Focus on

THE DIAMOND TRADE

WITH A WHIMPER RATHER THAN WITH A BANG,
DE BEERS ENDS RECYCLED DIAMONDS PROJECT

Quietly, without very little fanfare, the De Beers Group has shut down the International Institute for Diamond Valuation (IIDV), which was established 2014 as a polished diamond buy-back service that would give players on the secondary market a fair price for their goods. Simultaneously, the company’s website has been taken down, and its social media accounts have gone off-line.

According to De Beers, the IIDV model business model was deemed to no longer be the optimal means of ensuring that diamond recyclers are treated fairly. 

“In the short time since the IIDV launched, there have been major digital advancements that have coincided with a change in consumer behaviors toward the use of online consumer-to-consumer platforms,” says David Johnson, a De Beers spokesperson.

TRYING TO END AN AWFUL CUSTOMER EXPERIENCE

When it was launched as a pilot project less than five years ago IIDV designed to be a service that would value diamonds for select retailers. Promising to reinvent the secondhand market for diamonds, it said it would “highest possible price one could achieve…on the secondary, wholesale market.”

Speaking at the JCK Show in 2014, De Beers then-CEO Philippe Mellier called the trade-in experience “awful.” If consumers don’t receive decent money for their diamond, it could hurt their confidence, he stated.

When the pilot phase ended in 2016, IIDV launched a consumer-facing website to buy goods from the public. But it never really caught on, forcing De Beers to change both its operational and marketing strategies several times, until it finally threw in the towel.

The IIDV evaluation laboratory, as it appeared in a 2015 promotional video produced by De Beers.

REASONS FOR BUY-BACK SERVICE’S POOR PERFORMANCE

Still, says the company, it does not consider the experiment a waste of time. IIDV’s provided the company with valuable “valuable insight into consumer behavior and the needs of our retail partners.” 

Several factors were cited for IIDV’s poor performance. Continual changes in management and direction were a contributory factor. Starting out as a service for retailers, consumer buy backs were added to the mix site, and then retailer events became the favored modus operandi. 

Furthermore, to ensure that the project did not become a haven for money launderers, IIDV demanded stringent know-your-customer (KYC) standards, which some found difficult to comply with.

Not many consumers knew about the service, and De Beers was reluctant to invest much in the way of marketing the project. In fact, De Beers even avoided using its own name.

The result was that high-value pieces rarely were acquired by the IIDV, and instead were directed to auction houses. 

Still De Beers says it has not given up on the recycled diamond market and is investigating new opportunities. But it did not say what they are.