The Diamond Trading Company (DTC) will attempt to boost the $50 billion annual diamond jewelry business by 50% in the next 10 years through its “Supplier of Choice” (SoC) initiative, say its top officials.
Based on recent annual diamond jewelry sales–a 3% gain in 2002–that goal is achievable “if that rate is maintained,” says Stephen Lassier, DTC director of marketing.
The DTC is the sales and marketing arm of the De Beers Group. Supplier of Choice is the DTC´s program to stimulate consumer demand for diamonds and diamond jewelry and to create a more active relations between the DTC and its sightholders. The De Beers Group sorts and values the majority of the world’s diamond production, which the DTC sells exclusively through its clients–leading diamantires or sightholders best placed to distribute diamonds efficiently and market them effectively in key markets around the world.
The growth rate for asggregate diamond jewelry sales in all major markets trailed GDP growth in the 1990s, while luxury goods sales surpassed that GDP growth, noted DTC executive director Gareth Penny. The industry has been constrained by inefficiencies in distribution of diamonds and “a severe underinvestment” in advertising and marketing, he said. the DTC created the SoC program to address those challenges.
Sightholders will be informed later this year as to whether they’ve have been selected for the SoC program. Those who are will participate for two years, after which DTC will review what they have done.
The benefits that SoC offers the jewelry diamond trade were outlined for key members of the trade and of the press by DTC directors and managers at the recent international 2003 BaselWorld Watch and Jewelry Show in Basel, Switzerland. They noted that the SoC program already has produced some positive benefits for the industry: The three-stone ring initiative in the United States and Europe, for example, has led to real gains in diamond jewelry retail sales and more spending on advertising by the trade.
The DTC wants to see an additional $200 million spent annually by the trade on advertising by 2004. (That figure now stands at $178 million.) That’s in addition to the $180 million the DTC now spends annually in advertising, publicity, and brand promotion, both globally and in local marketing.
The DTC also will continue to foster and support what a DTC report calls “the emergence of multiple, competing, diamond jewelry to help stimulate innovation and choice, create category excitement, and attract new customers to the industry.” The DTC already has helped sightholders develop some 200 new branding and marketing initiatives under the SoC program, and put scores of sales and marketing experts in a number of major markets to help establish the brands.
Stephen Lussier, DTC’s worldwide director of marketing, noted that despite the global economic turndown, SoC is impacting the diamond industry in other ways, too:
* Retail sales in 2002 for diamond jewelry were “better than expected,” with a strong end-year sales boost, especially in the United States.
* Most major consuming markets increased sales in 2002, with the only exceptions being Japan and Europe.
*More than four million more pieces of diamond jewelry (a 6% gain) were sold in 2002 compared to 2001.
* The retail value of diamond jewelry increased 3%, both in U.S. dollars and average local currency terms.
“Our goal is clear–to grow consumer demand,” said Lussier. “There is a huge opportunity for us as an industry to work together more effectively and embrace the future to ensure the success of the diamond industry.”