Learning the (Diamond) Ropes

“Where’s your diamond?” De Beers president and CEO Jim Gowans challenged me, looking pointedly at my left hand as I interviewed him in September. Previous to this job he had built many successful mines in the North, but knew nothing about diamonds. He’s been doing his homework ever since. “All of a sudden I’ve taken this big interest in diamonds, so I’m going through all the jewelry stores in Singapore on the way home from Indonesia, and in the front window of a store, I was gob-smacked.” [I’m not making this up.] “The sign said, ‘We sell De Beers diamonds’.”

I retorted: “Where’s yours?” He answered obliquely: “My wife doesn’t wear her engagement ring anymore. ‘It’s a bit small,’ she says.” He explains that it had cost his whole two-week paycheque some decades ago when he was a research technician. Linda Dorrington, De Beers Canada’s manager of public and corporate affairs, interjected: “It’s supposed to be two months,” referring to the amount of his salary De Beers expects a man to spend on a diamond ring for his fiance.

Gowans defends his position as a “Scots mining engineer”, but admits that his wife has already picked out her Christmas present from the De Beers retail store in London. Lucky for our man that every company employee qualifies for a director’s discount at all 22 of the De Beers L.V. stores.

Obviously the marketing team has gotten to Mrs. Gowans if not to her husband.

For years the company has run very successful generic marketing campaigns that never mentioned the company name; they didn’t need to when De Beers dominated the market. But that has changed. De Beers now supplies less than half of the world’s rough diamonds, and has tired of funding advertising that benefits its competitors. Now the company is working with its 92 sight-holders–the select companies that buy its rough stones for cutting and polishing–to develop their own brands and ad campaigns.

A pilot program has run successfully in Hong Kong since 2004 to trademark and sell De Beers’ own diamonds that meet certain standards, which are laser-engraved with the “Forevermark” logo and a serial number. This is what Gowans saw advertised in the Singapore store. The program is now being introduced into other markets.

Unlike other Canadian diamond producers, De Beers does not support the idea of selling diamonds mined in Canada as ‘Canadian diamonds’, because its research shows that this has value only in the small Canadian market and sometimes in the U.S., whereas a ‘De Beers diamond’ has an attraction around the globe.

The company is much more interested in growth markets such as China, India and Korea where successful marketing has developed a large new audience interested in owning diamond engagement rings, and booming economies to supply the cash.