Good News About Diamond Business
You can take advantage of De Beers' Supplier of Choice program to ask for more promotional support
New opportunities are on the horizon for jewelers who are strong in diamonds. De Beers Diamond Trading Co. has acknowledged historically thin advertising and promotional investment for diamonds compared with other luxury goods and, as a result, introduced a Supplier of Choice program that requires clients, called sightholders, to help create demand for their goods.
For generations, De Beers controlled the worlds diamond supply and set prices with monolithic strength. But competition has set in, and De Beers supply management model is no longer viable. The companys shift to the Supplier of Choice program caused fear and confusion among the privileged community of sightholders whose businesses and livelihoods were handed down as birthrights. Now a sightholder must qualify to continue as a Supplier of Choice.
DTC made concessions on sightholder prices, but the increased sightholder margins are earmarked for branding and value-added initiatives, both of which are complex marketing disciplines in which sightholders generally have little expertise.
The purpose of branding is to increase the perceived value of a product and, therefore, the amount a consumer will pay for it. De Beers itself has licensed the De Beers brand name to LVMH Moet Hennessy Louis Vuitton, a powerful luxury goods marketer that will likely open De Beers diamond stores and sell De Beers-brand diamonds through high-end jewelry stores.
An Opportunity for Jewelers
De Beers actions could be beneficial to retail jewelers as initiatives are put in place to increase retail prices and spur diamond companies to invest more advertising and promotional dollars to support these higher prices. Though most sightholders dont have the funding or expertise to develop full-scale national branding support for their products, they can provide promotional support to individual jewelers. Thats an opportunity.
If you work with a sightholder, discuss creative ways you can work together to improve your diamond unit volume. If your store does high volume, is upscale and well-regarded in your region, ask for a laser-inscribed private label on your diamonds. Ask for allowances that will enable you to promote your diamond department. Ask your suppliers to sponsor store events to which you may invite your best customers. Ask them to develop special packaging and displays unique to your store. The possibilities are limitless as long as they increase volume and support higher prices!
We can learn from other luxury goods marketers who have succeeded even in the face of adversity. For example, they:
- Maintain an unwavering focus on the consumer. They find out what consumers want and get it to market fast. Consider how your sightholder can help you enthrall consumers and keep them coming back.
- Diversify their customer base through product line extensions and by acquiring complementary businesses. Perhaps your sightholder can source products other than diamonds for you.
- Partner with other marketers to develop added value for their products. Ask your sightholder whether he or she plans any copromotions that would help your business.
- Invest in technology. Almost every business has computers, but how many diamond dealers have automated their supply chain to shorten lead times or invested in systems that provide up-to-the-minute information on all aspects of their business? Will your sightholder provide you with real-time, password-protected online access to his inventory to streamline your job?
Changes in the diamond landscape are here to stay. You can reap the benefits by working in partnership with your sightholder. DTC is requiring sightholders to increase consumer demand for diamonds, and you are a key component of that equation.
Mark S. Levit is managing director of Partners & Levit Advertising, New York City, and a professor of marketing at New York University. His career in advertising includes work on the De Beers campaigns at N.W. Ayer. Partners & Levit has been instrumental in the success of a diverse list of clients, including Leslies Gold Jewelry, watch marketer Egana of Switzerland and W.B. David & Co., a diamond sightholder. Contact Levit at (212) 696-1200 or email@example.com.