It’s not new news that marketing plays a huge role in the success of an industry, diamonds included. Marketers describe how pretty, inspiring, and romantic an item is. They make promises and give the item meaning. But what about marketing the concept of the market itself? The diamond industry is a sparkling example of the use of an ingenious concept known as the perception of scarcity to successfully create real value in an item—more or less out of thin air.
Diamonds are not actually a rare gem, but they are rare enough in the consumer market to enjoy an incredible mark-up from their raw price.
Before 1870, however, diamonds were rare, with their total global production only amounting to several pounds per year. That year, miners discovered diamonds by the pound near the Orange River in South Africa. Now, diamond mines in multiple locations, such as the Democratic Republic of Congo and Russia, yield several thousand pounds per year.
Diamonds everywhere! Awesome! Lots of people can make lots of money because we can sell more diamonds. It’s like a diamond rush, right? Well, it turned out to be only sort of awesome for some people, a problem that De Beers recognized right away.
Imagine picking out the perfect dress for prom—you traveled across the country to get it. (Guys, work with me here.) You’re going to be the only person there wearing a dress from California, or New York, or Alaska, or wherever across the country is for you. Imagine putting on the dress, admiring yourself in the mirror, getting lost in the way its perfect hue brings out your eyes. Imagine how special you feel, how valuable. Now, imagine showing up to prom and seeing not one, not two, but ten other girls wearing the same dress. To make matters worse, they all got it from the Macy’s sale rack down the street. Suddenly you know you are quite a bit more anonymous, you feel less pretty, less valuable. Your date turns to you a futilely mumbles, “You look prettier than all of those girls in that dress…” then trails off and wanders over to the punch table. You’re left standing alone, unnoticeable, in the threshold of the gym doorways until other well-dressed prom-goers push past you. You and the ten other girls wearing your dress fade away into relative obscurity.
What if you could buy all of those prom dresses before the ten girls got them, then re-sell them to girls at other proms for a higher price than you paid, girls you would never, ever see wearing your dress. Would you do it? I’ll answer that for you: Yes.
And that is exactly what De Beers and Friends did. No, they did not go into the prom dress business. They controlled the market. They couldn’t have everyone knowing that diamonds were easy to come by, and certainly couldn’t have everyone else taking diamonds and doing with them what they would. So what did DeBeers do? They bought them. All.
1888: The Diamond Ring
Because De Beers and other big names in the industry recognized catastrophe in abundance, they banded together and began operating in different regions under accurate but forgettable names such as the Diamond Trading Company, Diamond Development Corporation, and Mining Services, Inc. These companies are today collectively known as “the Syndicate.” (The Atlantic)
1938: De Beers Pursues the American Dream
Harry Oppenheimer of DeBeers saw the diamond market threatening to plunge due to the outbreak of war in Europe, so he turned away from watching the laws of supply and demand work on their own. Instead, he went to Philadelphia and hired Ayer himself of the advertising firm, N.W. Ayer & Son.
1947: Forever Begins
The fat cats at DeBeers saw that their marketing plans in the United States were working for the most part, but asked Ayer to up the ante a bit. Thus, one of the most influential advertising slogans of all time was born: “A Diamond is Forever.” Has a ring to it, don’t you think? (ADWEEK)
1950s and 1960s: The Making of an Heirloom
According to HowStuffWorks.com, after a decade or so of marketing the forever-ness of diamonds, DeBeers encouraged people to keep diamonds as family heirlooms. The goal behind this marketing campaign was to prevent people from re-selling diamonds, leaving most of the diamond sales in essentially the entire world to the fine folks at De Beers. They began instructing diamond owners to hang on to their precious gems, and Americans listened.
2004: The Acceptance of Unmarried Women
With their finger ever on the pulse of the diamond market, and their hands ever in their pockets, De Beers saw yet another plunge in sales. Instead of trying to force feed the old school idea of a woman hanging all of her hopes and dreams on marriage, the idea of the right hand ring slowly crept into the American psyche. “The left hand says ‘we,’ the right hand says ‘me,’” the campaign explained, encouraging women to expand their idea of the love symbolized by a diamond.
In these uncertain times, one thing seems certain: diamonds are here to stay, even if their meaning changes. Get the most value for yours with Diamond Lighthouse.