DTC officials Gareth Penny and Stephen Lussier say the industry should emphasize
basics and keep up the marketing momentum
Luxury items, according to common wisdom, suffer greatly during tough economic times. Diamonds as a category have bucked that trend so far to the surprise of some market observers. The Diamond Trading Co., De Beers marketing arm, sees clear economic and marketing reasons why diamonds have outperformed other luxury items in this sluggish economy. But Gareth Penny, DTC executive director for sales and marketing, and Stephen Lussier, DTC director of consumer marketing, told Professional Jeweler in London that diamonds cant be neglected and, indeed, require even more attention. Both executives are deeply involved in the push to get the diamond industry to increase the noise for diamonds in the consumer marketplace.
Diamonds: An Economic Report
Penny spoke candidly to a group of diamond brokers, dealers, retailers and reporters. Among his points:
- In recent years, world retail sales of polished diamonds underperformed the gross national product in various countries, but they outperformed other luxury goods categories. In 2001 and into 2002, U.S. diamond retail sales grew 3%.
- The most popular styles during economic downturns tend to be conservative, such as solitaires and three-stone jewelry. Smaller goods at midprice jewelry stores fly off shelves. As a result, chains such as Sterling and Zales are showing stronger sales.
- Unknown factors at the end of 2002: the potential U.S. war with Iraq, the general economic outlook and the danger of a double-dip recession. If there is a war and its successful and short, Penny predicted a negligible effect on the diamond industry.
The good news, said Penny, is that synergistic marketing continues. DTCs three-stone past, present and future message is strong. The increasing diamond focus in U.S. jewelry stores helps too. And the growing presence of diamond and jewelry advertising in consumer publications is beginning to outweigh other luxury products.
Advice to Retailers
Lussier offered the following branding advice to jewelers:
- Align your promotional efforts with major DTC marketing programs like the three-stone message. This kind of single-mindedness increases the message to the consumer and makes it more powerful, he said.
- Make your store a brand. Even retailers who carry other brands must brand themselves as well.
- Focus more on your customers needs. They want to be wooed with messages that make the future look bright. Lussier cited the DTC 2002 holiday campaign, with ads encouraging bigger diamond purchases, such as the ad shown here: Thank you, Bob ... Thank you, Lord.
- Look critically at your suppliers brand idea. Is it a sufficiently differentiated product? Can you really explain the difference so your customer will understand and pay more for the diamond? Can you get exclusivity in your market? Differentiated brands with good marketing support are easily making good margins, says Lussier.
- Dont confuse a new diamond cut with increased sales performance. Extra facets dont necessarily mean better, Lussier says. Ask yourself if your customers will see the difference in value.
- Avoid letting your diamonds get commoditized. Discounting diamonds inevitably leads to this, he says. They should be sold instead on their beauty and branding concepts.
by Robert Weldon, G.G.
Ads in DTCs Statement campaign suggest diamonds are nice in any size, but divine in a 1/2 carat or more. The optimistic message that consumers should think big is a good one during tough economic times, say De Beers officials. Note the emphasis on simple solitaires.
||Jewelers such as Jay Roberts of Marlton, NJ, tied in to DTCs past, present and future campaign during the 2002 holidays. Aligning your promotional messages to DTC marketing is a smart strategy, say De Beers officials.