De Beers Promotes Enduring Value
In what it’s calling an “unprecedented initiative in a time of unprecedented change,” De Beers announced it will double spending this holiday season to remind consumers that diamonds have enduring value in what it says is its “strongest holiday program ever.” During the holiday season, 97 million American consumers, half the adults in the country, will be reached six times each with the diamond message. And that message will be in a new language to suit the new era.
“We have an opportunity to tell a story that is different to mere luxury,” explains David Lamb, chief strategic officer of Forevermark, the De Beers marketing division. “There are lots of brands and products that can’t do anything but pull back. For some, the only strategy is to slash prices. But it is perfectly possible to reshape the diamond message to suit the times. Consumers want deeper relationships with fewer things.”
The focus on diamonds as the ultimate icon of enduring value is based on extensive consumer research during the global economic meltdown in October. Despite the downturn, diamond jewelry is still the preferred gift of 41 percent of men and 30 percent of women with household incomes over $100,000. That’s more than either large or small electronics.
“We must increase diamond jewelry’s share of the luxury pie because that pie is shrinking,” says Claudia Rose, director of brand strategy at JWT. “Consumers are somewhat unhinged, regarding non-essential purchases with skepticism. We must continue to attract the core midmarket to elite consumers that are the market’s engine of growth. And we must keep the dialog alive in an industry with a long purchase consideration.”
Value is key to consumers today: 84 percent of women and 75 percent of men said that value for money was now the most important in choosing a gift. But 87 percent prefer something that is a bit more expensive now that will still have value in a few years. Reminding consumers that diamond jewelry keeps its value resonates with the attitudes of consumers today.
It’s all part of a cultural shift toward “fewer, better things.” And women don’t mind combining gifts from several occasions to get a diamond. “Eighty percent of women say they would prefer one special gift, rather than several small ones,” says Emmy Kondo, Diamond Promotion Service Planning Director.
Diamond studs are expected to be the item of the season, with 17 percent of consumers selecting them as the jewelry item they would most prefer. Classic jewelry including a three stone ring, a diamond solitaire necklace, engagement ring, and journey s-curve pendant and drop earrings will be featured in the ads. Rather than focusing on one beacon product, the ads are focused on the whole diamond category.
“If you think about a pair of studs for $1,000 that you will wear four times a week, the cost of wearing them is equivalent to a cappuccino,” Lamb says. “Which is the better value?”
The spending surge follows years of decreasing spending in the United States market as growth slowed. “This demonstrates our seriousness in promoting the category to everyone’s benefit,” Lamb says. “The American market is 52 percent of the world’s diamond jewelry sales. There’s one locomotive of this industry and it is America: we need to get that right.”
The campaign will combine television, with a revamped version of the popular “Hands” commercial now set to an instrumental version of the song “Stand by Me,” print, and online. The perennial “Seize the Day” print and outdoor campaign will be mothballed in favor of a more restrained print campaign with longer copy that explains the value message. “Seize the Day is a piece of advertising that shouts at you. Instead of something assertive, we wanted to have a conversation. It more suits the mood of the country,” explains Richard Lennox, group account director for the De Beers account at JWT.
The ads are white, with a framing black vignette that suggests a spotlight. Headlines include: “Two Things Last Longer Than Time. Love is One of Them,” “Here Today, Here Tomorrow,” and “Fewer Better Things.” Copy includes phrases like “wiser choices” and “reflect on things that last.” They are quieter, more sincere, and more intellectual than the clever tone of Seize the Day, more of an Obama flavor to Seize the Day’s Bush. Placements will include 128 full page color ads in national and local newspapers, as well as magazines like The New Yorker, Newsweek, Business Week, Barrons, and Fortune. Online ads will appear on TheWallStreetJournal.com, BBC.com, and Sportsline.com.
Diamond Promotion Service will have promotional materials and a poster and pocket card with sales scripts available on www.dps.org.
The advertising will start early before Thanksgiving and then surge late. “We always save money for the last minute because the trend for a later season will probably continue this year and we want to make sure that diamonds are represented,” Lamb says.
Will the value message be overwhelmed by the discounting that is expected to be the overall message this holiday season? “If I were a jeweler, I would certainly be looking at the right price point for my inventory,” Lamb says. “But it’s our leadership role to tell the positive so consumers will respond to promotion in a different way. It’s now enduring value at the right price.”
Reading through the message of De Beers, it is easy to find many rational arguments, which are flawed, for three reasons. The first argument is that diamonds are of enduring value. But I really do not know what enduring value is once we all know that diamonds are not for investment. Another argument is that it is better to buy now because the supply of diamonds is limited as mines are depleting. It is interesting to see how far this particular argument will help convincing the retail customer who stands in front of a case overflowing with diamond jewellery. The last example is that among the affluent buyers, price is not the issue. I do not know who are those affluent people and what is their weight among diamond buyers. Our data shows that since the mid 1980’s the “sweet point” of diamond purchases did not change. In the US, with its socially multi-layered demography, most of the diamonds sold are in the range between $2000-4000 while in Japan this “sweet point” hovers around $2000. Price does matter! See my further thoughts at http://www.janusthinking.com
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