Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68NATIONAL JEWELER 47 R ough diamond prices remain high, financing is at an all-time low, profit margins are barely there and competition for the luxury dollar is growing as consumers face temptation on all fronts for their hard-earned cash. Those who are purchasing luxury goods constantly see adver- tising from other product categories with impeccably crafted and well-considered marketing campaigns that have the poten- tial to leave the diamond industry in the dust.Think: technology (Apple) and handbags (LouisVuitton, Chanel). After years of company-specific over industry-specific marketing, the newly formed Diamond Producers Association (DPA) is rolling out a marketing campaign aimed at increasing consumer desire for diamonds, specifically targeting the desir- able millennial demographic. The “Real is Rare. Real is a Diamond.” promotion, the first industry-wide marketing campaign in more than five years, is a result of DPAresearch on millennials, which revealed that while younger buyers see the appeal of diamonds, it takes more than a catchy tagline to propel them to buy. “We are creating a new language and conversation around diamonds, much closer to the reality of today’s consumers, while remaining aspirational,” explains DPA CEO Jean-Marc Lieberherr. “It is time for us to rebuild the diamond brand in a way that maximizes its relevance for younger generations and will ensure that promotional investments then generate the right returns because they are made on fertile grounds … Of course, other aspects of the diamond experience also need to be reviewed, from product designs to communication and critically the in-store experience,” he admits. But, Lieberherr notes, the new campaign is a good place to start. “Every year that passes makes it more expensive to rebuild eroding brand equity. It is a dangerous lose-lose cycle.What the industry has to do now is to focus on building a strong diamond equity base, create an emotional connection, and divert some investment from short to longer term.” THE GREAT LAB-GROWN DEBATE Despite the unified marketing front, external forces could also sour the diamond dream. According to Bain & Company Inc.’s December 2015 Luxury Goods Worldwide Market Study, real luxury spending has slowed. “The slowdown,” the report states, “confirms a shift to a ‘new normal’ of lower sales growth in the personal luxury goods market.” Among specific categories of personal luxury goods, hard luxury, which includes jewelry, contracted by 3 percent. Perhaps the only good news is that jewelry led the hard luxury sector, growing at 6 percent at constant exchange rates. One of the problems, concludes Bain, is that price-conscious luxury shoppers are “struggling to reconcile the price of luxury products with their real value.” No wonder some younger buyers see better value in lab- grown over mined diamonds. While millennials crave what the DPAresearch termed “real connections,” “real” does not necessarily mean mined when it comes to diamonds. This younger, information-savvy, demographic is more willing to look at alternatives to diamonds, which some perceive to be environmentally harmful or unethical. Despite the work of the Kimberley Process and organizations within the industry in almost completely stamping out the trade in conflict diamonds, some of the bad press from the Blood Diamond era lingers. In its Game of Stones – Lab vs. Pipe research analysis, Mor- gan Stanley projects that lab-grown diamonds could have a 7.5 percent share in sales of larger diamonds by 2020. However, it is unlikely the lab-grown market will manage to disrupt the mined industry in a serious way. “The most likely scenario is that the lab-grown diamond market finds its own niche, increasing the diamond jewelry The diamond industry is in a period of flux, with changes, shifts and challenges assailing it from all directions. This photo from De Beers Group shows a rough diamond on a polishing wheel.