A photo shows a display window of De Beers with diamond jewelry laid out.
Which Diamond Do You Like Best?
Ed Rooney/Alamy Stock Photo
Headquartered in Johannesburg, South Africa, De Beers Group is the 130-year-old company that specializes in diamond exploration, mining, retail, and trading. De Beers is partly if not mostly responsible for diamond rings being globally associated with engagement to marry. The company’s motto is “A Diamond is Forever.” De Beers is shifting its market segmentation strategy to focus on millennial consumers in response to generational shifts. Recognizing that millennials (76 million, ages 18–34) now outnumber baby boomers (75 million, ages 51–69) in the United States, De Beers wants to make sure diamonds appeal to this younger consumer segment. In the interview summarized here (condensed and paraphrased), De Beers’ CFO Nimesh Patel, explains that marketing diamonds to millennials will be critical to the future of De Beers. (Marketers refer to consumers ages 35 to 50 as Generation X; they will outnumber Boomers by the year 2028).
Q:What is your focus as CFO of De Beers since the firm has excellent finances?
A:Mining contributes 75 percent of our business, but it is the rest of the business that helps us drive consumer demand and maintain the value of the mining business. It is helpful for consumers to understand diamonds in order to maintain their affinity with the product.
Q:Why have you increased marketing spending and stepped up diamond advertising?
A:Our marketing spurs consumer demand through our downstream (retail store) business, Forevermark and De Beers Diamonds Jewelers, and through our sale of rough diamonds to the mid-stream industry. “Desirability” is what drives sales of luxury goods, and with increased competition from other luxury-good categories (such as designer handbags and shoes), we use advertising to drive desirability for diamonds. De Beers has 30 retail stores across Asia, the U.S., Europe, and the Middle East.
Q:How are you communicating the heritage of the De Beers brand to millennials?
A:We know that millennials have fewer real connections with people (despite more online/virtual connections), and these connections are more difficult to sustain. A diamond symbolizes a lasting, valuable relationship between two people; similarly, a diamond is rare, timeless, and valuable.
Q:Millennials value experiences and goods with an interesting and authentic story; how are you addressing this?
A:We know that buying diamonds is an experience. We talk to customers about where diamonds are from, how they are formed, and all the good that diamond mining has done to boost local economies in Namibia and Botswana, educating young girls, investing in clean water, and even helping preserve the white rhino.
Q:What trends are you seeing in regards to women purchasing diamond jewelry for themselves?
A:De Beers Diamond Jeweler has tailored its offerings to the strong, independent, often career woman; this is a growing consumer segment. Aside from diamond engagement rings, other diamond jewelry including rings, necklaces, and bracelets are actually often self-purchased. Many self-purchases come from unmarried women that comprise 43 percent of all women in the U.S.
Q:How are you approaching e-commerce?
A:Digital platforms are a useful way to educate consumers on diamonds. With the significant value tied to diamond jewelry, the experience of buying is important. People remember how, when, where, and why they purchased a diamond, so we try hard to make the process great.
How do you think De Beers could most effectively and efficiently advertise to millennials?
How do you think De Beers could most effectively and efficiently advertise to baby boomers?
How do you think De Beers could most effectively and efficiently advertise to unmarried women? How would this market segmentation strategy differ for targeting unmarried men?