As we’ve noted, the DTC is doubling the size of its Christmas campaign, which will give it, in the words of De Beers external and corporate affairs director Stephen Lussier, “its biggest Christmas campaign” ever.
But, as Lussier notes, they wouldn’t have allocated the new money if “they didn’t have something new and interesting to say” – meaning the new “enduring value” campaign. Here is what Lussier told me in an interview Tuesday about what the DTC is going to say to consumers – and the trade:
When we talked to our clients [at the recent sight], we wanted to give them some perspective, particularly after the trying October. We wanted to revisit the supply-demand dynamics. There is actually no way to look out to the future and think that diamonds are not going to be rarer and more valuable in time than they are today. If you look at diamond reserves in the ground, they are at their lowest level since the 1970s. Most of the mines are getting older and a lot of them are coming to the end of their lives. This is a rare product that is going to get rarer in the last 20 years. That gives confidence to the industry.
We did some research in October in the midst of the troubles to get a sense of consumer habits. The good news for us is that diamond jewelry is the most desired product in the luxury sector, even more than electronics like flat screen TVs. But what came out in the research is this concept of “fewer, better things.” How do you deal with the fact that you have less to spend? 80% of women said they would prefer one good thing rather than multiple average things. We thought that was an interesting phenomenon.
That is how we get into this campaign called “enduring value.” How are consumers going to deal with an era where there could be less? And then we got to this idea to think about the things that really matter. We have all had a life of plenty. But how many of those things endure and how many of things do you really treasure? How many of those things have significant meaning and are things that you keep and pass on and not just send to the thrift shop – particularly in the fashion era, where so many things are disposable. The disposable has become the wasteful. Our campaign is for people to think about diamonds as something more lasting.
The second part is the idea of lasting value, at a time when just about everything that you can imagine has evaporated in value. The idea that if diamonds hold a value, that makes them a smart decision to buy when you are making a purchase. It can help bolster the salespeople and it gives them some strong weapons this Christmas. This will be good not just for diamonds but for jewelry in general because of its emotional and enduring value. We think the industry needs to get a new language for what will be a new era.
And yet, how do you deal with some of the price declines we’ve seen lately – such as Rapaport lowering his prices last week?
Well first off, there is a lot of debate that Rapaport has got it wrong. But those declines are still moderate compared to anything else. And if you look at the long-term fundamentals, there is only one way that prices are going to go.
Even taking the Rapaport declines, polished prices are still ahead of last year. And good luck finding anything else that is ahead of last year.
But you are not touting diamonds as something to invest in.
I don’t think you want to sell them as an investment, but you do want to get across the concept of diamonds as a “store of value.” So that doesn’t mean you are going to buy them and sell them for a profit in a year. But if you have two things to buy, there is one that will hold its value, and the other thing won’t be worth anything in a few years.
We also don’t want to people to feel uncomfortable buying diamonds in their peer groups. We want people to think buying diamonds is a smart thing to do in this environment.
I wouldn’t want to be in the high-end fashion business in this environment. It could be considered wasteful to buy something that you aren’t going to use for a long time.
How do you deal with the old ideas about the cartel, and the idea, that one still hears quite a bit, and was part of the Blood Diamond movie, that “diamonds aren’t rare.
We are going to deal with it head on. The facts are, there isn’t a cartel, there aren’t any stocks, and reserves on the ground are at an all-time low. And if you look at those basic facts, they underline the idea of the enduring value of diamonds.
So what do you want to communicate to the jewelry industry about all this?
The key message is to make sure you understand these new thoughts and current consumer attitudes. These thoughts are not top of mind for most people, but when they are communicated, I do think they will find it intuitive.
Among the new lines the company is using; “Some bonds are still worth investing in.” “Fewer better things.” “Here’s to less.” “Here today, here tomorrow.” It is also bringing back its “Hands” commercial from a few years back to incorporate this new message.
What’s also interesting is that De Beers will transmit this message not just in the U.S., where it is committed to generic advertising, but also elsewhere in the world. It certainly seems like an intriguing campaign with some rather elegant logic behind it. The Diamond Promotion Service should have more to say about this at its meeting tomorrow.