The need for significant capital investments will be the main trend in the diamond mining industry in 2021-2030

The prospects of the diamond industry in the post-crisis period are discussed by the Rough&Polished correspondent with Sergey Mityukhin, Candidate of Geological and Mineralogical Sciences, Honored Geologist of the Russian Federation.

06 july 2020

Young Diamantaires: We create initiatives for the benefit of diamond communities worldwide

The World Federation of Diamond Bourses recently launched its Young Diamantaires website. The organization has worked for the past four years with young members of the diamond community all over the world to create a platform through which they can express...

29 june 2020

Those who implement the right anti-crisis strategies have more chances

It is not surprising that because of the pandemic and the crisis, the most heated debate in the jewellery industry is about what is happening and the possible ways of survival. Irina Slesareva, an expert, art director of the Russian Diamond Line contest...

22 june 2020

The secondary diamond market in Russia is not mature although its prospects are huge

Pavel Barannik, the founder and head of the Moscow Gemological Laboratory, the founder of the Gemological Institute and President of the Moscow Diamond Club, graduated from the Gemological Institute of America (GIA). He is an expert and consultant...

15 june 2020

Johan Erikson: The industry needs to spend more on advertising and marketing

First Element is a fully independent Diamond Services Company registered in Belgium, Botswana, South Africa and Dubai. First Element is committed to providing a world class diamond service aimed at adding value to the entire supply chain, from the daily...

08 june 2020

Only natural diamonds? No. Only diamonds!

15 june 2020

The Diamond Producers Association (DPA) has rebranded itself and now exists as the Natural Diamond Council (NDC). Recall that this organization came to life in May 2015 with the aim of re-creating the generic marketing of diamonds, which virtually ceased when De Beers abandoned monopoly regulation of the diamond market. It took longer to negotiate the form of existence of the DPA than implement the stated goals; therefore, no particular success was achieved in generic marketing. The decline in consumer interest towards diamonds, especially on the part of millennials, is felt quite distinctly by the market.

Five years is a long enough period for a marketing program. During such a time (1966-1971), De Beers built up a diamond market in Japan practically "from scratch", making it the second largest in the world. But DPA was clearly unable to repeat this success. What was the reason?

Maybe it had a too meager budget? DPA started at $ 6 million per year and over five years this amount has grown by more than an order of magnitude. Perhaps the founding fathers of DPA, the leading diamond mining companies should have been more generous, as De Beers allocated about $ 200 million a year to marketing programs in its time. But it seems that it was not only money and not so much about money - DPA's marketing ideas were not adequate to the challenges of the time.

What is generic diamond marketing? Essentially, it is creating an information shell in which the polished piece of crystalline carbon is packaged before being sold to the consumer. Moreover, it is this shell that is the genuine product, since without it a diamond as a product simply does not exist due to the complete absence of applied useful properties. The problem is that consumers’ tastes and preferences keep changing, sometimes smoothly - with the change of generations, but nowadays this process is often much faster. Diamonds themselves are eternal, you can’t change anything in them, and to make millennials buy them as willingly as this was done by baby boomers, you need to modernize the information shell. DPA did not cope with this task.

The slogan “Real Is Rare, Real Is a Diamond” created by DPA was fundamentally a loser against the famous “A Diamond is forever”. Firstly, it is too long for a marketing motto, especially in this fast-paced time. Secondly, this parody of syllogism caused reasonable bewilderment: What kind of "rarity" is it, if it is mined by tens of millions of carats a year, aggressively advertised and sold in thousands of boutiques around the world, not counting the numerous online stores? And finally, too close to "rarity" are antiques, dusty grandfather junk. The slogan did not work and the attempt to reincarnate De Beers’ advertising strategy failed.

And why was marketing innovation needed at all? Why the ingenious motto "A Diamond is forever" and advertising campaigns based on it stopped to satisfy? The founding fathers of DPA could well confine their efforts to collecting two or three hundred million dollars and restart generic marketing using the old patterns, since today there are plenty of professional advertising agencies equal to N. W. Ayer & Son in the market.

The fact of the matter is that the demand for marketing innovations was objective - to one degree or another, all market participants understood this. The diamond information shell built on the legendary "A Diamond is forever" (1948) was ideally designed for the values ​​of a couple of post-war generations, and in the eyes of the consumer of the 21st century it became too plain and dull. Other times, other manners, alas. The diamond image really needs modernization, so what should it be?

Apparently, the Natural Diamond Council considers "natural origin" to be the main property of the modernized information shell of the diamond, not its mythical "rarity". Therefore, the motto “Real Is Rare, Real Is a Diamond” is replaced by a more concise “Only Natural Diamonds”. Obviously, the marketing strategy set by this slogan is rather straightforward and is based on the assumption that if there is a choice, the consumer will always prefer "natural" and "genuine" to "artificial" and "synthetic". Therefore, it remains only to add a fair dose of the miraculous “naturalness” to the faded information shell preserving the usual value guidelines: love, marriage, procreation and voilà, we kill two birds with one stone - the consumer is attracted to the “new” property of diamonds, and the formidable competitor represented by manufacturers of synthetic diamonds falls into a due stupor.

