Despite its waning influence on the diamond market the DTC remains the largest, if not the only player on the field able to affect change. It is their victory of sorts, albeit a dubious one, that much of the industry is in a state of limbo and disarray since the 'reorganisation' (to use one of the sanitised euphemisms for the first phase of their pruning operation) threw almost thirty sightholders out into the cold.
The anger, resentment and despair are understandable in some of the rejected. Those who helpfully tell them 'I told you so' are not only lacking in tact but are also missing the point. Despite the grumbling and groaning of many, the truth is that the industry could not forever remain stuck in the colonialist era, with a small club of the elite obtaining goods through special privilege and distributing it at a profit to the hungry masses. The ball that the DTC started rolling a few years ago when they first introduced the SOC program, is now gaining momentum and inevitably the face of the market is changing.
Their strategy for dragging the diamond industry into the twenty-first century was either devilishly clever, naïve and simplistic or a blind knee-jerk reaction. We, of course, can only guess. But some results are beginning to show and its effects can be seen beyond the select group of sightholders. For, not holding a sight, no longer condemns a player to second tier status, any more than having the privilege guarantees success.
Indeed, by dropping their overt drive towards branding and downstream influence as the only acceptable way forward, the DTC have plugged the one really glaring fault in their program. By promising to reward success, attained by whatever method or strategy (and I have reason to believe that is ultimately their new position) they are finally allowing the full arsenal in the market's forces to be unleashed. With a torrent of energy welled up behind some of those now at a crossroads, they have created a climate where imaginations will have to be taxed for the fittest to survive and prosper.
In line with other industries, success in the diamond manufacturing of the future will belong to those who are best able to bring goods to the market consistently, efficiently and cost effectively. And regardless of what the DTC will have their sightholders believe, supply will somehow always be available to those who have their demand lined up.
I once spent a few days under observation in a hospital sleep clinic to see if the insomnia that allows me to get by on 3 to 4 hours of sleep a night is damaging my health. It was a nightmare. The long hours between when the last visitor is forced to leave at midnight and the blessed rude entry of the first nurse at 5am with a determinedly cheerful 'Good morning!’ felt like solitary confinement. I took to roving the corridors in the small hours searching for other signs of life.
There are surprisingly few! Most hospital staff on wake aren't actually awake most of the time, I noticed. They bumble around like glassy-eyed zombies whenever some piece of technology forcibly drags them from the chair they are semi-dosing in and they return to it with alacrity, only staying awake for long enough to stare at me resentfully before their eyelids start hooding and their heads start a graceful bobbing ritual as their brain, from wherever their consciousness is sliding to, convinces them they are really awake.
A doctor in casualty with whom I shared forbidden smokes outside, explained that the long shifts are designed for a purpose. Apparently, medical staff must sometimes work 18 or 20 hours in a row, twice a week, with limited sleep time in between and under horrendously stressful conditions just to see if they are able to operate under duress. Rather than fail the weaker elements in exams, the Darwinian selection procedure is designed to make them crack and leave of their own volition. Soldiers, he assured me, undergo similar procedures in training.
The diamond industry has no head doctors who can force executives to show they are capable. The DTC and its brokers are far too busy placating their golden-egg-laying geese to encourage them to explore pastures new or deviate from their prescribed line, even when toeing it becomes obviously unrealistic. The diamond bourses and other players on an institutional level have little power to affect change on their own and the implementation of mid to long term strategic planning requires much more coercion and resources than they will bring. We marketing advisers meanwhile, tend to be far too busy protecting our own behinds to be able to afford to kick sense into our clients'.
It is comforting to think that the drive to separate the mice from the men, intentionally or otherwise, might provoke some into proving themselves, by succeeding in defiance of the hitherto accepted guidance, for the good of us all.
Showing posts with label sightholders. Show all posts
Showing posts with label sightholders. Show all posts
Friday, 1 February 2008
Sunday, 1 July 2007
The Meltdown
The most vociferous arguments against branding for diamonds come from the sightholders who have tried it and failed. They are no small group. The graveyard of the industry is littered with the remains of many an expensive experiment, often never even officially laid to rest. Most lie, ignominiously discarded in filing cabinets, ignored and forgotten, only to be dusted down every few years when the DTC SOC questionnaire arrives. A name, duly registered and trademarked, a slick print-advert extolling its virtues and of course, a jaw-dropping price tag, jaded testimony to their owners’ commitment to modern and downstream marketing techniques.
To be fair, despite the ongoing hype and the pressure put on the larger players in the market to create branding for their wares, the naysayers are not entirely wrong. The truth is, the days when a (large) budget, crisp and convincing visuals and enough pages and airtime were all you needed to launch and maintain a new worldwide brand, are definitely over.
