HOW TO CHANGE A CHALLENGE INTO AN OPPORTUNITY
How can the natural diamond industry further establish and differentiate itself in relation to competing products and reach potential new customers?
Which lessons can be learned from similar cases in other products and how can this knowledge be applied to the diamond industry and its B2B and B2C strategies?
How can the diamond industry adequately differentiate its product, diamonds, from laboratory grown diamonds in a B2C context
Example: changing the narrative in a world where science blurs the real and unreal (“Authenticity in the Age of the Fake”)
Which role can variables such as socio-economic and environmental impact of the diamond industry, pricing, product and value life-cycle, appeal in terms of customer experience, emotional values and characteristics such as rarity and uniqueness, competition within the luxury segment, consumer engagement and confidence… play in this matter)
Example: today’s consumers are more than ever conscious buyers. When buying a product, they make a conscious choice, considering a multitude of variables such as financial and emotional value, socio-economic and environmental impact and authenticity. Products that tie in with their desire to express themselves and who they are, are more likely to appeal to them.
Example: to a large extent, how diamonds are mined and what their impact is on society remains an untold story.
Which lessons can be learned from similar cases in other products (eg, rubies, pearls)
Example: revival of natural pearls, stepping stone theory (“The Real Value of Fakes”) indicating that people who buy “counterfeit” luxury goods, are more likely to buy the “real” version later.
TRADE OF TOMORROW
The dynamics of engaging with customers, both in a B2B and B2C context, have changed significantly over the past few years. Traditional roles and processes between the different elements in the diamond pipeline (miner, trader, manufacturer, retailer) have eroded and a new shift has emerged, where innovation, customer engagement and experience are taking the lead in selling a product or service.
Traders need to reinvent themselves and how they do business, innovation and thinking outside of the box will be key for future success, meaning the industry needs to facilitate these processes and allow crosspollination from outsiders.
Which new business ways of interacting, collaborating and co-creating can be set up for young generations, startups, scale-ups as well as established companies, in order to facilitate these dynamics? Which are new ways of engaging with colleagues, peers and (potential) customers, keeping in mind important factors such as differentiation, personalization, value and experience?
Example: “innovation happens at the boundaries”, community-based co-working spaces have a few basic principles, it is a collection of like-minded people with similar interests and values, emphasis on community, space available for coworking and events. A co-working space entails: Common infrastructure shared among coworkers, Independence of coworkers from one another and mutual benefits resulting from cooperation among coworkers.
Example: when the diamond industry formalized in Antwerp in the early 1900’s, diamond trading activity shifted from the café’s located around the Antwerp Central Station to newly established trade floors in Diamond Bourses. The Bourses would typically offer their members space where they could do business with one another, providing additional services, such as equipment, communications tools and arbitration in exchange for a membership fee. In a sense, the bourses acted as co-working spaces avant-la-lettre. Today, the majority of business is conducted in offices. The empty bourse trading floors could be repurposed and serve as innovative co-working spaces, especially for the young generations of diamantaires as well as others, with similar interests or complementing core activities, boosting innovation and crosspollination.
Considering the specific nature of the product (valid for rough and polished diamonds) and taking into consideration the efficiency (or lack thereof) of existing sales channels (f2f, long-term client agreements-sights, tenders/auctions, trade shows, online platforms, B2B matchmaking/networking, buying groups, …) which new sales channels / sales mechanisms could be implemented successfully in the trade of tomorrow, connecting and optimizing demand and supply efficiently, both in a B2B and B2C perspective.
Example: traditional sales channels such as mass trade fairs in Hong Kong, Vegas and Mumbai, where thousands of buyers (used to) gather to buy loose diamonds are less and less effective, while the cost of participating in these events has risen dramatically, sometimes ten-fold, and destocking trends on the retail side are fast rendering these traditional ‘sales events’ highly uneconomical. New and accessible technology that allows to visualize diamonds in detail, instant communication and superfast point-to-point delivery processes are allowing traders to rethink their own business models.
Example: As the boundaries between different segments in the pipeline erode, businesses are no longer limited to traditional trade models and can now engage with consumers directly.
Example: in recent years, the industry’s traditional rough sales model, where major miners would sell their rough to a select audience of long-term customers, who would then sell their goods (partly) on the secondary market has changed with the emergence of tender houses who set up tenders or auctions, accessible for a broad(er) target audience of buyers. In addition, these tender houses act as facilitators, offering (smaller) miners a full solution in terms of cleaning and sorting rough diamonds into market-ready parcels.
How can midstream traders and manufacturers create added value in the supply chain of tomorrow?
Example: as a response to the declining popularity of trade fairs and the need to optimize efficiency especially in terms of cost, the AWDC launched a more targeted B2B concept two years ago, where buying groups (retailers and jewelry manufacturers) from a specific country or region are screened and invited on a paid trip to join a lean and mean, three-day buying trip to Antwerp, called the Antwerp Diamond Experience. This program combines the key selling points of Antwerp, such as the rich heritage of the city, its critical mass, matchmaking between buyers and sellers based on profiling, education and knowledge and culture.
Example: in the polished market, competing with lower prices in competing centres can be challenging. In this case, creating added value is crucial. This year, AWDC launched a concept in the framework of its generic Diamonds and Antwerp, it’s in our DnA campaign. The pilot project, in Japan, entails that Japanese retailers can join a program which allows them to use the DnA marketing in their stores, capitalizing on Antwerp’s image and reputation as world diamond capital and centre of excellence. Polished diamonds that are sourced from Antwerp registered diamond companies are eligible to be accompanied by a DnA themed certificate, issued by CGL, a diamond grading lab that has a dominant market share in the Japanese retail market. CGL verifies if the diamonds are supplied from Antwerp, based on customs documents originating from the customs and clearing office in Antwerp called the Diamond Office. Once verified, the retailers who joined the program, can request a dedicated DnA certificate for those diamonds and use this feature in their marketing strategy. Demonstrating they are doing business with companies that operate in Antwerp is creating an added value for the Japanese retailers, who present their “Antwerp” diamonds (jewelry) as a premium product.