Generic marketing has done wonders for the green fruit. What’s holding the diamond trade back from creating similar campaigns?
When millennials tuck into their avocado toast, they probably don’t realize they’re going along with a successful marketing campaign that began decades ago. Sales and prices of the slippery green fruit have soared since the 1990s thanks to subtle efforts by avocado producers to reposition the once-unpopular item as a healthy, trendy food.
The diamond industry has gone the opposite way. Its own exemplary advertising slogan, De Beers’ “A Diamond Is Forever,” supported the trade for some 60 years until the miner stepped back from category marketing in 2008. Since then, US net diamond imports have fallen, going from $7.15 billion in 2007 to $3.96 billion in 2018, according to government data. The RapNet Diamond Index (RAPI™) for 1-carat polished stones has fallen 17.7% over the past decade.
Marketing diamonds involves considerations that might not apply to guacamole suppliers. For one thing, an engagement ring is a highly infrequent purchase that potentially costs thousands of dollars. But the rise of the avocado shows that category marketing can be effective in enticing consumers to buy a discretionary item, says Anish Aggarwal, a partner and co-founder of Antwerp-based diamond consultancy Gemdax.
“Fifteen years ago, avocado toast wasn’t a thing,” Aggarwal notes. “Now, the idea of eating avocado and avocado toast — you’ve almost got a culture around it. That is an example that we can learn from in the diamond industry: How you give positive stories — in the case of avocados, about health — and how you attach it to a change of lifestyle and a generational change.”
The same objectives — attaching a positive vibe to a product to make it cool — are on the diamond industry’s agenda. But the sector has no shortage of obstacles it must bypass to achieve those goals.
The first challenge is money. Advertising is increasingly expensive, as companies must put out huge amounts of content in the hope that something will stick in distracted consumers’ minds, explains Ben Smithee, CEO of New York-based digital-marketing agency The Smithee Group.
When Smithee’s company started out with social media almost a decade ago, it aimed to expose its content to customers three or four times a week, he recalls. “Right now, our gold metric is how do we get up to six to eight to 10 times, because that equates to two or three real engagements.”
At the same time, diamond-industry figures believe there isn’t enough cash going into marketing. The Diamond Producers Association (DPA) — an umbrella organization set up in 2015 to promote natural stones — derives its funding from De Beers, Alrosa and other large mining companies. In 2019, it had $70 million to $75 million at its disposal, compared with $6 million in 2016. But the trade needs more than that, according to Rapaport Group Chairman Martin Rapaport, who argued for a budget of $1 billion in his June 2019 speech at the JCK Las Vegas show.
Unity of purpose
Even with money, disseminating a single message is harder than it used to be because of how fragmented media has become, notes Elle Hill, CEO of jewelry consultancy firm Hill & Co.
“Back in the day, when De Beers was doing ‘A Diamond Is Forever,’ there were far fewer channels to reach the general public, and the cost was much more expeditious,” Hill explains. Since consumers acquire around 80% of their knowledge online, digital marketing is both crucial and hard to accomplish without deep pockets and detailed expertise, she says.
“It’s an error to think we should replicate what was successful before,” Hill continues, asserting that advertising needs to target specific groups, since consumers are also more focused on brands than they were before.
Photo © Rapaport, DR.