Not before September. And if the mining companies keep pushing rough onto the market, it may take a lot longer. The only way to stabilization is to have new rough come to the market through an eye dropper, or not at all, allowing cutters to unload existing stock without the pressure of buying lots of new goods. And it can’t be accomplished by DeBeers alone. This must be a coordinated strategy encompassing all major and minor diamond miners.
It’s ironic and baffling that while the stock market keeps making new highs every day, our diamonds and the Rap list keep going down. And (please don’t shoot me for this), I think Rapaport is acting rationally in his pricing report.
But there are islands of stability and safety
Not all stones are falling. There are areas and specific stones that have even gone up. But they are not generic stones. As I’ve said since I started this blog, generic stones are the most vulnerable areas of the diamond market. They are the first to suffer from overstocking, price drops, Rap list drops, and competition from Synthetics. Why? Because they have no story!
Stones with a great story continue to do well.
Example: Try to find a Forevermark 3X 2 ct J SI1. You’ll pay more than you did a year ago. These stones have a great story, and they sell faster than they can be replaced. And if it’s Black Label – there’s a long waiting list. Because the story gets even better; responsibly sourced, bought directly from the cutter that bought it from the mine, and cut like no other round on the market.
There are many other examples like this. The common denominator of all these “price drop resistant” stones, is that they are not common. They have a great story about its sourcing, its cutting, or both.
Which leads me to another recent phenomenon in today’s diamond market – Experiencing the Journey.
Experiencing the Journey
One of the hottest new products in the diamond world is the Journey of the Diamond. You’ve all heard of the paradigm shift that is occurring across the globe.
Experiences vs. Possessions.
While previous generations generally tried to accumulate possessions to pass onto the next generation, today, people, young and old, are spending more of their disposable income on Life Experiences. This may be good for the travel industry, but is bad for diamonds and watches.
The best answer to date is to make buying the possession into a great experience. Retailers know this very well and have made their stores into pleasant buying experiences. But the product needs more than just the upgraded retail environment. The product must add the experience as well. And that is why Forevermark is gaining traction. The buyer gets the sourcing experience. And once you add the Exceptionals program, you have that Experience on steroids.
There are a number of other Journey Experiences now hitting the market, like the GIA’s Origin report, or Sarine’s Diamond Journey, to mention just two of many.
I’ve joined the Exceptional program. It’s a tough and time consuming approach to diamond cutting. Sharing the entire journey from rough to polished with the consumer. But boy does it sell! Consumers love it, and so do retailers. Because it has a great story. And it is not subject to weekly price drops.
I really think that the diamond market will soon have two distinct marketplaces. Generics – This will suffer from all the vicissitudes of the market with strong headwinds to price stabilization;
And the Experience market. Where retailers can make a decent margin and the consumer can satisfy his desire to experience the diamond story, as well as possessing of nature’s greatest gifts.