The global infotainment culture is changing. The big national TV and media channels are steadily losing influence. In their place multiple, localised and specialist channels jostle to provide personalised content direct to users. Meanwhile the Internet is fast becoming the medium of choice for news and information. The captive audience, that we advertisers could once bewitch with our carefully crafted spells, have wised-up and now take their news, information and entertainment on their own terms, in their own time and relatively ad free.
Even the world’s top brands like Coke and MacDonald’s are drastically scaling back their classic advertising budgets. In its place they are concentrating their efforts on more novel and exciting ways of attracting customers to absorb their message. Smirnoff, the vodka people, are paying game developers to incorporate their product in popular video games. Car manufacturers Toyota paid $16 million to have their cars featured on popular the USA TV show The Contenders. Creditcard company AmEx hired popular comedian, Jerry Sienfeld, to play in an extended play, online advertainment campaign. Even more lucrative, for those that can get it, is news placement, although, whether the Hilton chain is cashing in on their name’s antics after (and behind) bars, is debateable.
Diamonds are not like cars or soap powder, it is true. You do not try, or even want to, reach every single household in the developed world with your diamond branding; unless you have come up with an idea as good as the diamond engagement-ring, which has. But the target audience for ‘iced’ jewellery has been extensively touched by the efforts of the industry of the last five years and it is worth noting that most of the successes that have been booked in diamond (jewellery) branding have come at the expense of those before. There is very little actual growth of the market in branded goods and practically no consistent evidence of customers being attracted to buy a diamond instead of some other luxury gift, because of the branding. (A phenomenon mysteriously referred to as ‘increased incremental demand’ in DTC speak, despite there being no increment that I can ascertain).
There is some good news in the market, although not everybody is entirely sure how to deal with it. Bling is in! But, it is not every diamantaire’s dream to feature prominently, as the supplier of diamonds to firms like GangstaGold, selling personalised gold teeth and $17.000 diamond encrusted dogcollar, to the hip-hop generation or itsmybinky.com who do a diamond encrusted baby’s dummy.
The bling revolution is deliberately in-your-face, in line with the whole gangsta rap culture. The fact that the establishment is uncomfortable with it is actually necessary to make it credible. And yes, it does stand in stark contrast to the caring, sharing, family orientated, Love Forever image that the DTC and the diamond establishment promote. But the denim jeans also started out as a protest garment and today it is Versace and Dolce and Gabbana versions, adorning the posteriors that protesting bling-wearers most want to kick.
Not that I am promoting a massive rush to push for delights like a diamond studded ‘IceBox’ for storing crack cocaine. I do not believe it is necessary or desirable to destroy the very successful link that has been made in human minds, between diamonds and eternal love. I am saying that the brands of tomorrow will probably not fit into the mould that has been constructed. The ‘I love you’ part of the human relationship has practically been covered ad nauseam and it is up to the industry to create the new buzz that will lure new customers to the diamond counter.
As long as diamonds are available, creative minds will be searching for ways to convince consumers to buy them. But it will be totally new concepts and novel new uses that will capture the hearts and wallets of the cyber generation, not pretty pictures of beautiful jewellery with inventive names.
To be fair, despite the ongoing hype and the pressure put on the larger players in the market to create branding for their wares, the naysayers are not entirely wrong. The truth is, the days when a (large) budget, crisp and convincing visuals and enough pages and airtime were all you needed to launch and maintain a new worldwide brand, are definitely over.
The global infotainment culture is changing. The big national TV and media channels are steadily losing influence. In their place multiple, localised and specialist channels jostle to provide personalised content direct to users. Meanwhile the Internet is fast becoming the medium of choice for news and information. The captive audience, that we advertisers could once bewitch with our carefully crafted spells, have wised-up and now take their news, information and entertainment on their own terms, in their own time and relatively ad free.
Even the world’s top brands like Coke and MacDonald’s are drastically scaling back their classic advertising budgets. In its place they are concentrating their efforts on more novel and exciting ways of attracting customers to absorb their message. Smirnoff, the vodka people, are paying game developers to incorporate their product in popular video games. Car manufacturers Toyota paid $16 million to have their cars featured on popular the USA TV show The Contenders. Creditcard company AmEx hired popular comedian, Jerry Sienfeld, to play in an extended play, online advertainment campaign. Even more lucrative, for those that can get it, is news placement, although, whether the Hilton chain is cashing in on their name’s antics after (and behind) bars, is debateable.
