I just put down the last, nine-page edition of Diamond Intelligence Briefings written by Chaim Even Zohar. Clearly, succinctly, he outlines a pretty scary scenario. Prices are down, there’s no margin in the middle of the pipeline and now, the leading diamond producers have resorted to discounted sales of rough — something unheard of since the early part of the 20th century.
These discounts aren’t just one-off events. It looks like a price war may just have been triggered among all the diamond producers. The big ones will do all they can to maintain — or grab more — market share, while the smaller ones will simply have to take the prices the big operators set.
Chaim also indicates that things aren’t likely to get better until a painful process of consolidation takes place, with perhaps as many as six out of seven companies — who currently don’t really have a compelling reason to be in the diamond business — exiting permanently.
All this will no doubt also add to the anxiety and stress that retail jewellers will be undergoing.
Okay, so now what? Do we lie down and wait for the proverbial 18-wheel truck to redeem us from our suffering?
Of course, not! We need to realise that all of the above is of little or no interest to the consumer. Even lower retail prices do not entice her or him to come and take another look at diamonds and diamond jewellery in retail stores.
So what does convince the consumer?
It’s the story about diamonds that she or he hears from the retail salesperson. That story has to resonate with her or him in a personal way. Only then will she or he be interested in the product — diamonds.
Yes, it is first of all, only about the consumer! And only then about the product! It is about the relationship with the consumer — and the people who actually sell the product.
Last month, American retail marketing expert Lilian Raji wrote an excellent blog detailing what influences a sale. She showed that sales are clinched by “how sales people treat customers when they walk through the front door,” and that it is not about your brand or your particular product. A major part of the purchase decision was driven by how customers are treated by the person selling the product.
Peter Smith, a veteran retail sales trainer, also wrote an interesting articleemphasising that “great salespeople know their products just well enough to use that information as a catalyst to emotively connect to their customers” are actually much better at making sales. So it is also not about ‘killing’ the consumer with doctorate-level product info!
Both these writers give us food for thought — consumers will spend their discretional dollar with those who can make a connection with just the right combination of emotive appeal and product information.
So who is going to tell the story? We are, collectively as an industry!
At the World Diamond Mark (WDM), we’ve already taken some major steps forward. We have held a number of high-visibility diamond promotion events. Sales training modules have been tested and we already have run a number of short but intensive sales courses. And there is more to come.
All of us are really happy to hear that the Diamond Producers Association (DPA) has begun making progress by putting in place an executive team. Rio Tinto’s Jean-Marc Lieberherr is now its chairman and De Beers’ Stephen Lussier the vice-chairman. Together with ALROSA, Dominion Diamond Corporation, Lucara Diamond Corporation, Petra Diamonds and Gem Diamonds, they will be spearheading the DPA’s collective global generic promotions that diamonds need to grab the consumer’s attention.
As to the work that needs to be done in the consumer markets, we are happy that Sally Morrison was appointed as the DPA’s marketing director. Sally will have no problem hitting the ground running as she knows the territory, knows where the goalposts are or where they have been moved.
There’s also plenty of movement in individual segments. Apart from De Beers’ Forevermark brand, which is already actively targeting consumers with promotions, Dominion Diamonds has hired industry product and sales trainer Debbie Hiss. She is to provide consulting services on Dominion’s CanadaMark program, a branding initiative that marks stones as being of Canadian origin.
The WDM sees it role as a catalyst to engage all players — no matter if their focus is on advertising particular brands or on generic promotion — in a well-orchestrated, coordinated effort to make diamonds and diamond jewellery more desirable among the global consumer.
So instead of getting run over by an 18-wheel truck, we need all to jump on to it and drive it.