The Branding Imperative
Selling diamonds by price alone must come to an end if the industry is to expand, say experts
Branding has clearly arrived in the diamond and jewelry industry despite its daunting learning curve and the high cost of admission. A brand cannot be built in haste or on spec or on the back of short-term borrowings. Nor, for that matter, can it be built by everyone, Maurice Tempelsman of Lazare Kaplan International, New York City, said during his speech at the Antwerp Diamond Conference in November 2003. His pithy remarks encapsulate the discussions on branding that took place there and at the Rapaport Diamond Conference in New York City a few weeks earlier.
Much of what the speakers trotted out at both conferences sounded like a college course labeled Branding 101, but the sheer range of presenters as well as the array of specific programs discussed, made listening to the basics worth it. People are learning to do things differently marketing will take a while to develop, said Terry Burman, group CEO of Signet Group, parent company of U.S. chain retailer Sterling Jewelers, who spoke at the Rapaport conference. But it will make us more productive as an industry. Burman cited the success Sterling Jewelers has had promoting its Kay Jewelers and Jared the Galleria of Jewelry brands, as well as a branded diamond, the Leo Diamond by Schachter & Namdar.
We need more share of voice, said Ed Bridge, president and joint CEO of Ben Bridge, Seattle, WA, another successful chain jeweler who spoke in New York City. Theres a greater desire [among consumers] than we are fulfilling. Not everyone who wants jewelry for Valentines Day or Mothers Day gets it theres room to grow.
Gareth Penny, executive director of De Beers Diamond Trading Co., led the branding discussion in Antwerp by outlining different ways marketers are increasing the noise about diamonds. Jewelers trying to decide how to brand their stores and/or their diamond jewelry may find it helpful to ponder Pennys big five branding strategies. The DTC executive and many others made clear at both conferences that the days of selling diamonds and diamond jewelry by discounting prices have to end if the marketplace is to expand vibrantly. To afford the diamond price increases also coming down the pipeline, jewelers will need to enhance the perceived and actual value of their stores and the diamonds and diamond jewelry they sell. Branding and marketing programs are the way to do it, say industry leaders. Penny focused on five strategies.
1. Retailer Branding
Penny recognized the efforts of longstanding brands such as Tiffany & Co. and Cartier and recently revamped brands such as Van Cleef & Arpels. The lesson for jewelers is to make your name stand out and stand for something. Then youll be able to sell diamonds at higher prices.
2. Fashion Branding
The sheer number of big fashion houses embracing diamond jewelry was apparent this past holiday season, as brands such as Gucci moved away from cheaper all-metal jewelry into higher priced diamonds. Much of this jewelry isnt sold in jewelry stores its real benefit to jewelers is that high-fashions endorsement gives a blessing and a burnishing for the whole category. This helps make diamonds top-of-mind for consumers when they think about luxury products.
3. Industry Branding
Of the hundreds of brands tested in the marketplace, nine out of 10 will fail, said Carol Potter, global business director of J. Walter Thompson, which handles De Beers Diamond Trading Co. advertising. Potter spoke in Antwerp. Still, some brands have succeeded though the definition of success varies. If you sell a brand that clearly enhances your stores image whether or not its well-known by consumers then its working. Few industry branders have deep enough pockets to have the kind of national consumer impact David Yurman and those at his level have. But smaller brands can still succeed in packaging diamonds in a way that will increase their value to your retail customers.
4. Diamond Cut Branding
Companies such as Hearts on Fire that promote their diamonds superior cut were cited in Antwerp and New York City as examples of success in this niche. Controversy remains, however, as marketers debated in Antwerp whether consumers will pay more in the long-term for diamond cut differences they may not fully understand or trust. Still, many jewelers have already found success attracting consumers willing to pay more for branded, differentiated cuts. The ultimate test of this concept may not occur until the Gemological Institute of America finishes its diamond-cut study. So far, GIA researchers have said their work shows many different diamond cut proportions produce beautiful diamonds. If this statement holds, it may actually support some of the branders claims to superior cutting.
5. Ideas Branding
Penny used DTCs three-stone jewelry marketing campaign as a prime example of branding an idea. The campaign celebrates a couples past, present and future. This approach grabs consumers emotions, which all speakers agreed is central to successful branding whether the brand touts a retailer, a high-fashion house, a diamond manufacturer or a diamond cut. If you plan to establish a brand, youve got to stay close to your customer and have a product message that delivers strong emotional appeal, says Potter. Whats important is not how the product works but how it makes you feel.
Beyond considering the five types of branding, Penny also urged jewelers to take a wider approach to diamond marketing. To sell effectively, you should not just build a brand-advertising campaign, but support it with a comprehensive plan for its target consumers, the product, the place where you sell it, the prices you charge and the promotion and publicity you arrange (see Managing, p. 86 for Pennys advice on a marketing plan in your store).
To increase diamond growth by 50% over the next 10 years, innovations are needed. We must transform the market to a consumer orientation, said S. Lynn Diamond, executive director of the Diamond Promotion Service, who spoke at the Rapaport conference. Consumers want a good retail experience, but many find jewelry stores daunting or worse boring, she said. DPS works with jewelers on improving the shopping experience. Diamond and retailer Ed Bridge cited the crucial role well-trained sales associates play in building demand for diamonds and burnishing brands.
by Peggy Jo Donahue and Robert Weldon, G.G.
||Gareth Penny, executive director of the Diamond Trading Co. and architect of the Supplier of Choice plan, presents five branding strategies to help move the diamond business into the future and away from discounting. Photo by Robert Weldon.