Diamonds are not like cars or soap powder, it is true. You do not try, or even want to, reach every single household in the developed world with your diamond branding; unless you have come up with an idea as good as the diamond engagement-ring, which has. But the target audience for ‘iced’ jewellery has been extensively touched by the efforts of the industry of the last five years and it is worth noting that most of the successes that have been booked in diamond (jewellery) branding have come at the expense of those before. There is very little actual growth of the market in branded goods and practically no consistent evidence of customers being attracted to buy a diamond instead of some other luxury gift, because of the branding. (A phenomenon mysteriously referred to as ‘increased incremental demand’ in DTC speak, despite there being no increment that I can ascertain).
There is some good news in the market, although not everybody is entirely sure how to deal with it. Bling is in! But, it is not every diamantaire’s dream to feature prominently, as the supplier of diamonds to firms like GangstaGold, selling personalised gold teeth and $17.000 diamond encrusted dogcollar, to the hip-hop generation or itsmybinky.com who do a diamond encrusted baby’s dummy.
The bling revolution is deliberately in-your-face, in line with the whole gangsta rap culture. The fact that the establishment is uncomfortable with it is actually necessary to make it credible. And yes, it does stand in stark contrast to the caring, sharing, family orientated, Love Forever image that the DTC and the diamond establishment promote. But the denim jeans also started out as a protest garment and today it is Versace and Dolce and Gabbana versions, adorning the posteriors that protesting bling-wearers most want to kick.
Not that I am promoting a massive rush to push for delights like a diamond studded ‘IceBox’ for storing crack cocaine. I do not believe it is necessary or desirable to destroy the very successful link that has been made in human minds, between diamonds and eternal love. I am saying that the brands of tomorrow will probably not fit into the mould that has been constructed. The ‘I love you’ part of the human relationship has practically been covered ad nauseam and it is up to the industry to create the new buzz that will lure new customers to the diamond counter.
As long as diamonds are available, creative minds will be searching for ways to convince consumers to buy them. But it will be totally new concepts and novel new uses that will capture the hearts and wallets of the cyber generation, not pretty pictures of beautiful jewellery with inventive names.
Friday, 1 June 2007
The Branding Iron
With the amount of money spent on diamonds per annum, it is truly surprising that so few successful diamond brands exist. I would venture to say that no diamond brand commands enough market recognition to allow it to be considered a household name. This is not for lack of will. It is no secret that the DTC has been urging its sightholders to consider the branding route as a way of cementing market share, and thereby SOC status, since beginning with that scheme.
To be fair, it is far more difficult to brand a diamond than to brand a new face cream or sport shoe. Consumers do not usually buy diamonds, they buy jewellery. Most could hardly care less which company supplied the sparkle. Computer chip powerhouse Intel faced a similar problem when their chips were put into branded computers. Their novel approach was to have a distinctive ‘Intel inside’ sticker on new computers. This exposed many consumers to their brand and established their dominance, even for many who had never come across the name before.
De Beers, with their Eternity, Journeys, Trilogy and similar projects, have cleverly managed to franchise lines of jewellery with precisely defined groups of stones into the De Beers brand. Incorporating the stone into jewellery and branding the combination can also work.
The qualities, however, that make a successful diamond trader, are not necessarily those that make a good jewellery brand. Over the last five years, too many have attempted to widen their scope in that direction, only to hastily withdraw with much licking of wounds. I sympathise with the sightholders who resist the urge to tread into an area they know little about and concentrate, instead, on seeking a solution that involves branding the stone itself.
Vodka is often held up as an example of what branding should be. Vodka is colourless, flavourless and devoid of any aroma. In a blind taste, most of the people who insist on Absolut or Smirnoff would be unable to identify their own preference from a rival brand. Yet the Absolut drinker will not trade in his young, artistic and slightly avant-garde tipple for the imperial snobbery of tsarist Smirnoff nor the raunchy chutzpah of Eristoff’s identical beverage
The fact that a supermarket brand tastes, looks and smells the same too, at half the price, does not affect these buyers, because it is not just vodka they are buying. What they are buying into is the brand’s image. Having the distinctively shaped bottle on your table, identifies you to your fellow connoisseur, or exposes you to pitying glances from proponents of a rival brand.
Unlike vodka, however, diamonds are an industrial ingredient, only coming into their own for the consumer, when set into an attractive piece of jewellery. Whether you bought it in a lavish box, reading Hearts on Fire, The Love Diamond or just a much scribbled on diamond envelope, it can look identical once it is calling for attention from on your loved one’s finger or throat. This is a commonly aired argument against branded stones. The independently owned websites I visited advised consumers to ask to be shown a non-branded stone of similar specs and compare look and price.
The most obvious method route for creating distinction is by marketing a unique cut. The Buddha Cut (www.buddhadiamond.com), developed and marketed by Albert Haberkorn, is one good example of a diamond brand that is distinctive enough by virtue of its shape to make it appealing to a certain segment of the market. By registering the patenting rights to cutting diamonds in Buddha form, Haberkorn have shrewdly given their stone total dominance in that market and they can thus define their own pricing strategy, regardless of the cost of the raw material.
