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Diamond marketing - fantasy and self-delusion

On this day before Christmas 2015, I am cogitating over the seeming mountains of flyers that have arrived in the mail, the paper kind, in the last few weeks.  I do not recall it ever having been that intense, and I can only attribute it to a soft season that pushed so many retailers to offer big discounts so early in December, even in November.  I recall that years ago, no discounts showed up until January.  Long gone, those days. In all of it, jewelry was almost entirely missing.  Yes, I received flyers from Macy's that included jewelry, but they do that all year round.  Signet had plenty of ads on TV for Jared and Kay Jewelers.  And there were a few promos via e-mail.  After that, zip, at least as I can recall.  Worse yet, as I have noted before, the big fashion magazine issues were nearly devoid of jewelry.  The apparel ads were great, but almost none showed a model wearing jewelry. Oh yes, and Forevermark showed up in some magazines and newspapers with full page ads.  But

Top 10 Issues for 2015 - #5. The New Consumer

Well, the summer break is over, and we are facing a Fall season that does not seem to have much momentum.  Last time, I wrote about retailers' issues, though there is much more one can say on that subject. Now, let's think about the consumers.  Where are they?  Who are they? And will they show up this season? There is plenty of evidence that the public we have grown so accustomed to in the Consumer Age has evolved, or is evolving, into a very different public, one that has reset some values and taken a hard look what it takes to earn a dollar, and just how to spend that dollar. Maybe the best way to begin to describe this transforming mindset of the public is to make a list of what we see. Keeping up with the Jones's is dead.  Acquisition for its own sake, and to show off what we own is no more, though personal satisfaction is still there.  So that means that what you own means less than what you've done and where you've been.  (I exclude the super-rich, who

The Diamond Crisis

I was prepared to write my next big issue for 2015, number 5, but this week's news in the diamond business has diverted my attention.  Conditions have reached the boiling point, and the future is foggier than ever. Without repeating all the details that I assume most concerned people have already learned, let's look at the upshot.  (A well done update is this week's column by Edahn Golan, issued just before the latest twist.  Look at his column at http://edahngolan.com/how-sightholders-take-care-of-business-a-market-report/)  In essence, the pipeline is stuffed with diamonds.  Some sightholders have been borrowing to buy goods, but using cash flow from under-priced sales to fund investments in other, more profitable ventures.  But many of those ventures have turned sour, and there have been some bankruptcies.  Apparently, there are many dealers under great pressure, and the market is seizing up as there is fear about selling anyone.  While I do not know the details, ther

Top 10 issues for 2015 - #4: American jewelry retailing. What's the problem?

Everywhere we turn these days, we read about the weakness in jewelry retailing in the US.  The numbers are down vs last year, every month for the last six months, and there does not seem to be any reason to think the summer will be any better. We can, of course, see all this as the "canary in the mine."  Jewelry has frequently been described as the first to get hurt in a downturn, and the last to recover, being that such purchases are discretionary and remain low on a list of priorities, excepting in most cases for the purchase of an engagement ring. All that does not seem to ring true at this point.  Back in 2007, I began to hear many retailer say that there was something wrong.  After a few great years (2006 being the best) they saw business drop off sharply in mid-year.  I took that as a real warning, an early warning, and echoing the declines we saw with the recessions in the 1980's and again in 2001. This time, though, the country has been out of the steep dec

The Top 10 issues for 2015 - #3: The Third of Three Tipping Points of Man-made Diamonds

The last two posts covered scenarios that I think are totally possible, even probable, as we move further into a time of declining production of diamonds and increasing production of MMDs - man-made diamonds. Until relatively recently, MMDs were too often the means for people to realize extra profits by deceiving buyers.  Even experts cannot detect MMDs without special equipment, and for years no such equipment was available.  Yes, labs could detect MMDs, but it is very safe to assume that only a tiny percent ever got that far - most MMDs are smaller stones.  In addition, productions were so small, that finding them was more by accident then by a directed search. I recall being told years ago that a New York based lab found MMDs because a major auction house checked all diamonds being auctioned, mounted or loose, as a matter of course.  I have never heard of any other company doing that. Of course, diamond "imitations" have been around a long time.  There was always gl

The Top 10 issues for 2015 - #2: The Second of Three Tipping Points of Man-made Diamonds

Last week I posted a blog covering the first of the three tipping points for man-made diamonds (MMD's), moments when MMD's will have dramatic effects on the diamond business.  (If you have not read it, I suggest doing so before going on with this blog.) No sooner had I posted tipping point 1 , when news came out that a very high quality 10-carat diamond was produced by New Diamond Technology, a Russian company claiming that they possess a new process that is far more efficient.  They claim it took them 300 hours to create this stone, which was cut from a much larger piece of rough, over 30 carats.  Let's see, 300 hours is 12.5 days for a 10-carat diamond.  Whether is was a promotional effort of regular production, most miners would love to have a finished 10-carat high quality stone every ten days. Then I read that both Helzberg's and Sam's Club, each of whom address somewhat different market segments, are both offering larger diamonds in pink, yellow and whit

The Top 10 issues for 2015 - #1: The Three Tipping Points of Man-made Diamonds

First off, my apologies to readers of this blog, for not having written for a while.  No, I have not disappeared, just had a busy time for a few months.  But here we are running into the Summer trade shows, so it's time to offer some perspectives! In thinking over the cross-currents pummeling our business these days, I realize that we are but one cork bobbing around in heavy seas.  True, we have issues that are peculiar to the business, but economic, technological and political upheavals occurring world-wide are also making it very difficult to get clarity on where we might be heading. Still, some developments warrant a close look, even if the effects will not be fully felt for a few years.  One that I have written about before is the rise of man-made diamonds (MMD's) in the trade.  In my view, there will be three moments in time when MMD's will reach tipping points, moments when their presence in the marketplace will force us to adapt.  I'll cover tipping point #1