By Whitney Sielaff
wsielaff@nationaljeweler.com
Whitney 1

The Diamond Trading Co. (DTC) is stepping back into its old role, somewhat like the pre-morph De Beers. Its newly announced consumer ad campaign, planned at double the spend of last year, will be one of the best drivers we have available to us this year.

Back in the day, De Beers, as diamond-category marketing cartel, stabilized prices by controlling supply and stimulating demand, following the textbook economic equation. Since officially renouncing its roll as supply governor, however, the company has also made cuts to its demand-driving engine for the U.S. market. 

But this current recession is the first time the global diamond trade has faced a down market without a price-controlled market. It's become obvious that many diamond companies are very uncomfortable in these unknown waters.
Diamantaires are publicly announcing that prices are strong and that our trade has no need to worry. But methinks the lady doth protest too much. In a world where financing is already in crisis mode and diamond companies are judged for the value of their inventories, a pricing devaluation as we're seeing across other commodities could be catastrophic.
De Beers has stepped in on both sides of the equation. It's reportedly cut back on the size of the final two of its annual 10 sights to tighten supply. But even more important for retailers, it's doubled the size of its U.S. holiday ad spend, which, given the state of media and, subsequently, advertising rates, should get the message out often, loud and clear. This will be very beneficial to our trade as we face one of the most challenging holiday seasons on record.




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