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De Beers’ 2017 Diamond Insight Report reveals manypositive points about diamond jewelry, but there’s onebig glaring problem: demand is flat. While production

and sales grew—global diamond jewelry sales in 2016 totaled$80 billion versus $79 billion in 2015—the value of this pro-duction fell 12 percent.

“Consumer demand is decreasing because diamonds aremeasured in dollars and volume,” explains Edahn Golan, headof an eponymous diamond re-search and data firm whoseown findings reinforce DeBeers’. “If you mine diamondsand aren’t finding growth in de-mand for the entire run ofmine, you have a problem.”

A clog in the pipeline impactseveryone—not just diaman-taires—in the supply chain.Decreased bank lendingstrains dealers’ ability to fi-nance purchases, creatingtighter payment terms for re-tailers already struggling withlow margins and traffic. Mak-ers who participate in tradeshows for exposure can some-times end up in hard-to-re-cover-from financial holesmade worse by retailers’ requests for consignment and a re-luctance to buy into lines. This insidious spiral effect will con-tinue until the industry addresses the root of theproblem—consumer demand for jewelry. If more consumerswere buying jewelry, this compounding pressure would bereduced and more sales could occur.

Potential remedies are abundant. Stronger marketing ef-forts—De Beers will spend $140 million on marketing thisyear—better storytelling, more robust online shopping ex-periences, and better courtship efforts to women wouldall go a long way toward making consumers fall in love

again with jewelry. But the first step is the doozy—jewel-ers need to get shoppers’ attention. “Our biggest challenge is just to get shoppers to walk intostores,” observes Ronnie Vanderlinden, president of the Dia-mond Manufacturers & Importers Association of America.

WOO WOMEN BETTERAs women’s salaries rise worldwide thanks to education andchanging cultural norms, so too does their social and eco-

nomic influence. De Beers’ re-search shows that: • Demand from women repre-sents more than 90 percent of global jewelry sales. • Women are an active andgrowing segment of diamond self-purchasers.• Some 31 percent of 2016U.S. women’s diamond jewelry sales were a female self-purchase.A Nielsen study reveals that thespending power of U.S. womenis as high as $15 trillion, ce-menting the idea that ladies areworth proper wooing.

Women constitute the major-ity of jewelry wearers andwill be courted through some

of De Beers’ fourth-quarter advertising plans. Pursuingwomen is not a new idea. In fact, the term female self-purchaser has been a trade topic for 10-plus years.

In 2005, JCK magazine named the “Female Consumer” itsconceptual person of the year for serving as the “singlelargest opportunity for sales growth in the domestic jewelryindustry,” wrote former editor-in-chief Hedda Schupak.Asked about pursuing the female self-purchaser—an ideaas timely today as when Schupak examined the issue 12years ago—the present-day editor of The Centurionnewsletter says it’s not surprising that few have yet to act.

REIGNITING DIAMOND DESIREJennifer Heebner

Depressed demand for jewelry is hurting everyone—from miners to retailers—in the supply chain. The GemGuide talked to industry leaders to explore opportunities for change and learn how to reigniteconsumer passion for our product.

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“This isn’t an industry that embraces change easily—it’slike turning a battleship in a bathtub,” she says. In May, luxury research firm MVI Marketing Ltd. unveiled find-ings of a study on female self-purchasers in the jewelry mar-ket. MVI learned that more than 91% of respondents “wouldlike to purchase more based on the way it makes them feel.”Barriers to sales in jewelry-only stores include few younger(and, sometimes, more-stylish) women at the counter, lackof merchandise variety, and intimidating environments—mostly non-issues at chic lifestyle stores that merchandisejewelry with clothes, shoes, and bags.“Department stores do a good job because they areused to having this customer come in—not enoughanymore, but they’re more capable of it than jewelers,”notes Liz Chatelain, MVI president.