The Web Cut from Dali Diamond Co (www.webcut.com), and The Escada cut from the house Pluczenik (www.pluczekink.com) are two more examples of brands relying on a distinctive cutting shape in combination with established names for the visibility of their brands within the jewellery. However, it takes a lot a passion to develop a special cut and I do not think one should set out to do that, just for the purpose of having something to brand. It can be too painfully obvious when a diamond cut has simply been slightly manipulated, its difference noticeable only to a connoisseur, then marketed as better. The consumer has proved, moreover, by voting with its wallet, that it does not prefer diamonds looking like upturned pineapples, to the classic diamond cuts.
The real challenge out there is to create a brand name for a classic cut diamond, whose value supersedes the price of the goods producing it. With a name able to dominate its field in any given market, to the extent, that consumers within it will recognise that name as a synonym for diamond. And I am confident that what was done for vodka, for blue cotton trousers, and for the carbonated extract of cola nut juice, will be done for polished carbon too.
To be fair, it is far more difficult to brand a diamond than to brand a new face cream or sport shoe. Consumers do not usually buy diamonds, they buy jewellery. Most could hardly care less which company supplied the sparkle. Computer chip powerhouse Intel faced a similar problem when their chips were put into branded computers. Their novel approach was to have a distinctive ‘Intel inside’ sticker on new computers. This exposed many consumers to their brand and established their dominance, even for many who had never come across the name before.
De Beers, with their Eternity, Journeys, Trilogy and similar projects, have cleverly managed to franchise lines of jewellery with precisely defined groups of stones into the De Beers brand. Incorporating the stone into jewellery and branding the combination can also work.
The qualities, however, that make a successful diamond trader, are not necessarily those that make a good jewellery brand. Over the last five years, too many have attempted to widen their scope in that direction, only to hastily withdraw with much licking of wounds. I sympathise with the sightholders who resist the urge to tread into an area they know little about and concentrate, instead, on seeking a solution that involves branding the stone itself.
Vodka is often held up as an example of what branding should be. Vodka is colourless, flavourless and devoid of any aroma. In a blind taste, most of the people who insist on Absolut or Smirnoff would be unable to identify their own preference from a rival brand. Yet the Absolut drinker will not trade in his young, artistic and slightly avant-garde tipple for the imperial snobbery of tsarist Smirnoff nor the raunchy chutzpah of Eristoff’s identical beverage
The fact that a supermarket brand tastes, looks and smells the same too, at half the price, does not affect these buyers, because it is not just vodka they are buying. What they are buying into is the brand’s image. Having the distinctively shaped bottle on your table, identifies you to your fellow connoisseur, or exposes you to pitying glances from proponents of a rival brand.
Unlike vodka, however, diamonds are an industrial ingredient, only coming into their own for the consumer, when set into an attractive piece of jewellery. Whether you bought it in a lavish box, reading Hearts on Fire, The Love Diamond or just a much scribbled on diamond envelope, it can look identical once it is calling for attention from on your loved one’s finger or throat. This is a commonly aired argument against branded stones. The independently owned websites I visited advised consumers to ask to be shown a non-branded stone of similar specs and compare look and price.
The most obvious method route for creating distinction is by marketing a unique cut. The Buddha Cut (www.buddhadiamond.com), developed and marketed by Albert Haberkorn, is one good example of a diamond brand that is distinctive enough by virtue of its shape to make it appealing to a certain segment of the market. By registering the patenting rights to cutting diamonds in Buddha form, Haberkorn have shrewdly given their stone total dominance in that market and they can thus define their own pricing strategy, regardless of the cost of the raw material.
The Web Cut from Dali Diamond Co (www.webcut.com), and The Escada cut from the house Pluczenik (www.pluczekink.com) are two more examples of brands relying on a distinctive cutting shape in combination with established names for the visibility of their brands within the jewellery. However, it takes a lot a passion to develop a special cut and I do not think one should set out to do that, just for the purpose of having something to brand. It can be too painfully obvious when a diamond cut has simply been slightly manipulated, its difference noticeable only to a connoisseur, then marketed as better. The consumer has proved, moreover, by voting with its wallet, that it does not prefer diamonds looking like upturned pineapples, to the classic diamond cuts.
The real challenge out there is to create a brand name for a classic cut diamond, whose value supersedes the price of the goods producing it. With a name able to dominate its field in any given market, to the extent, that consumers within it will recognise that name as a synonym for diamond. And I am confident that what was done for vodka, for blue cotton trousers, and for the carbonated extract of cola nut juice, will be done for polished carbon too.
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