When Life Gives you Lemons...

Sometimes, it seems that there isn’t any positive news out there – and this is one of those times. However, even though times may be bad, it is always good to remember that from crisis comes opportunity and what seems challenging now may become a great catalyst for change. But first, the bad news:

Exhibit A: The GIA recently discovered 500 or so colorless or near-colorless diamonds submitted to its grading lab in Israel that had undergone a mystery process, temporarily improving their color and enabling them to receive a higher color grade. Once again, the industry’s reputation is at risk, and for a sector trying to ensure the highest levels of consumer confidence, this is worrisome.

Exhibit B: It turns out that the US specialty market is almost 10-percent smaller than previously thought, according to newly revised data from the US Department of Commerce.

Exhibit C: The growth of the diamond jewelry retail sector slowed (albeit slightly) last year, with diamond content in jewelry also falling. Also of concern, and to quote Chaim Even-Zohar in this month’s focus, last year, “most players reluctantly realized that the traditional fabric of mutual trust has become an illusion. Whether between suppliers and customers, clients and bankers, bankers and regulators, or industry and governments, it is clear that something quite irreversible happened.”

But, is it really all doom and gloom? I don’t think that anyone can call this one of the industry’s high points, however, as the saying goes; when life gives you lemons; make lemonade (or, preferably, lemon pie). So, as I already said, instead of seeing the current situation as a crisis, it’s important to spot opportunities that lie ahead of us.

As far as the latest grading scandal, well, show me an industry that doesn’t have its dark spots. While we still don’t know the exact story, we should be proud that this deception has been uncovered. In fact, why not turn it on its head and make some noise that the diamond industry is one that does not tolerate fraud, cheating or deceit. If jewelry sales are falling and diamond content in jewelry is dropping, maybe it’s a sign that instead of despairing, it’s time to change what has been done up until now. Maybe it’s a time to explore completely new types of products.

Could it be that there is a niche market for lab-grown diamonds? Let’s find out.

And, rather than fearing the “dreaded” Millennial customer, it’s time to figure out what they want and how to compete with the experiences and gadgets that we keep being told this key demographic prefers to diamond jewelry.

Furthermore, why can’t jewelry purchasing be an experience in itself? Perhaps, if the industry moved past the traditional model it’s been using for decades and became more hip and relevant, we would see growth in the coming years.

There’s no doubt that we are being handed some lemons right now, but in the right hands, they can be made into something delicious – and profitable.

Have a fabulous weekend!