Our goal is to create a think tank, which will come up with ideas how to reach outside our closed circuit and bring people the message about diamonds, tell why they should buy them.
The World Diamond Mark® Foundation (WDMF) in a non-for-profit organization founded in 2012 by the World Federation of Diamond Bourses whose goal is to increase consumer demand for diamonds and enhance the trust in them.
To reach this goal, the WDMF is engaged in generic marketing programmes, raises public awareness of diamonds, educates retailers and conducts attestation of the Authorised Diamond Dealers® (ADD). The Foundation’s Chairman and CEO, Alex Popov gave this interview to Rough&Polished on the eve of the inaugural World Diamond Conference to be held in New Delhi.
The World Diamond Mark is co-organising the first World Diamond Conference. What is the difference between this event and other industry gatherings? Will the conference become a regular event?
The important area of World Diamond Mark activities is organising diamond marketing events. We planned to do such conference in Hong Kong next March, but realised that there were too many events coming at the same time and decided to switch it to India, capitalising on the positive feelings created by the state visit of the Russian President there.
We will make the World Diamond Conference a brand and do it regularly. We even designed the logo of the conference in a way that the name of the host country is placed separately, that hints on the intention to do it each time in a different country.
Each year we attend ca. 5-6 industry gatherings that differ by place but always include same participants. Usually it is about highlighting some specific place or specific organization. We wanted to change that and try to do something different, related to the traditional diamond industry only by name. It’s all about marketing, nothing else. We put together miners and retailers, trying not to repeat what has been done before. Hence a careful choice of moderators.
How widely will the industry be represented at this gathering?
The host and our partner in organising this event is the Indian Gem & Jewellery Export Promotion Council (GJEPC), supported by the Ministry of Commerce and Industry, Government of India. As I said, the issues to be raised at the conference touch the whole industry. Among the participants, there will be diamond-mining companies, manufacturers, dealers, brands, retailers and industry organizations.
The goal of this conference is to create a platform to discuss joint contribution to enlarge the market share for diamonds in luxury spending. After De Beers abandoned generic marketing, there was an attempt to revive it in July 2009, in Saint Petersburg, where the International Diamond Board (IDB) was formed, but it went nowhere. Will the conference raise the issue of generic promotion again, or will it offer something different?
The task that we have taken upon ourselves is not easy and possibly out of reach for someone acting on his own. We need to hear what other people have to say on the subject. We need to challenge everybody to engage in serious and open discussion. This will be done in the first part of the conference.
The second part will be devoted to a branding session where we’ll try to involve people not necessarily related to the diamond industry.
Take, for example, Nadja Swarovski. She is not directly related to the diamond industry, but she managed to transform the Swarowski family company into a world brand that makes four billion dollars annually from sand. I think it is admirable and we need to learn from such people.
We need to comprehend that this industry needs such people, entrepreneurs who live in the modern world and can see around, not through the loupe alone. Unfortunately, those are still rare in our industry. We still live in the past century, if not in the one before it. We need to listen to what other people think and then decide whether it is interesting for us or not.
One of the aims of our foundation is to create a think tank, which will come up with ideas how to reach outside our closed circuit and bring people the message about diamonds, tell why they should buy them. This – without losing the unique features of our community like mutual trust, handshake deals, etc. Yes, the IDB idea was excellent. It brought together an array of distinguished people, but it didn’t work out. There are thousands of reasons why. Everybody has his or her own opinion. I think there was a combination of such reasons.
We studied the IDB experience. The principal difference between WDM and them is one: we see the retailers at the cornerstone of the programme. Usually retailers are considered the last link in the diamond supply chain. I think that it is completely the opposite – they are the first and the only link in the eyes of the consumer.
A person purchasing a diamond is doing that out of emotional necessity. The same is true also for investors. Who meets these emotions? The vendor behind the counter. Here the fate of the deal is sealed. And with each such deal, the fate of the future of our industry. The conference will deal exactly with that.
“A person purchasing a diamond is doing that out of emotional necessity. The same is true also for investors. Who meets these emotions? The vendor behind the counter.”
Generic marketing is one of the World Diamond Mark’s activities. You have been working on that for some time. What is the main problem you face?
The definition of the problem is simple. Our industry’s growth lags behind other luxury items by almost 60%. What’s more, if prices in other luxury segments go up steadily, ours are zigzagging somewhere at the lower part of the graph. That means that something is not right. We think we understand where the problem lies, but we can make a mistake. Therefore, we would like to hear from all industry stakeholders, as well as from outside experts. If we correctly identify the problem, the job will be half-done.
Other competing sectors are constantly moving forward. They have plenty of cash. This is the clients’ money, which actually could be ours. I refer, first and foremost, to leather accessories (bags and shoes) and electronic gadgets. And what about the performance of watches? Any watches.
As one of the ways out of this situation, the World Diamond Mark has developed the attestation programme for Authorised Diamond Dealers (ADD). If we will roll out twenty thousand ADD stores in three years, it will help to solve the problem.
Tell me about the Authorised Diamond Dealer programme and about what you have already accomplished within its framework.
Speaking of the ADD programme, we would like to achieve a situation where customers contemplating a diamond purchase would always prefer to approach an Authorised Diamond Dealer, knowing that there they would get proper advice and make a safe and responsible purchase.
We need to bear in mind though that each sector has several market layers. We have a very good high level – Graff, Cartier, Tiffany and others. There are no problems there. People wait to get some desired piece, and will continue to wait as more and more people have money to spend and less and less big stones are available. We also have a low level, like the 47th Street, where everything is bought and sold at bottom prices, if one knows how to look for bargains and negotiate.