Keeping up with developments in fashion andpairing jewels with clothing and color trendsare important to capturing the female client. Ina blog post titled “Merchandising for the Fe-male Self-Purchaser,” The Edge Retail Academycofounder and president David Brown urgesreaders to stock colored gem and pearl jewelry“with diamond accents to keep options casualand wearable.” Schupak agrees, encouragingretailers to carry jewelry that complementstoday’s clothing. “Suits are not what people arewearing now unless you’re a banker, lawyer, orpolitician,” she says.

Chatelain’s research, too, touches on coloredstones. “Females in the 35 to 55 age bracketshould be the retailer's focus, especially for col-ored gemstones,” she says. One female re-spondent even took a swipe at America’sbest-selling jewelry product: “I need color inmy jewelry to go with my outfits. It can't all bewhite diamonds.”

More insight reveals that female self-pur-chasers care more about fashion and style—the fun part of the purchase—than gemology,a point that over-zealous graduate gemologists

need to consider. “You don’t need to tell shoppers everythingyou know about emeralds,” jokes Sherry Smith, director ofbusiness development for The Edge.

Women also love versatile jewels and delicate jewels. Versa-tile pieces appeal to pragmatic types who know they’ll getmultiple looks out of single styles. Delicate items are moreattainable and better complement today’s popular athleisureattire. “Today there is a shift in fashion to smaller pieces withlower price points,” says Golan of his research. Visible pricingalso helps women feel empowered to shop without intimi-dation. A clutter-free way of handling tags? A sign that statesa price range for an entire case.“Jewelry is a fashion item—a diamond is forever but a settingisn’t,” says Schupak. “The message of jewelry as a gift of love

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has been hammered home for so long that jewelers have ahard time seeing past it, and now so do their customers.”

MORE WAYS TO INFATUATE SHOPPERS Sharing stories of the benefits resulting from sales of dia-monds and gemstones is compelling for customers. Lovestories inspire engagement ring purchases, but accountsof job creation, revived communities, and improved livesstand behind many non-wedding jewels. Fair trade gems—ethically sourced stones from fairly paid miners, sold byoutfits like Columbia Gem House—are a good example. Ef-forts like these helped fuel the creation of the DiamondEmpowerment Fund in 2007 by Russell Simmons and in-dustry leaders. (The DEF funds efforts that empower resi-dents of diamond-producing communities.) Meanwhile, theDEF’s Diamonds Do Good initiative highlights stories thatrecount how buying diamonds is a catalyst for upliftingcommunities. [Obtain a free Diamonds Do Good toolkit byphoning 212-359-4219.]

“Thanks to diamonds, millions of people in India have jobsand millions of dollars are spent on charities,” says Erik Jens,head of diamond and jewelry clients for AMRO Bank in Am-sterdam. “Botswana would never be as prosperous andstrong as it is now without diamonds. These are the storieswe need to tell!”

Decades of De Beers-funded marketing efforts have boostedits business and that of others—small outfits capitalize onmillions of dollars of generic diamond ads by showing clientsthe silhouettes reflected in them. De Beers democratized di-amonds, and now whenever jewelry brands advertise, othersbenefit from a halo effect. “If Tiffany & Co. advertises cush-ion-shape diamonds, then sales of cushion shapes rise in de-mand beyondTiffany,” observes Golan.

Social-media platforms such as Instagram also enable the ro-mancing of shoppers. Retailers use Instagram to promote jew-els for sale, and emerging designers who can’t land retailaccounts use it to sell pieces directly to consumers. These virtualmeeting spaces permit myriad direct connections with jewelry-loving consumers. “Social media saved my business after theglobal financial crash in 2008,” says designer Wendy Brandes.

And while Myriam Gumuchian’s family-run and named dia-mond-jewelry-making business has operated under theradar—at the request of retailers—in the U.S. since 1978,she’s investigating the idea of e-commerce to consumers.The rising popularity of business-to-consumer sales feelsawkward but may be worth pursuing.

