Pumping up Diamond Sales

RAPAPORT… Retail transformation and media phasing are key components of the Diamond Promotion Service plan to move diamond sales forward this year.

Sales of diamond jewelry have grown 52 percent over the past eight years, states Claudia Rose, senior partner, industry strategy director, J. Walter Thompson (JWT) advertising agency for the Diamond Trading Company (DTC). “We want to have another year of growth,” says Rose, addressing a gathering of the trade and press to present the 2007 media campaign for the DTC.

This year’s “media phasing” strategy focuses on each core diamond category during different times of the year. “Each core program will have a dominant time of the year,” explains David Sisson, director of market intelligence, JWT. “This allows retailers to plan ahead to have the right merchandise at that time.”

While sales results were not fully available at the time of the briefing, preliminary results indicated a solid 2006, says Sisson, who puts diamond jewelry sales in the U.S. at $36.6 billion. “Bridal acquisition was strong and the average price per item increased. There were 40 million pieces of diamond jewelry sold in the U.S. in 2006. Pendants were strong, probably because of Journey.”

Changing the jewelry shopping experience is also high on the agenda. Electronics have become more competitive for discretionary dollars, especially plasma TVs, which have seen twice as many sales as 2005 due to a recent price drop, making them affordable to a wider audience. “Shopping is the number one passion in the U.S.,” says Rose. “Consumers love diamond jewelry, but not the shopping experience. Instead of shopping for jewelry, women would rather shop for clothes, furniture or in a department store.”

Some of the reasons that turn consumers off to jewelry shopping, JWT research found, are that jewelry stores are too old-fashioned, intimidating or blah. Consumers don’t like the way the staff “looks you over.” Stores look too much alike and merchandise is too similar from store to store.

“However, retail in general is getting more exciting,” notes Rose. “There is lots of recreational shopping, but not in jewelry stores. Jewelry retailers disdain shopping. They need to be advised on how to make the experience better. We’re trying to get retailers to raise the bar.”

Rose suggests that manufacturers “train” their customers on “how to make consumers’ dreams come true through a story with the jewelry.”

JOURNEY

Launched in third quarter 2006, Journey had a strong start, reports Colby Shergalis, core program director, JWT. She attributes the success of Journey to strong industry support backed by an extensive advertising campaign. In 2007, Journey Diamond Jewelry will see continued support with a new print campaign, “lines,” which illustrates the Journey concept of love growing over time and features a variety of Journey jewelry designs. The ads launched in February issues of female-targeted magazines. There will also be product placements to add to the “cultural significance” of Journey.

The DPS provides materials for retailers to create their own marketing campaigns, including a Journey video to run in-store.

THREE-STONE

Past, Present and Future (PPF): Three-Stone Diamond Jewelry continues to be a strong seller. “There was a 17 percent increase in sales of Three-Stone Diamond Jewelry from first quarter through third quarter of 2006 over the same time in 2005, “ notes Katie Duffy, associate core program director, JWT. “PPF represents 10 percent of the sales of all women’s diamond jewelry.”

This year’s plan is to keep PPF at the forefront of consumers’ minds with a new “Back to Basics” campaign, which will emphasize the belief in the permanence of love. PPF will have its media moment during the summer, when the television ads will be refreshed and the Timeline print campaign will be modified to show updated Three-Stone Diamond Jewelry designs. The ads will target men and women and will belinked to anniversaries.

DIAMOND RIGHT HAND RING

The Right Hand Diamond Ring category accounted for $1 billion in women’s diamond jewelry sales and sales have gone up 32 percent since the 2003 launch, said Dagmara Szulce, core program director, JWT. “The Diamond Right Hand Ring introduced a new buying concept. There were more women buying, it opened up nongift occasions and multiple acquisitions,” comments Szulce.

This category, more than any other, relies upon strong design, says Szulce. “There will be a big push in spring and fall. We will do it two times a year, like fashion collections, with a focus on design.”

Spring will see the “Diamond Fever” campaign, which will launch in April with a new print campaign in women’s magazines. There will be eight mass retailers — Macy’s East and West, Helzberg, Sears, J.C. Penney, Finlay, Friedman’s and Kay Jewelers — launching an integrated marketing campaign to promote the Right Hand Ring collections. The “October is Right Hand Ring Month” program will be in place again this fall with new print ads breaking along with mass and high-end retailer partnerships to promote the rings.

All categories of diamond jewelry will be backed by extensive public relations campaigns throughout 2007, including an Editor Event showcasing diamond jewelry and holiday gift ideas for press and stylists. The movement to accessorize celebrities in diamonds at all the major awards shows continues and at holiday time there will be a push to do national and local television segments, a satellite media tour and an electronic press kit.

CONSUMER CONFIDENCE

As a last component to ensure that diamonds remain hot sellers in 2007, the DPS continues its mission to promote consumer confidence. Duff reports that the Diamondfacts.org site will continue and going forward will address the issue of alluvial mining. She reminded manufacturers to provide customers with assurances that the diamonds used in the jewelry are conflict-free by having warranty statements. Retailers can use the Consumer Confidence Pack to train staff to speak knowledgeably on sensitive issues.