When diamonds were discovered in the remote East Kimberley region of Western Australia in the early 1980s, it was the most significant diamond discovery in over 50 years. The sheer volume of the Argyle Diamond Mine’s predominantly small, coloured gems stunned the diamond world.

Almost 30 years on, however, it’s not production rates that have stamped Argyle’s mark on the diamond industry, but the amazing change it has brought about in the world’s attitude to affordable diamond jewellery.

Entering a market where colourless, or “white”, diamonds reigned supreme, Argyle took on an innovative marketing decision. It decided that it wouldn’t follow the industry norm of selling its predominantly “brown” stones for industrial use, but would instead aim to develop a public taste for a new kind of diamond.

That decision has effectively transformed the diamond marketplace, with Argyle’s diamonds finding new homes not only on glamour-soaked catwalks and red carpets, but on the necks, wrists and fingers of women who thought diamonds were far beyond their reach.

Argyle is attempting one of the boldest marketing feats in diamond history

Modern Jeweler magazine

Taking on the heavyweights

In the 1920s, the influential French fashion designer Coco Chanel challenged the notion that jewels were only for the very wealthy when she pioneered the use of costume jewellery. Her blending of authentic pieces with provocative everyday materials established the notion that glamorous accessories could be an “of-the-moment” fashion item, rather than a long-term investment, and that a little bit of opulence should be available to all. In the decades that followed, the fashion jewellery market grew while starting to explore less conventional forms and materials: today, wood, acrylic, leather, resin and metal are just as likely to be used in trend-setting runway creations as precious jewels.

Where “real” diamonds were concerned, however, the De Beers group had effectively locked the gates on public opinion, using its considerable advertising budget to convince Western consumers that white diamonds were the ideal, and that a man in the mood to get married should spend a chunk of his annual income on an engagement ring containing one or more of these iconic gems.

According to Jean-Marc Lieberherr, chief commercial officer for Rio Tinto Diamonds, very few in the industry thought that a brash new kid on the diamond block would be up to the task of taking on an industry heavyweight such as De Beers. Yet challenge them Argyle did, creating a new fashion jewellery market for its small affordable gems, while also providing rich fodder for marketing academics around the world.

Pursuing value

“For the Argyle team, the marketing challenge was large but it was also quite clear,” explains Jean-Marc.

“Despite Argyle being an incredibly productive mine from its time of commissioning in 1985, more value needed to be attached to the core of our production to improve profitability.

“Having established a relationship early on with India, when it was an emerging diamond and jewellery manufacturing hub, we knew that our diamonds could be competitively cut and polished to maximise their appeal. We repositioned our brown stones as Champagne Diamonds, registered this trademark in several countries, and established a grading system for the diamonds that was endorsed by the Gemmological Institute of America. This recognition would prove invaluable in convincing wholesale and retail jewellers of the merit of the champagnes in future marketing campaigns.”

China joins the fashion trend

China joins the
fashion trend

Kent Wong is managing director of one of China’s jewellery giants, Chow Tai Fook Jewellery, which has a distribution network of more than 1,500 stores across the country and concedes the gold-obsessed, traditionalist Chinese market was a hard nut to crack.

Kent Wong is managing director of one of China’s jewellery giants, Chow Tai Fook Jewellery, which has a distribution network of more than 1,500 stores across the country and concedes the gold-obsessed, traditionalist Chinese market was a hard nut to crack.

He says he has experienced “revolutionary” changes in the Chinese jewellery market in the past decade.

“Gold products and simple solitaires are no longer sufficient to satisfy Chinese customers. What they are increasingly looking for is unique and fashionable jewellery for everyday use. Chinese consumers increasingly want to feel unique and are starting to buy according to what they want, not what society dictates. As a result, design has become a much more important factor.”

According to Kent, small diamonds provide the flexibility to be creative with jewellery, whilst remaining affordable. He says the launch of Chow Tai Fook’s first diamond fashion jewellery collection in 2010, featuring coloured diamonds from the Argyle mine, proved the market’s appetite for more personal and innovative jewellery that could be changed regularly, like clothes or handbags.

“We know this trend is not new in Western markets, but in the Chinese market there hasn’t been such an option,” he said. “Once they knew it was available, we found consumers jumped at the chance to own fashionable and affordable diamond jewellery.”

Image: A Chow Tai Fook ring, featuring diamonds from the Argyle mine.

Cracking the US market

In the early 1990s, Argyle launched a World Jewellery Design Competition, with a prize pot of US$250,000 to lure designers around the world to use the diamonds as a central element of their work. The competition generated worldwide interest and effectively created a large pool of designers who appreciated the beauty and design potential of the Argyle diamonds.

With extensive market research in the world’s largest retail diamond jewellery market – the United States – revealing that US consumers did in fact find coloured diamonds attractive and “equivalent in value to white”, Argyle set about convincing the sceptical US trade market of the sales potential of its gems. Its cross-country road show of public relations and training activities (“The brilliant light of Australia has arrived . . .”), soon had major jewellery retailers sitting up and taking notice, and it was not long before the small champagne diamonds gained serious sales traction.

As Modern Jeweler observed at the time: “Argyle is attempting one of the boldest marketing feats in diamond history: to re-stitch the mystique of diamonds to include, instead of exclude, coloured stones.”

Recalls Jean-Marc, “We ran sophisticated full-page ads featuring not models but ‘real women’ – attractive and diverse in their appearance and professional backgrounds. This resonated with the target group identified in our market research: mature women who regarded champagne diamonds as a fashion accessory they could buy for themselves, not a ‘rite of passage’ gift bestowed by somebody else. This approach hadn’t been tried before. Suddenly, the small affordable diamonds were appearing in shopping malls throughout the country, snapped up by millions of Americans.”

Rio Tinto’s bold strategy to differentiate its diamonds based on affordability, remains a central element of its marketing activities, and its “let’s do things differently” approach has started to resonate in countries where rapid social and economic change is occurring. The Nazraana campaign, launched in India in 2011, tapped into the strong gift-giving traditions surrounding Indian wedding celebrations. In China, Argyle set up a partnership with leading diamond jewellery manufacturer and retailer, Chow Tai Fook. And Rio Tinto remains very active in the established US market, introducing its grey-toned “Silvermist” collection there in 2008 and its “Shades of Wonder” collection more recently.

While Argyle’s mine production has slowed in recent years, a shift from open pit to underground mining will soon see a return to volume of its small, affordable diamonds. Jean-Marc says the issue of affordability will remain central to its marketing strategies in both new and existing markets.

“Diamonds are no longer just for the rich or the elite,” he says. “The availability of small and affordable diamonds is making it possible for women to buy and wear these gems as an expression of their own personality, rather than as a statement of affluence or ‘achievement’. We like to think we have played, and continue to play, an important role in democratising diamonds.”