Jewelry Industry Suffers from Myopia
Theodore Levitt, a noted professor of marketing at Harvard Business School, wrote a classic entitled Marketing Myopia. In it, he described the fundamental question every industry faces and too many times ignores: correctly defining the business from the consumer’s perspective – not the producer’s, not the manufacturer’s.
Levitt gave a prime example of an industry that failed to think this way – the railroad business. It was an industry with acute tunnel vision (excuse the pun). It saw only tracks, rails, locomotives, and stations. It failed to view itself as a part of the wider transportation segment. As a consequence, railroads had no technological strategies to deal with the coming of automobiles, trucks, and airplanes.
What has this to do with the jewelry business? The connection occurred to me as I listened to the speeches at the opening of the new rough diamond bourse in Israel in June. In many ways, the jewelry business is like the railroad business. The organizers of the Israel conference are to be commended for bringing together, for the first time, nearly every segment of the diamond industry. But the one segment not present, and perhaps the most important of all, was the retail community.
Moreover, the subject of retailing was pretty much ignored. Nearly all the conference was spent on the availability of rough, the Asian economic crisis, new diamond mines coming on stream, and so on. Only one presentation focused on the consumer – De Beers’ Stephen Lus-sier’s discussion of “Diamond Consumption into the Next Century.”
This industry myopia leads to things like the controversy over disclosing lasering. The diamond industry, ignoring the consumer perspective, fought disclosure and even convinced the Federal Trade Commission it wasn’t needed.Consumer opinion forced the industry to reverse its position.
It also occurred to me that De Beers is the only marketer in the entire jewelry industry. Who else in this business bothers to find out what the consumer thinks, wants, or even likes? Even De Beers, though, shows some of that dangerously narrow point of view when it advertises diamond pendants worth $10,000 to $30,000 but shows them attached to inexpensive, whisper-thin gold chains. Their objective is to sell diamonds, the larger the better. That’s all well and good, but putting a big diamond on a cheap chain is tantamount to spending thousands on a designer gown and matching it with a pair of well-worn Nikes.
The diamond conference in Israel was a terrific first step in developing a broader perspective. The industry – the jewelry industry, as opposed to the narrower diamond industry – is confronted with a host of serious challenges. Internet selling. Fracture filling. Consumer activism in response to media investigative reports. The image of the retail jeweler. Discounting. Falling margins. These problems can be addressed within the context of an industry-wide conference, but the discussion should be from a consumer perspective.
The jewelry industry has frequently been described as a highly fragmented business. Each segment has its own peculiar terminology, practices, and point of view. This specialization tends to result in narrow thinking, but the cost of that thinking is exactly what Theodore Levitt warned about. It’s time for everyone in the industry to focus on the consumer.