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Issues confronting the diamond industry were discussed at JCK Las Vegas. Source: Argyle Pink Diamonds
Issues confronting the diamond industry were discussed at JCK Las Vegas. Source: Argyle Pink Diamonds

Retail margin pressure major challenge for diamond industry

The challenges and opportunities confronting suppliers and retailers in the diamond industry were hot topics at the recent JCK Las Vegas trade show.

The first day of the international jewellery fair featured two diamond-related sessions, including an address by De Beers Group CEO Philippe Mellier.

Mellier summarised the positive signs for industry expansion – as previously stated in the De Beers Diamond Insight Report – while also acknowledging the various challenges currently facing those involved in the diamond sector.

Philippe Mellier, De Beers Group CEO
Philippe Mellier, De Beers Group CEO

He noted the difficulty for diamond mining companies to meet growing demand due to declining global production rates, the increasing need for diamantaires to be financially transparent in the wake of the global financial crisis, and the increasing impact of technology on the diamond trade as a whole.

Mellier stressed that maintaining consumer confidence was “vitally” important to industry success, as “the end consumer’s desire for diamonds is the only true source of value in the diamond industry”. He commented that the issue was of particular significance now given the onslaught of reported undisclosed synthetic gemstones.

Mellier also discussed the pressure on bricks-and-mortar retailers to reduce margins, pointing out that consumers’ increasing use of the internet for pre-purchase research was allowing them to “play retailers off against one another”.

“I urge you to continue to bear in mind the importance of focusing on marketing, branding and retail standards; to keep alive to the preferences of consumers old and new; and to make sure you prepare your business to thrive in a growth environment,” he concluded.

In addition, it has been reported that the “A diamond is forever” slogan would make a comeback in the De Beers Forevermark global marketing campaign, which is expected to launch in North America later this year.

The iconic catchphrase – introduced in 1947 – will be used to target young consumers, with the campaign including television advertisements, digital communications and in-store material.

Rising demand for colour
Maulin Shah, World Shiner director
Maulin Shah, World Shiner director

The JCK Las Vegas event was also host to a discussion panel organised by New York-based Natural Color Diamond Association (NCDIA), which examined how retailers could use coloured diamonds to maximise their business.

According to the NCDIA, natural coloured diamonds were the “highest growth segment of the jewellery industry” and could potentially attract “unprecedented profits” for retailers.

In line with these sentiments, feedback from Australian diamond suppliers indicated that demand for coloured stones was rising within the local market.

World Shiner director Maulin Shah said, “While demand for coloured diamonds will always fluctuate according to fashion and current trends, we have noticed a recent increase in their popularity.”

Meanwhile, Brett Bolton, director of coloured diamond and gemstone supplier Bolton Gems, estimated that demand was at least six times greater today than it was four years ago.

Brett Bolton, Bolton Gems director
Brett Bolton, Bolton Gems director

Bolton explained that because the price of coloured diamonds was largely dependent on colour – which varied quite significantly between each stone – they could not be “price shopped” in the same way as colourless diamonds.

“[With coloured diamonds] you’re not buying the grade or the cert [certification]. You’re buying that particular stone, you’re buying that story, the stone you’ve fallen in love with – and that’s the big difference,” he said.

Bolton noted that consumers were also increasingly seeking diamonds that were “special” and “different” from the traditional white stone.

“Retailers can make a reasonable margin from coloured diamonds and demand will continue to grow,” he added. “The market is nowhere near a saturation point.”

The 2015 JCK Las Vegas jewellery show was held from Friday 29 May to Monday 1 June.

More reading
Global diamond jewellery demand sets new record
Latest De Beers investment to benefit diamantaires
 











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Friday, 23 August, 2019 05:47pm
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