“It is amazing,” someone in India recently told me, speaking about the U.S. market, “you can brand water, but not diamonds.”
True, but let’s not forget that branded diamonds are sold every day in this great land of ours. Take a look at this excellent article on Hearts on Fire in the latest Fortune. In it, the writer gets to the heart of the brand promise:
I came away thinking that while there may not be one particular thing that distinguishes a Hearts on Fire diamond, you do get a beautiful stone cut to an exacting standard. …
“There’s a consistency that is unequaled in the industry,” says Rovinsky of Bernie Robbins, adding, “Is Starbucks just another cup of coffee?”
Of course it is! But the point is with Starbucks, and Hearts on Fire, you know what you are getting (“a beautiful stone cut to an exacting standard.”). Just as bottled water may be the same as tap water. But you know it is up to a certain level. With tap water, you can’t always be sure.
Now, many independents retailers feel, with their long-standing track records in their communities, they already offer consumers that degree of assurance. Which is why so many of them feel both attracted to and put off by brands like HoF.
What’s missing from this article is a discussion on the economics of all this. With $350 million in sales a year, HoF is clearly a good business. But how profitable a business is it? Yes, if you advertise something enough, and push it enough at retail, people will buy it. But will enough of them buy it to justify the marketing outlay?
For now, many U.S. companies who have gone into this — HoF excepted — have decided it isn’t. You may need the deep pockets of a De Beers/LVMH — or, possibly, HoF’s owner Eurostar – to keep pouring money into something that may not pay off for years, if ever. In an industry with thin margins, many diamond companies don’t have the luxury of that kind of patience.
In any case, HoF deserves credit for a) having seen the potential of a branded diamond ahead of just about anyone else, b) their perseverance. The company is still plugging away. Here is a look at their new ad campaign, which, as the article notes, has raised a few eyebrows. It certainly is – um – different ….