Has Covid Changed us Forever?
December 24, 20
Will we ever get back to normal? We'll beat coronavirus, one day, that's for sure. But as 2020 draws to a close, will we revert to the way we were, or will the changes forced by Covid stay with us forever? Remote working, Zoom conferences and commute-free living have become the norm overnight. Will we rush back to our offices at the first opportunity, craving the company of colleagues, or will we remain at home, operating in our virtual worlds? The virus has turned the world of diamonds upside-down. It's an industry that thrives on handshakes, face-to-face sales and negotiations, real-life meetings, shared drinks, chance encounters, open skies, the buzz of a trade show or the thrill of a tender.
It has had to adapt and invent, and it's done a good job. March and April were disastrous by any measure, but with few exceptions there's been a solid recovery ever since. Mines that were closed by the virus have re-opened, the major miners are selling as much rough as before the pandemic, more in some months. India is manufacturing at close to full capacity and consumer demand for watches and jewelry, as well as diamonds, is bouncing back. We've seen wholesale change at every stage along the pipeline. In some cases we've embraced those changes. They were on the horizon anyway and Covid simply brought them forwards. In others we've found imperfect ways to cope.
Online sales to consumers is one area that's seen phenomenal growth. Lockdowns and enforced store closures left retailers with nowhere to turn except e-commerce. Tiffany & Co saw digital sales double to 12 per cent of total net revenue in Q3. And Signet reported record online revenue of $270m in Q2, up by over 70 per cent as bricks and mortar sales slumped by 46 per cent. The challenge has been to replicate the in-store experience online. Buying a diamond isn't like ordering groceries online. Very often it's loaded with meaning and the bigger the spend, the more likely the customer will want to see it, touch it, feel it. Given the choice, once we can freely associate without masks, will consumers opt for virtual sales consultation, or a "real" one?
The really big spenders seem happy enough to put in six or seven-figure bids for exceptional diamonds without being in the room. The Spirit of the Rose, largest vivid purple-pink diamond ever to appear at auction (14.83-ct, IF) was bought for a record $26.6m by a bidder over the phone. A ring set with a pear-shaped 12.38-carat VVS2 fancy pink diamond was sold to an online bidder for $4.6m by Sotheby's New York. And a Japanese collector paid $15.7m for a 102-carat, D-color, flawless diamond in October - a record high price for a gem in an online auction.
At the far end of the supply chain De Beers, Alrosa, the biggest sellers of rough, have found ways around months of travel restrictions, by holding Sights and tenders in other venues and by expanding their online offerings. Digital shopping for millions of dollars worth of carats is do-able, but De Beers, for has been welcoming Sight holders to Antwerp, Dubai and Ramat Gan as well as Gabarone because it knows they want to get up close and personal with the goods.
In days gone by, before March 2020, trade shows pulled in thousands of people, forging new relationships, rekindling old ones and providing a boost to airlines, hotels and the broader economy. Virtual alternatives are cheap, efficient and don't involve packing a suitcase. But staring at a screen for hours to "attend" is still a solitary experience.
In every sphere we've stepped up to the challenge and found practical solutions to Covid problems. One way or another the job gets done. But I think in the long term the magnetic pull of human association will draw us back, at least in part, to old ways. Imagine a meal at your favorite restaurant or the holiday of your dreams somewhere very exotic. Sitting at home watching a live-stream of other people sitting down to dine or sipping cocktails by the pool wouldn't really make up for what you're missing. Only the real thing is the real thing.
Tapping away on a laptop in your pajamas is a convenient alternative to the office, but it's lonely. Very often it's the coffee and chat before the meeting or the elevator encounter afterwards that's more important than the meeting itself. Online meetings can't replicate those extras. There's much to be absorbed simply by being in an office, picking up cues, observing body language, sniffing the air, sensing the mood, overhearing conversations, seeing new faces. You can't put a bottom-line value on these things. They're intangible, but important. That's why I predict a partial backlash in the workplace post-corona. Elsewhere, if we're going to benefit greatly from actually seeing a person, or a diamond I think we'll do exactly that.
Have a fabulous weekend, and a fabulous 2021!