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Slower Visitor Traffic at JCK

Day 3: Notes from Las Vegas

Jun 7, 2017 9:19 AM   By Avi Krawitz
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There was a bit of a debate raging among exhibitors at the JCK Las Vegas show, and part of it revolved around the organizers’ decision not to hold the event over a weekend.

Buyer traffic was down — according to some estimates, by 20% to 25% — and suppliers were trying to figure out why. The popular theory was that retailers didn’t want to leave their stores during the week and therefore decided to give JCK a miss this year. But as one established buyer argued, “the weekend is a store’s busiest selling time. So if anything, it’s better for them to hop over to Vegas during the week.”

Rather, he suggested, the show didn’t have the “junket” retailer who comes for the weekend party, attends the show for an hour or two, and spends the rest of the day at the pool.

This year’s show had fewer, but more serious buyers roaming the aisles. And they came with very specific requirements that were not easy to fill, explained one New York-based manufacturer, who requested anonymity.

Buyers are looking for better-quality (triple EX, None), I-color, SI-clarity diamonds that are not readily available, explained Charles Rosario, a senior vice president at New York-based polished supplier Lazare Kaplan International.

There’s greater competition to source goods in that category, since it has traditionally been strong in the US, while Chinese demand has shifted to lower price points and into the SI category. At the same time, supply is limited — “because you can’t request what mother nature choses to produce,” as Rosario explained — and that supports the price of those better-quality goods.

Meanwhile, suppliers have been discounting their excess old stock, but US jewelers are not buying diamonds for inventory “even at reduced prices,” according to the New York-based manufacturer. Overall, he said, people are comfortable with their inventory.

That puts into perspective some of the trends we’ve seen in the rough market recently. Rough demand has been robust, but De Beers and Alrosa have limited supply in the past two months, with De Beers reducing supply to sightholders by an estimated 20% for the coming year.

While De Beers said the reason for the lower allocations was the company’s commitment to the Namibian government to provide more rough to support local manufacturing, sightholders have suggested De Beers is simply aligning supply with the lower level of polished demand.

After all, activity in the polished market remains stagnant as jewelry retailers take care not to build up too much inventory, aiming to manage their businesses more efficiently in light of cautious consumer buying.

Appropriately, much of the discussion at the show’s educational seminars and events focused on how to lift consumer demand. Two events on Tuesday morning tackled that very issue.

At the first of those, the Diamond Producers Association (DPA) gave a limited view of its planned advertising campaign for the second half of the year — now that it has a $50 million budget to spend in the US.

The group, which leads generic marketing on behalf of the industry, announced an extension of its “Real Is Rare” campaign into national print and digital display channels, having already teamed up with Brides, People and Marie Claire magazines for the campaign’s first run in July. Two new videos are also slated for release in October, while the expanded budget will enable the DPA to hire new staff and strengthen its online conversation with consumers, explained Jean-Marc Lieberherr, the association’s executive director.

The second event saw India-based manufacturer Shree Ramkrishna Exports (SRK) unveil a new logo that will steer its direction in the coming years. The group challenged the industry to understand “what’s next” for the diamond and jewelry market.

In answering that question, Paul Rowley, head of De Beers’ sightholder sales, urged the industry to look at how it marketed diamonds, and to sell in a different way.

“We have to ask ourselves how we interact with a changing consumer base and understand that it’s all about storytelling,” Rowley said in a panel discussion that was part of SRK’s launch. “There are opportunities for creativity and innovation which are going to drive the industry forward.”

Extending that thought, Tom Moses, executive vice president and chief laboratory and research officer at the Gemological Institute of America (GIA), declared that however the industry evolves, it must communicate that a diamond holds intrinsic and emotional value.

“We sometimes forget such positive aspects of our product, as the focus tends to shift toward the challenges facing the market, such as synthetics and bank credit,” added Erik Jens, head of diamond and jewelry clients at ABN Amro bank.

Companies with a clear story that encompasses corporate social responsibility (CRS), innovative design, and marketing, as well as companies that are careful to know their client, transaction and product, will find their place in the market, Jens contended.

Exhibitors took those messages back to their booths, recognizing that the market remained in flux — as was evident from the many retailers who chose not to attend this year’s show.

With declining numbers at JCK Las Vegas and other major shows on the industry’s calendar, both wholesalers and retailers are questioning the trade show model. There are simply a lot of avenues for sourcing goods throughout the year — be it online, at the bourses or on the road.

That makes the show’s follow-up even more important. And with two days of JCK left to go, suppliers are realizing they need to be proactive to find buyers and demonstrate their added-value story. If they can achieve that, it will have been a successful few days for them, regardless of the visitor numbers.
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Tags: ABN Amro, Avi Krawitz, De Beers, Diamond Producers Association, diamonds, GIA, JCK Las Vegas, Jewelry, Rapaport, Shree Ramkrishna
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