The recent Antwerp Diamond Conference was an oddity—a two-day powwow on branding and marketing for an industry not convinced of the need for either. And while most of the marketing jargon (including the “tri-functional ideology” that one speaker claimed brands have) sailed over attendees’ heads, the conference at least got them thinking about a subject that will play a major role in the future.
The idea to devote the conference to branding and marketing came from a suggestion by De Beers’ Gareth Penny at last year’s forum. (In fact, the entire diamond branding trend can be said to have come from a suggestion by Gareth Penny.) If nothing else, the conference showed how branding fever has overtaken the industry. When producers like Canada and Russia spoke, it was not just about their mines—as it would have been in years past—but about their brands.
Even so, the industry remains divided on the concept, as demonstrated by the opening remarks of Peter Meeus, managing director of the Diamond High Council of Antwerp, the event organizer. “Some love branding, others have questions about it,” he said. “There are branding believers and nonbelievers.”
First and foremost among the “believers” was, of course, De Beers. “Marketing and branding are the key drivers for growth in the diamond jewelry business,” said De Beers managing director Gary Ralfe in the keynote address. “There is nothing more important to which we could be putting our collective minds.” Ralfe noted that since the industry began experimenting with brands and marketing, the diamond industry has outperformed world gross domestic product after years of lagging behind it.
Stephen Lussier, executive director of marketing for De Beers’ Diamond Trading Company, said later that the industry has “begun a marketing revolution—and that revolution is irreversible.
“We want everyone in this industry to ask themselves: What can I do with the people I work with to create more demand for diamonds?” he said. “If you work at Sony, you don’t just dump product at retail; you spend an enormous amount of time thinking about what consumers want. It’s an entirely new set of skills that our industry needs to acquire if we are going to compete for the consumers’ share of wallet with other luxury goods.”
Branding 101. The industry is still in the learning stages as far as marketing is concerned, and much of the conference was a crash course in basics. Carol Potter, global business director for the De Beers account at J. Walter Thompson, London, demonstrated the power of branding by comparing photos of an anonymous blonde woman and Marilyn Monroe. “Both are attractive curvaceous blondes,” she said. “But Marilyn has a meaning beyond her physical assets. She has emotional appeal to us.
“We know what to expect from Marilyn,” she continued. “Sensuality, vulnerability, naiveté, and ultimate femininity. We are unsure about Ms. Blonde. … Faced with a $30 date with Ms. Blonde and a $100 date with Marilyn, most men would choose Marilyn.”
So how does one “create a Marilyn?” Potter said successful brands connect with consumers emotionally. “It’s not about how the brand works,” she said. “It’s how it makes you feel.” For example, a woman will spend $50 for a Chanel face cream not because it contains antioxidants or the jar looks nice, but because “it makes her feel feminine and special, and she believes she is going to wake up looking like Claudia Schiffer.” And a man will wear an Hermès tie not because he likes its design or it’s made of excellent silk, but because “other people—like him—recognize it is an Hermès tie and know he is in their ‘club.’ “
Penny reiterated this theme during his presentation, saying successful brands stem from consumer insights. “It’s understanding the deep motivations of consumers—even if the consumers do not express them,” he said. “Once you understand the consumer need, you develop the product that relates to the need.”
As an example, he cited De Beers’ “Past, Present, and Future” positioning for its three-stone ring. “The consumer insight here is that marriage is a journey and there are times when couples decide to recommit to each other,” Penny said. By contrast, the Japanese “Trilogy” brand stands for a “woman’s inner sparkle, the radiance that makes her feel beautiful. It’s not about relationship fulfillment like the three-stone. The kind of message you saw in the three-stone ring in America is not relevant in Japan.”
Penny argued that for years the industry used only “price as the ‘hero’ of the communication strategy. This expresses no deeper marketing idea. … We don’t see competitors leading us to buy a Louis Vuitton bag for 30% off. Why would Gucci discount its products? You’d think there was a defect [in them.] … The question is: How do we market ourselves? Do we talk about 50 points, G-SI, good cut … or do we present deep, meaningful ways to display the magic of our industry?”
He added that considering consumer needs is no longer “just the responsibility of people on one end of the supply chain. It is the responsibility of all of us. If everyone [here] is focused on marketing, we will have a growth industry.”
Some trepidation. For all this, many speakers flashed warning lights about the new trend. The most discussed part of Potter’s presentation was not her overview of branding, but her contention that nine out of 10 new brands fail. And Paul Goris, chairman of Antwerp Diamond Bank, worried that the industry was rushing into branding too fast: “Marketing and branding are relatively new concepts in our industry. Let us take time to reflect on them and not get dragged into the turmoil of the ongoing marketing hype.”
The cost of branding came up repeatedly. Maurice Tempelsman, chairman of Lazare Kaplan, said: “A brand cannot be built in haste, or on spec, or on the back of short-term borrowings; nor, for that matter, can it be built by everyone.”
Goris said his bank was willing to fund certain marketing plans, but only if they are backed up with “credible market research” and are professionally developed.
The most sustained swipe at branding came from Daniel Horowitz of Antwerp rough dealer IDH: “I’ve been looking for a branded diamond since I was invited as a speaker … and I haven’t come across [one],” he said. “So where are they? Are they sold out? Has anybody seen them?”
He noted that, while branding was supposed to boost demand, the price of polished has not risen, and wholesalers have large inventories. And he argued that consumers are simply not willing to pay premiums for branded stones.
“Diamonds are sought after for what they are, regardless of where they come from or who polishes them,” he said. “The actual origin of diamonds set in jewels remains as irrelevant to the consumer as its source of gold or platinum. I ask you: Do consumers care about the origin of the steel their cars are made of?”
Horowitz, whose sight was eliminated in De Beers’ “Supplier of Choice” reshuffling (see sidebar), said most manufacturers were simply launching plans to please De Beers.
“Unfortunately, manufacturers rarely have the knowledge, the experience, the capability, or the financial resources to launch a brand,” he said.
Glenn Rothman of Hearts On Fire echoed this last point, chiding sightholders who were starting brands as a sideline: “Branding cannot be part time,” he said. “It requires attention seven days a week. You have to be a branding company built around a diamond, not just a diamond wholesaler with a new marketing initiative. You cannot be half-pregnant.”