Unfortunately, "naturalness" cannot provide a guarantee for marketing success. We all remember the collapse of the natural fur market in the early 1980s caused by superbly organized and extremely aggressive anti-advertising campaigns, allegedly initiated by environmentalists and animal advocates. The reason for this short-lived but destructive trade war for natural fur manufacturers was, of course, not in the animal welfare defenders, who suddenly came to “see the light”, but in technologies that made it possible to create a range of new synthetic materials for clothing. As a result, materials originally developed for sports and use in special conditions have conquered a wide market, leaving natural furs barely a quarter of the previous market space. A video featuring a model walking the runway and leaving behind a puddle of blood streaking from under her fur boa even today makes the viewer shudder. Meanwhile, there is no way to squeeze even a drop of blood from fleece and sintepon.

The slogan "Only Natural Diamonds" is objectively an invitation to a trade war with producers of synthetic diamonds, no matter how hard the NDC leaders try to deny it. And if the battles will be played on ecological fields, "natural diamonds" have practically no chances. A recent comic "study" conducted by Trucost ESG Analysis commissioned by DPA, during which synthetics producers were allegedly "caught" in generating some exorbitant CO2 emissions, clearly demonstrated the fighting power of advocates defending the position of natural diamonds. If DPA (now NDC) considers this as a serious argument, then the result of hostilities may be very sad for the “natural partisans”.

So, an appeal to "naturalness" not only does not guarantee marketing success, but it can also serve as a very dangerous casus belli. Is it possible to modernize the information shell of a diamond without resorting to such a dubious argument? Yes, it can be done.

To begin with, let us ask ourselves if there is a significant difference between the marketing potential of natural diamonds and that one of synthetic stones? They are identical in terms of physical properties, and the assertion that the first are a creation of Nature, while the second are hand-made and due to this they are a second-rate product, appears to be an explicitly weak argument. Canvas, squirrel fur brushes, or vermilion are natural materials, but people pay millions not for them, but for the paintings of Rembrandt, Cézanne, or Modigliani. Hypertension can be treated with leeches - an unconditional creation of Nature, but modern civilization prefers angiotensin receptor blockers - synthetic products of big pharma. It is entirely possible to ascribe some miraculous properties to synthetic diamonds that contribute, say, to the strengthening of marriage - a primitive marketing solution, but quite comparable to the thesis “true love cannot be synthetic” popular with natural diamond adherents. This deep thought, by the way, should cause a sardonic smile among the marketers of the pharmaceutical giant Pfizer, which has made billions on the promotion of the completely synthetic Viagra.

And yet there is a difference, and it is in favor of natural diamonds. This is history. The history of synthetic diamonds is just a history of technology, short and not too expressive. As a material for marketing campaigns, as well as for creating and promoting brands, it cannot be compared with the history of a natural diamond - full of dramatic adventures, intrigues, financial and creative ups and downs. A story full of blood, which, as you know, is a juice of a very special kind.

What distinguishes the generations of diamond consumers, for whom the motto “A Diamond is forever” (1948) worked perfectly, from the generations of modern consumers? For the first ones, the strongest factor determining the hierarchy of values ​​was the WW2. For people who, to one degree or another, experienced this cataclysm firsthand, the pre-war world seemed like a paradise, a place inviting to return - to reliability, stability and eternal values. "Forever" meant "for good," and the motto worked. Any emotional memory persists in the next generation and almost completely fades in the third. For today's diamond consumers, 40 years old and younger, the WW2 is something resembling Napoleonic wars, a couple of paragraphs in a textbook; it may arouse curiosity, but it does not cause strong emotions. Stability is a condition and background of their existence, while "forever" came before their birth and they cannot make a dream out of what already exists. It is necessary to offer what is not there, what is missing.

A diamond is a magic crystal inside which one can see the Anglo-Boer Wars, spies and gansters, world conspiracies, billionaires, actors and adventurers of all kinds, fantastic scams and love stories... This is cooler than any PC shooter game, detective novel or TV series - all that in reality does not and will never be experienced by the majority of consumers in the United States, Japan, China, and Europe. A great adventure, breathtaking, full of risk, an adrenaline fountain - the secret subconscious dream of the modern middle class. This is what needs to be offered. And only natural diamonds have this potential, whereas synthetic stones have no such story.

Paradoxically, in such a paradigm all the troubles ascribed by the adherents of synthetic diamonds to the traditional diamond producers turn into advantages for the latter. The more dramatic the story, the more effective the marketing based on it.

In contrast to the environmental theme, this is a field where you can and should win. But the slogan and, accordingly, the strategy should be adjusted. There should be an even more succinct slogan, not "Only Natural Diamonds", but "Only Diamonds!" The consumer should be confident that a genuine diamond is only that, which is integral to the History of Diamonds. A copy of Cezanne’s painting can be beautifully made, but a genuine Cezanne is History, while a copy is just the history of a copy. And the synthetic diamond in the proposed strategy is just a copy of the genuine diamond, and this will be its place and its price.

Sergey Goryainov, Rough & Polished