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New Year Message from Martin Rapaport

Dec 31, 2012 11:59 AM   By Martin Rapaport
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RAPAPORT... The following is Martin Rapaport’s New Year’s Message to Rapaport members and the diamond industry:

As the New Year approaches, it is appropriate that we take a few minutes to reflect on the important developments of the past year. Let us be thankful for the health and wealth of our loved ones and to those that risk their lives for our freedom. Let us take a moment to appreciate all that is good in our lives.

Indeed 2012 was a year of great change, challenge and development. The idea that American economic power had lost significance proved wrong as the boom in China, India and the Pacific Rim fell flat and strong U.S. demand saved the diamond and jewelry trade. Let us learn from this,  while it is important to develop new customers, it is as important to maintain relationships with old customers. There is more to business than the latest fast buck.  Loyalty and maintaining relationships serve our long-term interests. Make room for the new but keep room for the old.

President Obama’s re-election is a clear sign that a generational shift is taking place. New priorities and values will dominate the political, social and economic landscape in the years ahead. Youth, women and minorities will have increasing say about what happens. The Arab spring, protests in India, and a changing government in China are all signs of new values and the power of the people to demand change. The jewelry trade must learn to excite and serve a much more diversified and segmented customer base. Our traditional and conservative industry must adopt new values and adapt to new customers. Our emotional products must be in sync with a new generation of emotional values.   The idea that we can ignore what our new customers want and continue selling questionable products is false. It is vital that we re-vitalize and re-legitimize ourselves and our products. We must excite diamonds in the mind of a new generation of consumers.

As we head over the fiscal cliff we must recognize our need for financial responsibility. Even a wealthy country like America cannot live beyond its means. Eventually, everyone must pay the bill for indiscriminate spending.  The idea that a society is entitled to a standard of living that it does not create is false. The same holds true for our trade. We cannot grow ourselves or our industry on funny money from irresponsible banks. Bank credit that enables firms to buy diamonds at unsustainable artificially high prices that inflate Ponzi scheme balloons must be stopped. Legitimate firms have no business manipulating prices. Given expectations that the fiscal cliff will reduce demand for luxury products due to higher taxes, increased unemployment and reduced government spending, responsible companies should refuse to buy diamonds at prices that do not allow for healthy profits. Buyers should just say no to high prices. The real value of diamonds must be based on real money from real buyers.

Having said all of the above, it is important to recognize that the New Year will bring unprecedented opportunities. There will be huge unlimited amounts of new customers looking for diamonds and jewelry at fair affordable prices. Those that identify and meet the desires of the many differentiated segments of the market will do extremely well – just like President Obama did in the election. The Obama campaign identified different segments such as youth, women, Hispanics, etc. and customized his campaign to and for them. There is riches in the niches.

The emerging middle class demographics in India, China and the Pacific Rim are huge and unstoppable. While there may be a few bumps in the road, steadily improving demand from these markets will support the diamond industry.   Economic and currency uncertainty will also increase demand for higher quality investment diamonds as wealthy consumers seek alternative stores of value.

The Rapaport Group will be introducing numerous initiatives in the year ahead. We will be expanding our pricing services to include more real time data, greatly expanding RapNet services, introducing a Rapaport Diamond Consulting Report, working on source certification, and expanding our Rapaport Auctions to include jewelry.

While there is no denying the fact that the year ahead looks challenging I believe that the challenges will bring great opportunities for those that have the right positive attitude. A key opportunity will be getting to know your customers much better. Not just as customers but as people with real wants and needs. Get to know yourself better as well. What are your strengths? How exactly do you add value? What is the cost benefit of your added value?  Be brutally honest with yourself and don’t be afraid to reinvent yourself. Most importantly, accept the fact that the world around you is changing. Recognize that people will always desire diamonds and jewelry. And position yourself to meet that desire.

With best wishes for a peaceful, successful, happy and healthy New Year,

Martin Rapaport
Rapaport Group

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Tags: 2012 year in review diamond markets china india u.s., Martin Rapaport
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