Gemfields CEO Ian Harebottle is looking to transform public perception of emeralds, rubies, and sapphires. Since Marilyn Monroe sang “Diamonds are a Girls’ Best Friend” in 1953’s Gentlemen Prefer Blondes (what’s wrong with redheads?) diamonds have dominated the precious stone market. The $21 billion market is 90% attributable to diamonds.
Until the 1940s diamonds and gemstones were close contenders. When De Beers started chanting “a Diamond is Forever” in 1947, things quickly changed. The generic industry marketing worked. De beers held a monopoly; eventually their price fixing caught up to them. No one has filled the marketing void and the last five years or so have seen little category marketing. Diamonds are in danger of losing cultural imperative. Stephen Lussier, CEO of De Beers in London told Bloomberg Businessweek, if Gemfields can demonstrate “clear industry leadership, they will have a chance.”
Colored gemstones are – get this – more rare than diamonds! Yet emeralds, rubies, and sapphires are cheaper than diamonds.
Why? Marketing. But this may change soon. Uncut diamonds are experiencing their first annual decline in four years. Colored gems are rising in popularity. According to Gemval, emerald prices have increased tenfold in three years. Rubies have risen in value 63% since 2005. Sapphires by 45%.
Why the shift? Though many in the down economy are holding off on “popping the question,” those that do are often asking with colored stones which are much easier on the pocketbook. (What the heck is a pocketbook? Does anyone still say that?) On Blue Nile a .9 carat diamond that’s IF and D (ask your girlfriend, she’ll know what that means) will go for $7,000. A emerald on AfricaGems the same size goes for half as much.
Sparklers of note are changing public perception as well. Kate Middleton’s sapphire has been in the news. As have Beyonce’s black diamond, Halle Berry’s emerald, and Jessica Simpson’s ruby. Coincidence? I think not.
Harebottle who produces 20% of the world’s emeralds is increasing Gemfields’ marketing budget. In 2009 they spent a mere $150,000 on marketing. The budget for 2013? $4 million! Harebottle is looking for a celebrity endorser to do for colored gemstones what Marilyn did for diamonds. Harebottle also needs a great industry slogan (think “Got Milk?”) to transform gemstone perception. Harebottle doesn’t mind carrying the weight of the marketing cost for the entire industry as long as it benefits Gemfields.
Moral of the story? Public perception IS reality. What people think DOES matter. Also, get ahead of the trend – buy colored stones now! I like sapphires, both blue and yellow ones (wink wink).