The industry trend toward branding was both lauded and lamented during a panel on the diamond industry Thursday at The JCK Show in Las Vegas.
Moderator Ken Gassman of Rapaport Research noted that the trend toward branding in the jewelry industry was still in its infancy. “If you look at branding in our industry compared to other industries, it’s almost nil. You don’t buy an unbranded car, unbranded cereal. This industry has a long way to go.”
But retailers on the panel had doubts about the trend. “Diamond branding is supposed to be this magic panacea that improves both margins and sales,” said Ed Bridge of Ben Bridge Jewelers. “In rushing to branding, we forget at our peril that this industry is built on romance, passion, and a love for each individual gemstone.”
Later he added: “A diamond brand is not enough, even if it stands for something. Diamonds are too unique; they require personalized, professional service. … To me the most important brands are the retail store name and the salesperson waiting on the consumer.”
The model that retailers should emulate, he added, was Tiffany. “They are not selling commodities, but the image of the blue box, the feeling it creates. They are selling their own name—not other people’s.”
Bridge also was not enthusiastic about technological devices that demonstrate diamond features to the public. “I think they take the romance out of the sale,” he said. “Some guys like them, because guys like toys, but women are bored, and if you lose the woman, you lose the sale.”
Other key points raised:
* Esther Fortunoff of Fortunoff said the keys to her chain’s success are hiring the best people and including key salespeople in the buying decisions. Responding to a question about how her store handles Internet competition, she said, “We ask if they are comparing apples to apples. Is what they are comparing the same? We also sell the benefits of buying from us. The lowest price is not the most important thing to every person. I’m sure we lose a fair amount of sales to the Internet, but we also make some. Healthy competition is good. It makes us better.” Bridge added: “When someone wants to buy from the Internet, there’s a reason they are in your store. They haven’t bought yet. So get that ring on her finger, let her wear it out the door. That’s something you can’t do on-line.”
* World Diamond Council chairman Eli Izhakoff said the industry should be “proud” of its efforts fighting conflict diamonds. “Three years ago we were faced with the toughest challenge our industry has ever had, and we came through it with flying colors,” he said. “I don’t think there’s ever been a situation where the entire industry—from miners to retailers—united to fight this problem. We had to deal with governments, with the Security Council, and had to get 70 governments to agree to this system. We had never done a lot of these things before, and we deserve a lot of credit for seeing them through and making this system happen.”
WDC executive director Matt Runci, who was in the audience, added: “The crisis of conflict diamonds is behind us, but what we are left with is a population of future consumers who have been sensitized to issues regarding social responsibility. There may be other issues down the road, having to deal with the environment, labor practices. These may not be crises at your doorstep today, but they represent the beginning of a new awareness among consumers in general. We have to be proactive and face these issues going forward.”
* Schmuel Schnitzer, president of the World Federation of Diamond Bourses and the Israeli Diamond Exchange, noted that the world faces a variety of challenges. “Before the war in Iraq was over, we were already dealing with SARS,” he said. “We are still waiting for the upward swing that was supposed to happen at the end of the war in Iraq. I am confident that, though it was delayed, we will see it in the next couple of months.”
He said in recent weeks the mood in Hong Kong had picked up. “Exports are getting back on track,” he said. “An Israeli diamantaire who just returned from Hong Kong told me that at the beginning of his stay, 70% of people on the street were wearing masks. At the end of his stay, 70% were not.”
He noted that Israel is now a major player in both the rough and polished markets, and exports increased 15% last year. He concluded by noting that diamond jewelry remains a desirable product for consumers across the world. “Eighty-four percent of American brides bought diamond engagement rings in 2002,” he said. “This reminds me of what my father used to say when I brought home 84% on my report card: ‘Where’s the other 16%?’ God willing, we’ll find them in 2003.”
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