On January 10, 2007 we were treated to a rare opportunity to hear from one of the industry’s leading authorities. Bill Boyajian spoke insightfully about very current and important issues including the shifting balance of power in the industry, the downstream rush, synthetic diamonds, conflict diamonds, public perception of our trade and products, stress on margins and profitability and finally, adding value to products and services.
The first topic on the shifting balance of power dealt with DeBeers’ “Supplier of Choice” program and how the reduction of “Sightholders” from 200 to fewer than 80 has changed the way previous Sightholders now do business. They have either gone out of business or aligned themselves with current Sightholders. The African producers are also trying to become cutting centers in order to keep as much business as they can locally. Longtime cutting centers such as Antwerp are struggling to keep their business from shifting to China and India.
Members listened carefully as Bill expressed his concerns about the gem industry.
The downstream rush topic was about dealers becoming manufacturers and manufacturers becoming retailers. DeBeers is encouraging its Sightholders to get closer to the consumer thereby streamlining the pipeline. The middle dealers are being squeezed and they must diversify to survive. We now have not only DeBeers opening retail locations but Leviev is going head to head with them. Leviev has mines, cutting facilities, jewelry factories and now, a retail location in London.
Speaker Bill Boyajian reads out the winning raffle ticket number.
Synthetic diamonds are a challenge to all of us to properly identify. Disclosure should not be an issue from the labs that create them to the consumer who buys them. There is nothing inherently wrong with synthesized gems of any kind as long as everyone knows what they’re dealing with. Bill’s opinion is that by disclosing the origin, the synthesized diamonds will create their own market and the interest in natural coloured diamonds will increase. The labs will issue reports on synthesized diamonds. On a personal note, Bill prefers the term “lab-grown” to “synthetic” and that “cultured” should be reserved for organic products.
Chapter VP Tony Conway presents our gift Smithsonian book
to Bill Boyajian at the end of the meeting.
The topic of conflict diamonds is on everyone’s mind with the release of the “Blood Diamond” movie. The industry must address the fact that the film deals with a situation that occurred in the past and we have addressed the rectification ourselves with the Kimberly Process. The bigger question is how does the public feel about it and what is the long-term affect of returning to this issue. Social issues are much larger concerns of the younger buyers and their concerns must be addressed like never before which led to the next topic of public perception.
Chapter members meet with Bill over dinner after his talk.
In handling public perception of our industry, we must be more transparent than in the past. The younger buying public is much more socially aware due to environmental and ethics issues. A “Council for Responsible Jewelry Practices” has been formed to address these concerns which are not likely to abate for some time.
The next topic was about the stress on margins and profitability. The speed of change as a result of Internet buying has increased the stress on the entire industry. Consumers now have as much access to stones and pricing as the retailers, which has significantly cut into profit margins in almost every level of the pipeline. As a result, adding value to products and services has become paramount, which leads us to the final topic.
Adding value is paramount for everyone, but particularly for retailers if they want to compete on what is becoming a global marketplace. Price isn’t everything but it can be a major factor in where people do business. The key is in the relationship. Invest in the relationship with the consumer and the business has a better chance of surviving. Family-owned businesses still drive the industry. Retailers must decide whether to brand their store, use name brands as their brands or a combination of both. This will help in getting the consumer to recognize and appreciate the value of doing business with traditional brick and mortar stores.
Archive Text by Sherlene Bradbury
Archive photographs by Doris Voigt