I came across an interesting press release from the International Diamond Manufacturers Association (IDMA) this week calling for the international diamond manufacturing community to restructure diamond financing. They are worried because while demand for rough diamonds remains greater than the rough supply, the same cannot be said for consumer demand for polished diamonds, particularly in the US.
Stores are closing or having a hard time turning a profit, and the focus is on lower prices and lower quality. The supply of diamonds going to retailers will decrease, but for now consumers have not yet returned to retail stores. Nevertheless IDMA are calling for retailers to pay their suppliers fair prices, necessitating keeping their prices up for consumers. Said Moti Ganz, the president of IDMA:
“Consumers can still buy three pieces of diamond jewelry for the price of one Louis Vuitton bag. The price of diamonds today should be at least 200 percent more than their price in the 1990s. Just look where gold and platinum are and look where we are!”
Should we ask ourselves why the price of diamonds has not kept pace? Actually that’s the wrong question–there is no direct link between the price of rough diamonds (based on the internal considerations of the diamond industry) and the price of polished diamonds (dictated by the consumer of diamonds and diamond jewellery, a population that was forgotten by the industry).
In my view, luxury retailers must first understand why someone goes out and buys a diamond in the first place. In my PhD research, I found that luxury shoppers are looking to express themselves and connect with how they see the world. The better a retailer can help the luxury purchaser understand her goals and connect authentically to her values and personal qualities, the more successful the retailer will be. Walking out of the store, the lucky woman or man should feel empowered, special and unique, respected and feeling free.
Providing the right service doesn’t come easily. A jeweller should be able to detect first who the client is. A Theta woman seeks diamond to help her be ‘truly her’ in a world where most things are temporary and dependent on social setting and circumstance. A Lambda woman wants a diamond that helps her to be unique and genuine; her diamond is unlike any other diamond on the planet, an individual selection that will make her exceptional. As for price, do not underestimate yourself. If you fell confused, the only reason is that the offer of the diamond was not done correctly. When the luxury customer is presented with the right offer, he or she knows exactly what the value of it should be.
Following these values for many years we found that we can properly help the luxury customer, and together with our colleagues we were very successful doing so in the last 25 years. However, the diamond industry failed in respecting the need for luxury and tries to turn the luxury consumer into a diamond dealer when the effort should be done in the other direction.
We hope that we have enough practical knowledge to start offering the luxury consumer what he or she wants. We are aware that this practical knowledge is in the hands of very few people, yet the entire world could appreciate this freedom of expression and choice. Recently we started an initiative that will bring our message to the luxury customer and enable him or her to properly purchase his or her special and unique diamond that can fit only her or him. We will need your help to check our luxury hypotheses and to see whether what we say is really convincing you. In the coming days we will address you again and ask you to be our ambassadors to help us spread our important luxury message. Stay tuned!