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THE DIAMOND JEWELRY MARKET

wedding diamond ring

BRIDAL JEWELRY REMAINS THE SAFEST HAVEN IN A SAFE-HAVEN MARKET

It was in September 1938 that a 29-year-old Harry Oppenheimer, the son of then-De Beers chairman Sir Ernest Oppenheimer, journeyed to the United States for meetings with the N. W. Ayer advertising agency. It was the first step in a process that was to change the diamond business forever.

Oppenheimer was traveling to America at a time when diamond jewelry sales seemed to be mired in a prolonged slump. In Europe, which was hurtling toward war, the diamond was still considered by many to be the exclusive property of the wealthy and the noble classes, and in America, the average price paid was $80 an item.

NW. Ayer suggested to Oppenheimer that a carefully designed advertising and public relations campaign could influence social attitudes in the U.S. market. More specifically, it urged the strengthening of the association of diamonds with romance. Since diamonds were a gift of love, N.W. Ayer felt, it stood to reason that the more valuable the diamond, the greater the expression of love.

The campaign devised by N.W. Ayer set the tone for De Beers’ consumer advertising for the next 60 years. As stated in the advertising agency’s 1951 policy review, “only the diamond is everywhere accepted and recognized as the symbol of betrothal.”

The slogan than came out of the campaign represented a moment of advertising brilliance. Penned in 1947 by Frances Gerety, a young copywriter working for N. W. Ayer, it declared  “A Diamond is Forever,”  and expressed in four words the understanding that  love, like nature’s hardest mineral, is eternal. In 2000, Advertising Age magazine declared “A Diamond Is Forever” as the best advertising slogan of the 20th Century.

Harry Oppenheimer (left), who at age 29 in 1938, became the architect of De Beers’ “A Diamond is Forever,” campaign, the landmark program that cemented bridal jewelry in western culture. To his right is Frances Gherety, the NW Ayer copywriter who penned the low legendary tagline.

De Beers’ iconic slogan, which forever associated the giving giving of diamond jewelry and the process of matrimony in western culture.

THE DIAMOND MARKET’S FOUNDATION STONE

The association of the diamond with love and marriage was a master-stroke on a number of levels. Bridal jewelry and other gifts of love rarely enter the resale market, meaning that most diamonds are sold only once. Also, since love and marriage never really go out of fashion, diamond jewelry has remained a constant, decade after decade. Furthermore, since people hitch up all through the year, the bridal jewelry business is not seasonal.

But what De Beers also managed to do was create a market sector that has a built-in safety-net, which is unlikely to budge or fluctuate significantly. People get married whether the economy is good or bad, and while the prevailing economic climate will influence the types of diamond that are purchased, it is unlikely to affect whether diamonds are bought or not. Bridal jewelry is the safest haven in a safe haven market.

The world’s largest diamond market, the United States, is anchored by the bridal sector. Up to 85 percent of diamond jewelry sales are wedding related, including diamond engagement rings, wedding bands and wedding-day jewelry for brides and bridesmaids. Weddings also are the trigger for later life-cycle purchases, such as engagement jewelry.

THE INTERNATIONALIZATION OF BRIDAL JEWELRY

The concept of bridal jewelry was essentially a Western one, but in the 1960s De Beers realized that the largest regions for potential growth were outside of North America and Europe. Japan was targeted as a market of tremendous potential.

Until the mid-1960s, there was no real tradition in Japan of buying diamond jewelry to celebrate a marriage, but the ad agency that De Beers employed to run its campaign in the country, J. Walter Thompson, detected a strong appetite for objects reflecting modern Western values. It thus created a series of advertisements featuring women with Western features, displaying their diamond rings.

When the campaign kicked off 1967, fewer than 5 percent of Japanese women received a diamond engagement ring. By 1972, figure had climbed to 27 percent. Six years later half of all Japanese women who were married wore a diamond, and by 1981 the proportion stood at 60 percent.  Japan became the second largest diamond engagement ring market, after the United States.

NEW FRONTIERS FOR BRIDAL JEWELRY

China was another country with no real history of diamond being used to celebrate a marriage.  De Beers had been active in the country since 1993, and from the very beginning has considered the bridal market sector as promising. But there was a practice of giving a wedding ring at the marriage ceremony, and for that reason De Beers targeted the development of diamond wedding rings.

Again, the campaign was tremendously successful. By 2005, the average diamond wedding ring acquisition rate in the top 25 cities in China was 51 percent.

China’s bridal market remains very lucrative sector for diamond jewelry. Every year, about 13 million people get married, and according to Chow Tai Fook, the country’s largest jewelry retailer, more than half the brides will do so wearing diamond jewelry,  with each couple spending an average of RMB6,000 (approximately $1,000). According to Bain and Co., the figure is closer to 60 percent.

Some 60 percent of Indian brides are also getting married wearing diamond jewelry, according to the Bain & Co. study. There, diamond-set items are replacing the pure gold jewelry that traditionally has been part of the dowry given by the groom’s family to the bride, as part of the wedding tradition.

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