Consumers live in an instant-gratification world and want toknow where pieces are available and how much they cost.Gumuchian addresses some of those questions on socialmedia—and could answer more through an e-commerce-en-abled shopping platform—if retailers don’t answer quicklyenough (many often don’t). The point: don’t lose the attentionor the sale. “Some retailers get it and have all of their mer-chandise online, but this is taking too long,” adds Gumuchianabout many technology-averse mom-and-pop merchants. Online touch points help fuel an ongoing and snowballingconversation about jewelry that helps elevate it in the eyes

of a public whose discretionary income is constantly beingsolicited by other industries. “Jewelers say the Internet is theenemy, but it should be part of their business model,” ob-serves Smith. “Millennials and Generation Z need it to feellike valued customers.”

Consumers can also fall in love with specific segments ofjewelry if presented in a convincing manner. Case in point:champagne diamonds, a product category with which jewel-ers have a complicated past. “Twenty-eight years ago, jewel-

DIAMOND DESIRE

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ers would hang up the phoneon me because they felt thatbrown diamonds weren’t realdiamonds for jewelry,” recol-lects Chatelain, who helpedRio Tinto introduce them tothe U.S. She did, however,make inroads with depart-ment stores, one of the out-lets where shoppers todaycan find Le Vian’s line oftrademarked Chocolate Dia-monds—browns selectedbased on “high color, clarity,and cut standards,” saysEddie Le Vian, CEO.He credits the niche’s 17-year success to both a $50million-a-year TV campaignand the stones’ rarity. “Nat-ural fancy-color diamondsare about to become muchrarer as Argyle has an-nounced the closing of themine by 2021,” he says ofthe Rio Tinto mine that pro-duces the stones.

Julie Romanenko, founderof Just Jules and presidentof the 60-member Contem-porar y Jewelr y DesignGroup, uses opaque dia-monds. Like many of herCJDG peers (think ToddReed), she finds opaque dia-monds to be edgy, lesscostly than colorless, andeach is a one-of-a-kind. Thestones also appeal to the lesbian, gay, bisexual, and trans-gender communities for wedding rings, and to millennialswho spurn traditional white rocks but like the symbolismof diamonds in engagement rings.

Good design and marketing are crucial to embracing brownand included—but still attractive—diamonds in jewelry, ac-cording to Alan Bronstein, president of the Natural Color Di-amond Association, a group known for members who sellsuper rare hues like pink and blue. Browns and rustic-colordiamonds account for “99 percent of natural-color diamonds,”says Bronstein, who wants the industry to cast aside nega-tive personal opinions about their beauty.

“Let consumers make up their own minds,” he says.“The commercial colors are waiting to be exploited butfirst need to be explained.”

MESSAGING MAKES THEDIFFERENCESome in the industry areahead of the curve in con-sumer courtships. Amongthem: Tara Silberberg of TheClay Pot in Brooklyn, N.Y., andLower Manhattan. The sec-ond-generation store ownerdoes what most merchantsfear, including selling lab-grown diamonds (next to nat-urally mined, no less) andselling online. What she’slearned in doing so compelsher to step even further out-side her comfort zone to selldiamond engagement ringsonline. “Customers are justso conditioned to it now,” sheobserves. Plus, clients nowrealize that who you buy frommatters. “Shoppers are say-ing, ‘Is it wise for me to buythis expensive thing fromsomeone I don’t know?’” sheexplains. “Maybe I should goto a store.”

And though the current realityof Andy Koehn of Koehn &Koehn Jewelers in WestBend, Wis., is lighter storetraffic, the earnestness of hisshoppers has increased. Awoman who recently wan-dered into the shop lookingfor an engagement ring foundsolace in the styles and the

service. “All the chain stores wanted me to do was fill out acredit card application,” she said. Says Koehn: “What we domatters—we have the opportunity for people to bring theirspecial moments to us.”

Still, the best communication with consumers may bethrough relatable designs. Signet learned this firsthand withits Ever Us two-stone rings; on an early 2016 conference call,then-CEO Mark Light declared the campaign both a “grandslam” and a pleasant problem, since some locations ran outof the product. “What sends people to the store are designconcepts,” notes Golan. u

Jennifer Heebner is a jewelry industry editor and journalist,product specialist, blogger and speaker.

DIAMOND DESIRE

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