I read the comments of DTC and confess my utter amazement…

Take a look at the Enduring Value Media Release.  Among many other things they argue that the medium and long term fundamentals of the diamond industry are strong (!?)

That’s rings about as true as John McCain stating that the fundamentals of the US economy are sound just days before the biggest meltdown of the US financial sector since the founding fathers walked the land.

I also take real issue with whatever data collection indicates that diamond jewelry is the #1 gift for holidays 2008 “by a wide margin”.  I can report to you, direct from Main Street USA, that the bigger decision is whether gifts will be exchanged at all.  It is all well and good that consumers desire “fewer, better things”, but the real pocketbook world is a bit more complex than that.

On the other hand, I do acknowledge that spending a gazillion dollars to market to consumers the idea that diamonds are a great long term store of wealth probably feels like only viable option available right now.  What other choice do they really have? Just run the ads and hope for the best.

There is a real risk that the old ‘kill the messenger theory’ will come into play here.  Being the bearer of bad tidings is never easy.

However, I think Isaac has a point.

Our industry is in a real mess. No doubt about it.

We have been looking for some time now for a new style of leader to step forward and help navigate the industry through this mess.  I’m sure DTC feels it’s acting in the best interests of the industry to protect the PRICE of diamonds, but I would urge a fundamental rethink to safeguard the VALUE of diamonds

The move of Martin Rapaport was a shot across our bows.  And it was definitely was heard around the world, but remember that it was just a warning shot.  It has had absolutely no impact at the consumer level and I have serious doubts that it has had any real impact at the jeweler level.  However, the killer shot is being loaded into the cannon – and it may be unleashed unless someone steps into the leadership role, changes the industry heading, and puts the ship on a path to safer waters.

Here is my idea – If DTC wants to really boost demand they should invest directly into the local retail jeweler.

It is the DTC, not consumers, who have lost confidence in the ‘enduring value’ of diamonds.  They are the ones who do not own any diamonds of their own.  They only borrow diamonds, sell them to consumers, and eventually pay off these diamonds when the risk has reduced to zero.

Protecting this ‘enduring value’ is the marketing question that should been receiving the undivided attention of DeBeers. Given where we are the answer of how to fix this problem is best left to the highly paid consultants. But from the street level, it seems like a matter of incentives (or disincentives) for consumers to purchase.

In an attempt to push product down the pipeline for the past 20 years, the industry has eroded and destroyed this enduring value in the eyes of the retail jeweler.  ’Enduring Value’ looks like a return to basics. And about time too.  But is it leadership?  Not in my view.

Yours, Randy Pearson,
Registered Supplier, AGS