Everybody Loves a Brand

Everybody loves a brand. In a world of uncertainty they represent quality and reliability. We trust them, we respect them, we believe in them. Do they actually create products that are objectively better? Maybe not. But they have somehow earned our trust and loyalty. We form an emotional bond with a favored brand. We pay a premium to have their logo on our clothes, or their badge on our car.

I like to think I'm above all that. But I'm not. When it comes to the small things in life I will opt for Heinz tomato ketchup over a supermarket brand, and I will pay extra for Cadbury's drinking chocolate, or a bottle of Glenfiddich single malt whisky. Are they better because they're branded? No. They're better because they're better. I like the taste, so I'm loyal to the brand.

But what about the bigger things in life - as in bigger purchases - like diamonds?  Two-thirds of all pieces of diamond jewelry bought last year in the US were branded, according to the newly-published De Beers Diamond Insight Report 2022, a figure that has doubled in the last six years.
Brands are important, especially to younger generations, the report says, as they "contribute to their sense of self-worth and desire to express individuality". Self-worth is undoubtedly a key motivator. Individuality less so, because brands have such wide appeal to a mass market.

I'm keen to understand the value of a brand not in dollars to the company, but in the happiness they bring to a customer.
Imagine you're choosing between two pairs of earrings. The diamonds in both are as near as possible to being identical. Same quality  and weight of precious metal, very similar design, both equally attractive. Only two things distinguish them - the fact that one comes in a box with a Tiffany, Cartier or Chanel logo, and the fact that the other one is considerably cheaper.

Strip away the emotion, the bond with a brand, the feeling that an aspirational need is being met, and judge them simply for what they are. Close your eyes in the jewelry store for a moment and allow the staff member to juggle the two near-identical pairs from hand to hand. Now open tour eyes again and choose. How do you feel now, without brand knowledge to guide you? Would your purchase of branded earrings be any less of a joy, because you didn't actually know they were branded. I understand there's a cachet that goes with an item of value when it is recognizably branded - a Patek Philippe watch, a Rolls-Royce car, a pair of red-soled Louboutin shoes. You know, and other people know that you've bought a brand.

But it seems we still yearn for the brand even when it's anonymous - when there's no logo or giveaway design feature. Like a piece of diamond jewelry. I'm guessing that means we do it for ourselves, and not for others. It makes us feel good, makes us feel connected with a brand, even if our peers have no idea and no reason to be impressed. There's one particular photograph that sticks in my mind. It shows a bucket full of rough diamonds, unsorted and, as yet, unbranded. They've all been on a long journey already, from way below the earth's crust, and they're about to embark on another journey, being traded multiple times before reaching their final destination.

It's only at the very end of that journey, in time and space, that they become a branded diamond.  The extra value is only a very late addition.
Branding is, of course, a multi-billion dollar business. I don't pretend to grasp the subtleties of how a luxury brand is nurtured and cultivated. But the end result is clearly that it places the branded product above the unbranded one in the eye of the beholder.
Diamonds are undoubtedly special, but what is it that makes a branded diamond intrinsically better than its unbranded counterpart, if we assume they're like-for-like 4C-wise?

Provenance? Traceability is a huge issue but let's take two pairs of earrings with all the paperwork in order, and choose again. Does the customer opt for the brand because they trust its assurances and its corporate values over those of an unnamed company selling an unbranded diamond? Maybe some do. But not all customers are that virtuous. 

Have a fabulous weekend.