“The objective of the ‘Part of You™’ campaign is to revive consumer interest in diamonds and diamond jewellery at the retailer counter level.”
Founded by the World Federation of Diamond Bourses in 2012, The World Diamond Mark (WDM) aims to rekindle the consumers’ enthusiasm for diamonds and diamond jewellery and consequently, boost demand for natural diamonds throughout the diamond supply pipeline. Further to their efforts in raising public awareness of diamonds, educating retailers and generic marketing programmes, WDM has launched its global diamond retailer promotion campaign ‘Part of You™’ at JCK Las Vegas 2017. In an exclusive interview given to Floroscent, the CEO and Chairman Alex Popov spoke about WDM’s role as a catalyst when setting out to revive consumer confidence in diamonds, outlines the objectives of their latest campaign, offered insights into the diamond market and a lot more.
The World Diamond Mark has recently launched the Part of You™ campaign at the JCK Las Vegas 2017. Kindly tell us about the objectives of the campaign and what are your expectations from it?
The objectives of the Part of You™ campaign is same as that of the World Diamond Mark – to revive consumer interest in diamonds and diamond jewellery at the retailer counter level. We are aiming to change the way the retailers treat their customers and providing the former with tools that will create more emotio
nal connect and eventually, improve the sales and profitability.
At present, there has been a steady demand for rough diamonds, despite the industry entering a typically quieter season. How do you look at the current market scenario? Do you think the market sentiment will remain positive for some time now?
We haven’t yet seen the transformation from rough to polished diamonds with healthy profits. At best, the manufacturers’ margins are being eroded further. This is not sustainable in the long run.
Generic marketing is one of the World Diamond Mark’s activities. What measures need to be taken to encourage younger generation/ millennials to buy diamond jewellery?
As I said we are concentrating on the retailers, providing them with tools to engage in their own marketing and constantly, improve the knowledge of their personnel. Even though the younger generation or millennials form the important segment of the market, there still is an untouched potential elsewhere. The millennials are looking for experience and that’s what we aim to provide via our Part of You™ campaign.
Sales of other luxury products like smart phones are overpowering the sales of diamond jewellery across the globe, as people are more interested in buying a new gadget than buying diamonds? Do you agree with this trend? How the diamond industry can secure its market share?
The important phenomena are that contemporary buyers are not driven by price but rather by status symbol and desire to experience and to share this experience with their peers. This is not about preference of gadgets over diamonds. This is about preference of socially accepted phenomena over not-so-accepted. Here lies the challenge to make diamonds more socially accepted by returning to experience and being true and transparent in our message to consumers.
What is the situation in the diamond financing scenario in the world? Do you think that there is a credit risk at the moment?
The situation with diamond financing continues to be dire. There is no and never been a credit risk in the established diamond industry. The reason of the financing crunch was and remains the banking crisis of 2011 and the consequences of the measures taken by regulators and banking community to improve their compliance procedures. Our industry has found itself not ready for this transformation, hence the financing issues. This will gradually come back to normal with the diamond industry taking necessary measures to improve transparency and compliance procedures.
Please give us your evaluation about the current status of the diamond industry.
The outlook for sales of (natural) diamonds remains positive, as has been pointed out in the recent reports including Bain & Co. Demand will continue to rise, while supply will not be able to follow. The diamond industry and trade, and with it the WDM, however, will need to up the ante to assure that the consumers remain interested in diamonds. Our Part of You™ campaign reflects that endeavour. The mid-stream sector however, on behalf of which the WDM operates, will need to rally behind our efforts and realise that only if we help ourselves and our immediate target audience i.e. the retail jewellers, we will be able to make an impact.
There has been an upward trend in synthetic diamonds in the worldwide market. Although the synthetic production at present is way behind the natural diamonds, the threat to the diamond industry cannot be ruled out completely, given the cases of synthetics polluting the natural diamond supply chain. How the industry can maintain confidence in natural diamonds?
The synthetic diamonds are here to stay. I foresee that the synthetics will gradually make manufacturing of small size SI melee unfeasible. The low-quality goods will lose their appeal and will be replaced by high quality synthetics at the same price. Big brands will continue to use only high quality small goods and this segment will be divided into two distinctive layers serving two distinctive markets.
Bigger goods, from 10 pointers to one carat, will not be seriously affected as the synthetics will open additional markets for those who cannot afford natural diamonds.
The issue of ‘pollution’ is almost solved by introduction of machines and by insistence of big brands to screen all their supply. It has become similar to how the fashion industry addresses its foes – counterfeit goods, polluting the legitimate industry. Fashion has found the solution by going directly to consumer. We, at the World Diamond Mark, are doing exactly the same – insisting that our retailers don’t carry synthetics in the same store with natural diamonds. This is the best policy to avoid any pollution and enhance consumer confidence.
As per reports, rough diamond producers continued to lower rough prices by around five per cent in 2016, while maintaining production close to 2015 levels (128 million carats). Do you expect rough prices to remain stable this year?
As I said earlier, the margins are still not healthy and this is not sustainable. Therefore, the rough prices will probably remain stable and not rise dramatically.
What are the main factors that will impact diamond’s demand and revenues in the second half of 2017?
Hopefully, the DPA’s generic promotion from the top and WDM retailer efforts from the bottom will bear fruit in the second part and the 2018, to stabilise diamond demand and prepare for the healthier years ahead.
What is WDM’s roadmap for the future in terms of growth and expansion?
The short answer is, to get as many retail jewellers on board with the Part of You™ campaign and the WDM Authorised Diamond Dealer programme. The more retailers join us, the better we can drive consumer traffic to them! To succeed, we need broad support and during the past few months, we have been generating a lot of interest. Allow me to quote an industry consultant who participated in our Keynote talk at JCK in Las Vegas, this June. Commenting on the Part of You™™ campaign, one of the attendees, Dan Deans, senior business manager, Asurion of Virginia, USA, a leading service plan provider in the jewellery industry, said: “The WDM not only understands how to appeal to today’s diverse and demanding consumer but also what tools to deliver to the retailer to engage the consumer into a conversation. I believe the format and content of this campaign will be highly appealing to consumers. The formatting and content of your campaign is effective and participating retailers will no doubt benefit from its implementation and messaging.”