GemThoughts

My wishes to everyone for a healthy and successful 2012.  This holiday season has been most enjoyable around here, highlighted with the Giants making the playoffs!  Let's see how far they go. And let's see how far we go!  The jewelry industry will continue to see profound changes from mining to retailing.  In parts 1 and 2 of this overview, I offered some thoughts on sourcing and retailing.  We know that the exiting of the Oppenheimer family from De Beers signals big changes to come in distribution; we already see that material costs, advancing consolidation and the boom in online sales have deeply affected all retail channels.  But how might manufacturing fare in all this? We have noted that an explosive population growth, and particularly the expansion of the middle class and affluent classes all over the world, must mean that opportunities to sell luxury products of all sorts are growing.  Judging by early reports from luxury retailers, hig...

We left off, on the last post, posing a question.  Just what will retailers need to consider in the coming decade, especially when it comes to the diamond business? We can make some reasonably good assumptions, and speculate from there.  (I am thinking mostly of the US market, but most of these points apply in many established markets). The number of brick and mortar retailers will slowly decline.  Persistently high costs of materials (metal and stones) will cause local markets to consolidate further, spurred by low unit sales.  That will mean that efficient, well-capitalized and marketing-oriented operations will accrete volume, become dominant and drive even more operations out of business.  We already see that effect now, with some retailers having very good business in these economically difficult times, while others are doing poorly. Diamonds will remain the bedrock of the business (even though specialized retailers dealing in fashion goods made with ...

Sometime in the last month or so the seven billionth living person joined us, or so say the demographers.  We also learn that the world population grew by a billion in just 12 years, and probably another billion in the next 12 years or less.  As a reference, about 50 years ago there were three billion people on the planet.  We know the world's resources are strained now to meet the need of 7 billion people, never mind the 10 billion or so expected before the end of the century. Let us accept for the moment that the world will adapt - somehow.  A little optimism is a good thing.  But according to futurists and prognosticators, that adaptation will come at the expense of many of our treasured standards of living.  While we in the US and elsewhere in the developed world might be struggling to maintain those standards, many hundreds of millions elsewhere in the world aspire to become "Americans", to enjoy the benefits of leisure time and modern conveniences. ...

We read today that Stephen Lussier's, of De Beers, stated that there will be no changes in De Beers operations.  It would have been destructive to have said otherwise.  Such comments are a necessary part of keeping the boat from rocking.  There is nothing else he could really say.  As the closing on this sale will take time, it is of paramount importance to have "business as usual."  By the time Anglo fully takes over, Lussier's comments will have faded away. I thinking about this kind of distance between actions, I cannot help thinking there has been some pre-planning in the Oppenheimer sale.  There had been some rumblings about a sale at least a year ago.  But there were a few open issues that had to be dealt with first. First, Nicholas Oppenheimer had to quit the Anglo board, a necessary move as his presence at this juncture would once again tie him to whatever moves Anglo wants to makes.  Second, there had to be a new contract with Bot...

The news today that the Oppenheimer family has sold out its remaining share of De Beers to Anglo-American, subject to regulatory approvals, brings to a close a remarkable era, and the extraordinary tale of the Oppenheimer family.  In many ways, the diamond industry owes its success and perhaps its very existence to this family.  Observers have been commenting for over a decade on De Beers' struggles to transform itself from a near monopoly into a modern commercial operation.  At every turn, it fought to maintain control of its distribution and historical methods, and step by step it has been forced to retreat.  At the core, the issue was whether it could create an effective marketing plan that would create added profits--and justify the existence of a complex marketing and sales organization, the DTC.  European regulators forced it to sever its long-time control of Russian diamond production, and to create a cumbersome and onerous system for continuing its sig...

Just this week we read about Blue Nile selling a $300,000 diamond, and over a smartphone.  We wondered about its size and qualifications - just curiosity - but the sale itself came as no surprise.  Blue Nile has been working the loose diamond business now for years, and has amply proved that these nearly commoditized objects are well suited to Internet selling.  After all, can anyone name a company that sells diamonds that went from zero sales to $300 million plus in a handful of years. Still, there are retailers who think the whole thing is a sham and a lie.  I read the comments that appeared on JCK's web site, and was shaking my head over those that came from "deniers."  Oh, they said, this was a marketing stunt, there was no such sale, and certainly not on a smartphone.  How could anyone buy a stone that expensive without looking at it.  One retailer suggested that the buyer got a retailer to bring the stone in, learn all about it, and then bough...

I finally got a look at Forevermark's web site , and everything took forever.  I viewed it on an I-Mac with plenty of speed and memory.  I mention that up front, because this site uses lots of Flash, and it crawls.  Crawls so badly that my browser timed out waiting to load a page.  When it did load, we see a slick, spare site.  The photos are over-Photoshopped, with metal a shade of gray, and diamonds always blue.  Navigation is clumsy.  When looking at collections, for example, I had to click back five or six pages just to get to the point where I can look at another collection.  There is an app available too (click here) , where one can see oneself wearing a piece.  It is a cute gimmick, but not worth the trouble and waiting.  I looked odd wearing a necklace. No prices are shown anywhere, so it is left to the visitor to go to the retailer locator to find a store.  For the moment, the retailer outlets listed are very few....