Many years ago, a De Beers director quietly admitted to me that even if all the marketing efforts were working well and diamond sales were on the rise, the diamond industry would still not catch up with the luxury market and would continue to lose market share to it. If Baselworld is telling the industry anything, it is that the marginalization of diamonds in today’s luxury market is still ongoing.
From a diamond and jewelry perspective, Baselworld 2018 was an odd creature. Unlike other trade shows where diamonds are a prominent part – either as loose stones or set in diamond jewelry – Baselworld was focused on a different product: watches, and so everything else took second stage. Including diamonds.
Hall 1, where the largest Swiss brands were exhibited, had great foot traffic. According to the organizers, traffic was up 8% in the first few days, although the number of exhibitors were slashed in half according to a few participants and a few important brands, such as Jaeger LeCoultre, were not even present. Even without talking with the staff at the mega brands, it was obvious that they did well. Investing millions in a booth requires large sales. It was the smaller watchmakers in Hall 2 that were interesting. They were the ones that showcased noteworthy designs. Be it clean, retro, bold, or inspired by pop culture, these were the watch companies to spend time with. Unfortunately, the crowds that packed Hall 1 did not pay much attention to Hall 2 and thus missed out.
In Hall 1, the large brands heavily focused on the Chinese market. The catering to that market was obvious not only in the watch designs, which were colorful with floral and animal elements often incorporated into them. This focus extended to the way booths were designed, the ads featuring Asian models (see right), and mini-Chinese themed performances. After anti-corruption laws were passed in China a few years ago, sales of many luxury items plunged, including those of jewelry, cigars, whiskey, and high-end watches. Now, sales of watches and diamond jewelry are rising again, and the watchmakers are pursuing the Chinese market with renewed fervor.
The important takeaway here is that, after years of plummeting sales, the watch industry is making a comeback. Sales are rising, and maybe we can learn something from it. Marketing, branding, differentiation in design, focusing and catering to a specific market – all these elements were tucked into the Baselworld 2018 experience.
Marginalization of Diamonds
And then there were the diamond and gem exhibitors. It used to be that diamonds were an important part of Baselworld. However, this hasn’t been the case for the past several years.
In fact, this year, diamond folk feel they were marginalized. This is understood if a show wants to refocus its direction. Usually, if a company no longer wants to do business with someone, it simply stops working with them. But, here, it seems that with diamonds, they have chosen a more painful path.
The few dozen diamond and gem firms that exhibited were tucked away in Hall 3. To reach it, you needed to go through the entire length of Hall 1, up the escalator behind the last booth, then around a closed sitting area, over a small bridge, finally reaching the mezzanine that surrounded Hall 3. If you didn’t know that these merchants were there, you wouldn’t have stumbled upon them. A few of the exhibitors in Hall 3 felt that the location and the difficulty of reaching it was “inappropriate,” especially since Baselworld had increased their charges by 30%.
Those that didn’t find these exhibitors missed out on more than $1 billion worth of exceptional diamonds. Really top quality, beautiful diamonds. There were reports of some sales, mostly to pre-arranged appointments. Prices were stable too. But no one goes through the trouble and costs of exhibiting to sell to existing customers. You always want to gain a few new ones to make the effort worthwhile.
What Baselworld pointed out to the diamond industry this year, even if this was not its original intention, was that to stand out in a tough market, you need to be special. Large white diamonds, rare fancy color diamonds, very focused marketing efforts – the diamond companies that did stand out were the ones that met with success at Baselworld 2018. Don’t be surprised if this is what will characterize the direction of the entire diamond world in the future.