Right now, these people aged 25 to 45 are not reached out to. However, they have money and they spend it – on trips, cars, phones. In business, there are women who have no zest for jewelry altogether, they do not even pierce their ears. Or take the younger generation, especially those addicted to information technologies. They do not go out of the house. How do you think we can reach them? “Right now, these people aged 25 to 45 are not reached out to. However, they have money and they spend it.”
Right now, these people aged 25 to 45 are not reached out to. However, they have money and they spend it – on trips, cars, phones. In business, there are women who have no zest for jewelry altogether, they do not even pierce their ears. Or take the younger generation, especially those addicted to information technologies. They do not go out of the house. How do you think we can reach them?
“Right now, these people aged 25 to 45 are not reached out to. However, they have money and they spend it.”
Why am I saying this – if you create a chain of retail stores, which would receive from us something that distinguishes them from others (for instance, training courses for diamond sales), in other words, a package of services from a provider that includes, for example, access to price lists, to diamond stocks, to sales programs, to reduced commissions from Visa or MasterCard, it will attract everyone.
In addition, we are making a site, where you will see a list of stores officially selling diamonds. We want to reach out to consumers and tell them that these stores are verified by the World Diamond Mark and acquired the status of Authorized Diamond Dealer assuming certain obligations. Currently, we are working in this direction with large jewelry chains expecting the emergence of path-breaking stores authorized as diamond dealers by the World Diamond Mark.
What are the main events in the activities of the World Diamond Mark since its inception, and your immediate plans?
We have been talking about ourselves so much that it seems that we exist for many years. We exist one year only, officially. In 2010, we met in Moscow and started “brainstorming”. In 2011, we came up with the idea, which was then approved at the Congress in Dubai in April of the same year. In October of 2012, we made a presentation of our concept. In June of 2013, in Istanbul we decided to establish a foundation and spent one year to do it. Now we are busy doing our work.
At some point, we realized that we need to learn from the World Gold Council. They earn money by organizing events. And we took this path. Dubai held a conference at which we took the floor. Now we shall have the Dubai Shopping Festival in January of 2015, where we take part as the World Diamond Mark and where in support of retailers there will be an everyday lottery to give away one-carat diamonds. This is an entire marketing affair, a very serious one.
We are also working on a project that will be implemented in April next year, also in Dubai, under the name of World Diamond Tour. It is a diamond exhibition, which will move from place to place. It is something like the Millennium Diamond Exhibition held in London. In Dubai, which won the right to host the Expo 2020, we are arranging an event in which we offer 20 stones of 20 carats each.
As a matter of fact, these events are self-financing because they always involve local sponsors. In connection with this, I hope that somewhere in March 2015 we will have about a thousand of authorized diamond dealers and a little money in the bank to do the rest. And by the end of next year, probably four thousand.
Over the past 15 years, the world has changed very seriously in all respects. The idea of De Beers expressed in the slogan “A diamond is forever” is a terrific idea. But it was good when there was an information vacuum and when society was built on traditional values. Today, things are different. Of course, more and more companies are working on how to find their way to younger buyers. Our task is to make sure that people know what a diamond is.
For example, we are thinking about creating an animated series about diamonds for ten-year old girls – this is for the long term. Or there is an idea to create online communities that would join efforts to give diamond gifts to their friends and relatives on occasions, which are important for them. Generally, we plan a number of marketing stratagems aimed at young people. If we will not make them feel all this now, in ten years from now it will be late.
This is why we got in touch with a whole group of young people who are committed to generate all sorts of crazy ideas. And I strongly support this, because it is interesting and because only this may produce some effect.
Besides their emotional component, diamonds have a price component as well, and if buyers were confident in their ability to preserve value, they would be willing to buy them. Don’t you think so?
Yes, this is so, and the industry is doing something in this respect. Attempts are being made to create a diamond-exchange price list. The IDEX Exchange, for example, publishes a price list based on data obtained from the market. Despite some flaws, this is a good price-list, it is correct. Yes, coming out of the store, the buyer should understand that the diamond just bought went down in price, but to a certain extent, of which the diamond industry should take care. And it is a question of branding. If there is a transparent pricing system, you can do your calculations and you can even think of futures transactions. I think this will be discussed as well.
In your opinion, how much generic marketing may be affected due to the fact that some banks chose to abandon the diamond industry?
In the early 2000s, major investment banks established species units dealing with works of art, jewelry, diamonds, and so on. These units were interested in everything that was happening in the market and came to the conclusion that it was impossible to deal with diamantaires – they are too closed. So today, banks advise their clients to buy contemporary art and antiques.
If the diamond industry will not make itself open, banks will not open funding as well. They abandoned the industry not because they don’t like diamonds. They do not like us as human beings, because we are secretive and do not want to tell the truth to banks. But in five or ten years, when the younger and more educated generation will come to run companies there will be a leap forward, because transparency and banking for them are natural and simple things.
Banks are pleading diamantaires to bring their books in order. And this whole industry, if it is to work today, should hire – for money – professionals, who have nothing to do with the diamond industry, financiers, marketing experts from the textile or engineering industries – it does not matter, – but who will prepare any company in such a way that any bank would give it money. It is not the fault of banks. They leave because the clientele does not fit the contemporary requirements of banks, and if the customers will not change, the funding will end. But those who changed their way of thinking, they feel lovely dealing with banks.
What do you expect from the World Diamond Conference in New Delhi?
I’ll tell you what I would have been pleased with. I always look forward to more and would be pleased if the result of this conference would be some resolution, in line with which we at the World Diamond Mark Foundation could create a “think tank” to be attended by all players of the diamond industry and where we could discuss these issues and take decisions once every six months or via conference calls. This is in the first place. Secondly, I would like to use it as a springboard to signing agreements on authorized dealership with several large retailers.