It was one of the more unforgettable memories of the 2016 Summer Olympic Games, and it had little to do with athletics. Immediately following the medals ceremony for the women’s 3-meter diving competition, Qin Xai, a member of China’s men’s diving squad, approached the silver medal winner, He Zi. Dropping to one knee, Qin popped open a box with a diamond ring inside, and before the astonished crowd and an audience of hundreds of millions, proposed marriage.
It was a dramatic and emotional moment, but, even if one puts those elements aside, the incident, which was communicated to the world through a series of still images, was in a number of respects remarkable. Because the young man gave a diamond ring to the young woman, all those witnessing the event knew automatically what was happening. Had there not been a ring and the couple simply had embraced, no one would have assumed that anything out of the ordinary was taking place. More than likely, most would have thought that he was congratulating her on her medal.
Also extraordinary is the fact that both the young man and the young women were from a country where not much more than two decades ago this entire scene would have implausible. There was no historic tradition of buying a diamond engagement ring in China, an indeed in the early 1990s the percentage of Chinese brides receiving such jewelry was practically zero. Today, according to a Citigroup report, the figure is more than 30 percent, meaning that, in our wired and globalized world, the fact that the Olympic divers were Chinese was purely incidental.
A tradition born out of a marketing campaign
Although it is said that its was Archduke Maximillian of Austria who commissioned the first diamond engagement ring for his fiancée, Mary of Burgundy, in 1477, it is fair to state that the act of proposing marriage by popping open a ring box is not rooted in some ancient religious ceremony, but rather in the offices of a Philadelphia advertising agency 69 years ago. It was there, in 1947, that the association between diamond rings and love and matrimony was forged with the launch of De Beers’ A Diamond is Forever advertising campaign.
The existence of a well-financed and carefully planned marketing strategy was critical in the transformation of the diamond from a product owned mainly by the very wealthy, into a one sought after the by the general public.
But the model for generic diamond advertising was essentially American.
At the end of the 1930s only about 10 percent of American brides owned an engagement ring, with the De Beers’ A Diamond is Forever campaign in full force, by the start of the 1950s the number of brides in the United States who received diamond engagement rings had increased to 60 percent, and by the 1990s the figure had surpassed 80 percent.
Then De Beers launched its Diamond is Forever ad campaign in Europe (1963) and in Japan (1968). China was traditionally a gold and jadeite market. That began to change in 1993, when De Beers tuned its attention to the country. By 2015, eight out of ten Chinese women in tier-one cities were receiving a diamond engagement ring or wedding ring when they got married, and in tier-two cities the figure was about 70 percent. Nation-wide the acquisition rate was above 31 percent.
Technology levels the playing field
Massive disparities between countries and cultures, influenced by the course of history, economic conditions and different political frameworks, not to mention language and traditions, traditionally made it extremely difficult to design and implement uniform international marketing campaign for diamonds. For although the general model for integrating diamonds into the consumers’ collective consciousness was similar, led by bridal jewelry, countries were located at different places along the continuum.
As so often is the case, what changed everything was technology, and more specifically the Internet and the smartphone. Not only did they link people to massive quantities of information and people, but together they also provided widespread and immediate communications access without the need of fixed infrastructure. What this meant is that people in less developed economies, who may have had to wait months or years for a telephone line, not to mention high-speed fiber-optic cable, now had the same level of connectivity as people living in the most developed economies.
The level playing field facilitated international marketing, like never before, opening possibilities that never before existed.
Uche Pézard, the CEO of Luxe Corp, a luxury strategy and management consulting company headquartered in Paris, noted recently that it used to take 30 years to build an international brand, but new media and technologies now make it possible to do that in 18 months.
And as we have seen just recently, on occasion it takes considerably less time. Pokémon Go, the downloadable game by Nintendo that use it players’ cell phones’ GPS’ capability to locate, capture, battle and train virtual creatures was released just this year on July 6. It went from zero users to 100 million users in just 25 days, in countries all over the world.
The birth of the first worldwide consumer generation
It is fair to state the Millennials really are the first truly global consumer generation, meaning that more than ever before we can consider it an entity not only in terms of age, but also in terms of characteristics, values and the way in purchasing decision are made.
Ranging in age from 20 to 39, Millennials today make up the second largest consumer generation after the Baby Boomers, its members are also certainly the most heterogeneous in terms background and ethnicity. With spending already estimated to be worth in excess $2.5 trillion, they are already make up almost all consumers of bridal jewelry.
What is a particularly significant is that the Millennials grew up in a society that was already digital, where online and mobile skills were not learned but simply acquired. This changed the way they perceive the world, and how they communicate among themselves and with others.
There is no generation more closely associated with social networks, and unsurprisingly the founder of the most important among them, including Facebook, Twitter, Instagram, Pinterest and Snapchat are all under the age of 39, and therefore Millennials.
It is a generation that already has changed the way our world operates, and it will continue to do so. As a business community, our success over the coming years will depend largely on our ability to communicate with it and to convince it to buy our products.
Generic marketing critical for diamond brand building
But success is not a foregone conclusion. A survey conducted by the Economist Group two years ago, indicated that jewelry is not the Millennial’s first objects of choice when it comes to luxury purchases. Those are more likely to be travel packages or electronic items
It is quite possible that the suspension of the generic diamond jewelry marketing by De Beers 10 years ago has something to do with that. When, in 2006, De Beers shifted from generic or category marketing to only promoting its own products, its annual marketing budget shrank from than $200 million per annum to what today is about $100 million.
And how important is generic marketing? In the past, much of its effort was aimed at ensuring that young people make their first diamond purchase, typically an engagement ring. Research indicated that diamond buying is addictive. The most effective predictor of a person buying a diamond is the person having bought one before.
This not to say that there is no money being spent on diamond marketing. Marketing by individual diamond companies is estimated to be in excess of $1 billion, with most it concentrated on getting customers into stores during the critical Christmas period. But there is virtually no building of the diamond brand, and the industry continues to rest on the foundations that were set by De Beers between 1947 and 2006.
Reintroducing generic marketing for Millennials
A turning point may come during the fourth quarter of 2016, when the Diamond Producer Association (DPA) launches the industry’s first concerted diamond-category campaign in more than a decade.
DPA’s members include, in alphabetical order, Alrosa, De Beers, Dominion Diamond Corporation, Gem Diamonds, Lucara Diamond Corporation, Petra Diamonds and Rio Tinto Diamonds, and together they represent the overwhelming majority of rough goods being produced in the world today.
Not able to use the old “A Diamond is Forever” slogan, which is copyrighted by De Beers and intended today for its exclusive use, the DPA’s new slogan, "Real is Rare," which followed by the subtext, “Real is a Diamond,” is meant to appeal specifically to Millennials.
DPA research shows that, while they lack the functionality of travel and electronics, natural diamonds have the gravitas and authenticity to celebrate and mark an authentic connection, which Millennials seek. And the good news is that, even where matrimony is concerned, Millennials are not a lost cause. They do fall in love, and as recent Goldman Sachs and Pew Research Centre studies showed, they also plan on getting married, albeit at a later age. The symbol of engagement remains relevant, as was so clearly demonstrated by the Chinese divers at the Olympic Games in Brazil.
What the diamond industry needs to ensure is that the connection between a man and women continue to best be symbolized by diamond jewelry, and not by an engagement iPad or an engagement trip to Tahiti.
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