April 9, 2003
DTC Aims for 50% Growth in Next Decade
De Beers' Diamond Trading Co. expects its Supplier of Choice initiative to grow the current $55 billion diamond industry by 50% in the next 10 years, said Gareth Penny, DTC's executive director for sales and marketing, at an April 7 seminar during Basel World.
Supplier of Choice is DTC's plan to increase demand for diamond jewelry and make the diamond distribution system leaner. The plan, expected to be fully functional by mid-year, requires DTC clients (called sightholders) to initiate marketing ventures, make the diamond pipeline more efficient and adhere to a series of best practices principles to increase ethical accountability and professional standards. Industry observers have been in suspense waiting for the DTC to finalize its roster of clients who fulfill these criteria, but it did not do so at this forum.
DTC marketers outlined key areas where the trade could benefit from Supplier of Choice, such as through retailer and manufacturer alignment with DTC marketing initiatives. Publicity programs such as those for the three-stone ring in the U.S. and the trilogy ring in Europe boosted diamond jewelry retail sales.
Dominic Brand, DTCs western markets marketing manager, said DTC will continue to spend $180 million annually in advertising, publicity and brand promotion on global and local marketing. He stated, "the advantages of aligning with DTC and its clients are simple: effective strategic marketing at a lower cost, resulting in greater returns and profitability for both retailers and manufacturers."
DTC said it will continue to foster and support the emergence of multiple, competing diamond jewelry marketing initiatives to stimulate innovation and choice, create category excitement and attract new customers to the industry. The DTC marketing team showcased more than 200 DTC sightholder initiatives to demonstrate the pace and extent of its clients' adherence to the strategy. The key to successful marketing ventures, says DTC, is to focus on partnerships and marketing based on consumer needs and behaviors.
Stephen Lussier, DTC's worldwide director of marketing, said Supplier of Choice is already making a direct impact on the diamond industry in spite of the global economic downturn. He cited the following to support this view:
Incremental trade advertising spend is at $178 million in 3 years, well on its way to reaching the target of $200 million by 2004.
2002 retail sales for diamond jewelry were better-than-expected, with a strong year-end sales boost, especially in the U.S. Almost all major consuming markets increased sales in 2002. The only exceptions were Japan and parts of Europe. This put diamond jewelry sales on par with other luxury goods, a goal DTC has stated is important to its initiative.
More than 4 million more pieces of diamond jewelry were sold in 2002 compared to 2001 (up 6%). It was the second-largest sales year ever following the millennium year of 2000.
Retail value of diamond jewelry increased by 3% in US dollars and in local currencies.
by Peggy Jo Donahue