A few weeks ago, someone signed off an email to me: “Looking forward to a stronger and wiser industry in 2009.” I couldn’t agree more.
It is also likely to be a smaller industry. There will be more retirements, mergers, and, most likely, at least one or two bankruptcies next year.
For many in the industry, the last few months have been brutal, and I don’t see that changing as we enter 2009. Still, there are reasons to look forward to the year ahead. (Certainly my colleague Jennifer thinks so.) My best guess is that, economically, things will have bottomed out by at least the summer, and, in a best-case scenario, we may be beginning to see some light at the end of the tunnel by late summer/early fall of next year. There is a lot of work being done, and money being spent, to get this economy moving, and at some point it has to have an effect. (Just don’t hold me to that.)
Even if the economy rights itself, that won’t solve all this trade’s problems, but it will give it some breathing room.
Other than the economy recovering, here are some of my wishes for the industry in 2009:
- De Beers began the year by cutting its marketing budget. And while that certainly didn’t cause the trade’s problems this year, it sure didn’t help. Fortunately, by the end of the year it invested a record amount of money into its “enduring value” campaign (where the “here’s to less” comes from.) That campaign will apparently continue into 2009 – another welcome move.
But that’s only a short term solution. De Beers has been saying that it shouldn’t have to bear the advertising burden by itself, and I agree. There has been a lot of talk about an industry-wide generic marketing campaign for diamonds. My wish is that finally becomes a reality in 2009.
- If we do have more bankruptcies and/or liquidations, I hope that people go about them with a sense of decency towards all stakeholders.That means treating departing employees with respect, and not leaving customers hanging, or trying to repossess your vendors’ consignment goods. I know bankruptcies aren’t fun, but that really shouldn’t be too much to ask.
- Zale CEO Neal Goldberg has been saying all the right things about selling differentiated product and not advertising solely on price. And his strategy may be bearing fruit: The “Pace-setter” stores and new products are out-performing the rest of the chain. And its new advertising has been outstanding.
And yet, in these tough times, Zale reported “sales declines in mid-teens” in October (though they’re not alone in that), and some forecast it will post a loss this year. It’s also reverted to doing some price-based marketing. As we know, this is not a particularly opportune time to remake anything. But Goldberg is pointing to where the industry needs to go — particularly the mass-market sector – and I hope he gets the chance to change his company to the industry leader we all know it can and should be.
- Social issues have been placed on the back-burner with all the recession talk, but as David Lamb of De Beers recently told me, this is actually a period when more attention should be paid to these concerns, as in tough times people look for excuses not to buy things. So I hope all the worthy industry initiatives – including the Diamond Development Initiative, the Responsible Jewellery Council, the Diamond Empowerment Fund, and the various Fair Trade and beneficiation plans – continue their momentum in 2009 and not get lost in the shuffle.
- Diamond people need to renew their commitment to the industry. For a while, people from some leading companies seemed more interested in investing in real estate than diamonds and jewelry. That seemed like a wise idea at the time; it’s a little more problematic now. But if this industry is going to right itself, people really have to believe, and invest, in it.
Those aren’t all my wishes for the trade in the next year, but those have the benefit of at least being achievable. What are your hopes for 2009? And I hope everyone reading has a great one.