De Beers Group CEO Philippe Mellier
American consumers’ growing preference for branded products is helping retailers achieve Forevermark diamond sale prices 10 to 15 per cent above equivalent prices for generic diamond jewellery, according to De Beers. Addressing a cocktail event for Forevermark jewellers in New York, De Beers Group CEO Philippe Mellier said it was undeniable that the consumer landscape in the US was changing.
“There has been a clear increase in consumer preference for brands and people are also changing how they engage in the retail process,” he said.
“We have seen a rise in the US from just seven per cent of consumers claiming they acquired a branded engagement ring in 2002, to around five times that level in 2013.
“The generation Y and millennial consumers who will provide the oxygen of future US diamond jewellery demand are looking for uniqueness and ethical reassurance in the products they buy.
“There are numerous possible questions for potential new diamond purchasers – ethical, corporate and social issues; undisclosed treatments and synthetics; soft grading misrepresenting value; and poor returns from traded-in diamonds undermining the sense of lasting value.
“It is vital that we develop programs that both excite and build trust in diamonds if we are to engage the consumers of the future… In short, we need to ensure that diamonds remain relevant to this demographic and we require the right vehicles to promote the choice of diamond jewellery ahead of luxury holidays or electronic gadgets.
“I am pleased to say that, to date, we are seeing Forevermark Jewellers consistently achieving 10 to 15 per cent premiums above equivalent generic diamond jewellery.
“This is clearly very important when considering the requirement to fund the marketing, inventory, and retail environments necessary to compete effectively against other luxury goods categories.”
Mellier said that diamonds continue to be by far the most coveted gemstones in the US jewellery market but the industry needs “to maintain a sharp focus” on its long term prospects.
“We must constantly work on understanding, preparing for, and even influencing the future,” he said. “And we need to work together to find mutually beneficial ways to keep the diamond dream strong.”
He stressed however that this is not always easy in an industry that is characterised by unique challenges and opportunities.
“The product we sell is scarce and becoming scarcer. We operate in a fairly long and complex supply chain. We are experiencing shifts in consumer trends and increased competition from other luxury categories.
“And yet in spite of all of this, we have the potential to make the next few years among the most successful ever for diamonds.
At the global level, he said that “even in the most pessimistic scenario, we can expect real positive demand growth for diamonds thanks to the traditional engine of US demand, coupled with growing demand from the East as more Indian and Chinese middle class consumers choose to purchase diamonds”.