen on the girdle through a special microscope reportedly costing $5,000. Lee Berg of Lee Michaels Fine Jewelers, Baton Rouge, LA, says branding is "only as good as the viewer. If you don't have the viewer, you can't see it [the brand]. If you drive a Mercedes and wear a Rolex, people can see them. No one will see 'De Beers' on the diamond." Underwood says he'll probably buy the equipment, but Barbara Hight-Randall of Hight & Randall, Rochester, MN, asks, "Who can afford the machine? It's a stumbling block for stores like ours."

Would There Be Premium Pricing?
John Cohen of Carlyle & Co., Greensboro, NC, wonders whether it would cost more to get the branded diamonds. He's also concerned the branded diamonds would be more heavily discounted. On the other hand, Mark Moeller, R.F. Moeller Jeweler, St. Paul, MN, says consumers are willing to pay a premium for other branded goods. Gary Gordon of Samuel Gordon Jewelers, Oklahoma City, OK, thinks branding will help jewelers sell diamonds, even if they are more expensive – "It's one more thing to talk about."

Would Branded Diamonds Affect the Sale of Non-Branded Stones?
Jewelers with a reputation for quality and integrity say they can sell branded or unbranded diamonds. Moeller doesn't think it would change the market at all for unbranded stones. Cohen disagrees: "This could hurt unbranded diamonds – those you're trying to sell and those that have been sold. It could hurt the confidence of the diamond market if a customer thinks the diamond he bought earlier would be worth less."

Would Branding Help Jewelers?
Walter Ife, a New York City marketing consultant who formerly was with the Diamond Promotion Service, says jewelers "who are aggressive and progressive will see it as an opportunity to help overcome consumer fear and suspicions about diamond buying while selling a quality diamond at a premium."

Would De Beers Sell To Consumers?
Dale Perlman of King's Jewelers, New Castle, PA, wonders whether De Beers might sell the branded diamonds directly to consumers. Francis Kisner of Kisner's Gems, Towanda, PA, feels De Beers' control of the flow of rough diamonds has been good for the industry, but "let us not make the error of expanding market control through the cutting and distribution levels." Steven R. Martin of M. Martin & Co., Chicago, IL, offers an even tougher view: "De Beers is using branding to protect its channels of distribution."

In the end, most jewelers who have a clear identity and a reputation for integrity feel branding will make little difference with their clientele. "It's more important for me to sell branding of myself and my store," says Marion Halfacre. Perhaps the strongest feeling comes from David Rotenberg of David Craig Jewelers, Langhorne, PA, who freely admits he's antibranding. "I don't want anything in my store with someone else's name on it. We're selling David Craig Jewelers. Period."

De Beers is expected to continue the test through summer, then may expand it to other markets. Before making a final decision, De Beers says it will consult with all sectors of the trade.

Next month: dealers tell how they think branding will affect retailers.

by Jack Heeger


Copyright © 1999 by Bond Communications.


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