The Facets 2024 conference in Antwerp brought together leading voices from the diamond industry for a provocative panel discussion titled “Unlocking the Value of Natural Diamonds.” Moderated by analyst Edahn Golan, the session delved into how the trade can revive consumer interest and whether commodity investors might offer a lifeline to natural diamonds.
Diamonds: A Flawed Retail Experience?
David Kellie, CEO of the Natural Diamond Council (NDC), painted a stark picture of the current retail environment. Mystery shoppers sent to jewelry stores exposed troubling gaps, including misinformation about diamond origins. One U.S. retailer claimed a diamond came from “Texas,” reflecting a lack of knowledge and storytelling that undermines the product’s emotional value.
“Buying a diamond should be a magical experience,” Kellie stated. Instead, he criticized retail environments, particularly in the U.S., as lackluster: “At the $3,000 to $5,000 price point, there’s no other product where the experience is this bad.”
The Importance of Storytelling and Education
Panelists emphasized that financial value alone won’t sustain the diamond industry. William Lamb, CEO of Lucara Diamond Corp., urged marketers to focus on provenance and the positive social impact of diamonds, stating, “We start with ‘how much money can we make,’ but without the story, we lose the consumer.”
Beyond Sparkle: What Consumers Want
Olya Linde, a partner at Bain & Company, outlined eight key elements that luxury consumers value:
- Craftsmanship quality.
- Status.
- Investment potential.
- Design and aesthetics.
- Entertainment in the buying process.
- Self-expression.
- Heritage.
- Sustainability.
Success, Linde argued, lies in addressing as many of these factors as possible.
Fancy-Color Diamonds: An Investment Haven
For those seeking value retention, fancy-color diamonds stood out as a resilient investment option. Sahag Arslanian, director of the Arslanian Group, noted their immunity to synthetic alternatives, much like rare gemstones. “Fancy-color diamonds are the crème de la crème of investment, but not for average consumers,” he remarked.
Can Investment Demand Save the Industry?
Cormac Kinney, CEO of Diamond Standard, advocated for creating exchange-traded diamond commodities, likening them to gold ETFs. Kinney argued that investment demand could stabilize the market by emphasizing diamonds’ rarity and economic value, noting, “Marketing to consumers might not work as well as tapping into investment capital.”
However, this approach faced resistance. Kellie and Golan pushed back, arguing that diamonds require a robust marketing strategy akin to luxury brands like LVMH and Kering. “No other desirable brand neglects marketing,” Kellie said. “You only see marketing’s value when you take it away.”
What’s Next for the Diamond Trade?
While opinions diverged on the best path forward, the panel agreed on one thing: change is essential. Whether through better retail experiences, investment strategies, or compelling storytelling, the diamond industry must adapt to regain its sparkle in the eyes of both consumers and investors.