Finding gems: How De Beers uses insight

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In 1948, one of the most famous advertising campaigns of all time proclaimed that ‘A diamond is forever’. The slogan, written by Frances Gerety at advertising agency NW Ayer, created the modern concept of the engagement ring and cemented the diamond as arguably the world’s ultimate luxury consumer good.

The stone has since become a byword for beauty and a centrepiece for special occasions, such as engagements and weddings. It has also seeped into popular culture, with references ranging from Marilyn Monroe singing the slyly satirical Diamonds are a girl’s best friend, via James Bond and Diamonds are forever, through to Rihanna’s bombastic Diamonds.

The creator of the original 1948 campaign, De Beers, has maintained its central position in the diamond industry in the decades since. Its work spans the entire jewellery production process, from mining to cutting, as well as the sale of everything from rough diamonds to consumer-friendly jewellery.

Founded in 1888 in South Africa and headquartered in London, De Beers is 85% owned by mining company Anglo American and 15% by the government of Botswana. It has 20,000 employees working in 28 countries, including mining operations in Botswana, Canada, South Africa and Namibia.

The diamond industry has been somewhat controversial over the years, from the ‘blood diamonds’ scandals of the 1990s, with diamonds bought from conflict-hit areas of Africa, and concerns over the environmental impact of mining.

De Beers has provided ethically sourced and conflict-free diamonds since 2000, with certificates of authenticity and microscopic branding used to show diamonds have met the firm’s environmental and ethical criteria.
With sustainability an increasingly prominent part of the consumer psyche, especially among younger generations, there are challenges for a firm involved in mining.

Insight is key to informing the company’s strategy. “De Beers’ leadership has always valued insight generation and, over the years, has invested in it in a big way,” says Diana Mitkov, senior manager of demand insights and strategy analytics at the company. “It is used in the day-to-day business management and planning, and, of course, in setting strategic direction.”

Precious information

Mitkov works in the strategy development team for the De Beers Group, specifically within the strategic insight and analytics function. The strategy development team, consisting of 12 people, is responsible for areas including: business planning, such as long-term forecasting; competitive intelligence and insights; foresight; and strategic choices, involving analysing the diamond market to help provide choices about where the company should go, what it should do, and how it should evolve.

The team focuses on understanding the demand for diamonds globally, both from a consumer and business-to-business perspective, as well as broader trends in jewellery and luxury goods.

The three largest diamond markets – the US, China and India – are at the centre of De Beers’ research focus. Large-scale consumer surveys, carried out by Ipsos, interview 20,000 people in the US and 10,000 in China on a regular basis to allow De Beers to examine changes and patterns in the diamond industry and beyond.

Two changes in the diamond market over the past decade or two have led to strategic changes at De Beers, informed by the work of the insights department. The first is the growth in popularity of pre-owned diamonds, driven by changes in fashion, as well as more sustainable behaviours, which informed De Beers’ decision to get involved in the market.

Increasingly, people are trading in diamond jewellery to purchase something more in-keeping with current fashions, explains Mitkov – particularly younger generations inheriting jewellery. “We had identified this trend and, over the years, various pieces of research were done in that space to see what is going on and driving people to sell their diamond jewellery back to the trade,” says Mitkov. “De Beers decided to pilot a pre-owned diamonds venture and, gradually, this is evolving and transforming into a more complex circularity strategy that will help meet our ‘building forever’ goals.”

This ‘building forever’strategy looks to support environmental, social and governance issues at the company.It includes partnering with communities where diamonds are mined and making sure they benefit from diamond mining, as well as strengthening the firm’s ethical practices and protection for the natural world.

“Insight and really understanding people’s thinking around what they do with diamonds they own – how they dispose of them – led to these further developments in strategy formulation for the business,” Mitkov adds.

Consumer awareness of sustainability in recent years and technological developments have driven growth in the lab-grown diamonds market, which is now estimated to be worth more than $22bn and equivalent to 7% of loose diamond sales. Legacy players are also investing in the area.

Over 20 years or so, De Beers has been developing its lab-grown diamonds offer, using a threshold framework to test when it might be ready for the company to enter the market and carve out a niche for the product in the diamond industry.

In 2021, that work culminated in launching its own lab-grown diamond brand, Lightbox. However, it took a different approach to the positioning and marketing compared with natural gems.

Lightbox will be the only jewellery brand to source lab-grown diamonds from De Beers Group’s Element Six business, which produces lab-grown diamonds. Any Lightbox lab-grown diamond of 0.2 carats or above will have a Lightbox logo inside the stone.

“We wanted to position lab-grown diamonds in a different space to natural diamonds,” Mitkov explains. “We didn’t want them to be competing head-on – we wanted them to be complementary categories and to be different categories people could turn to for different reasons and occasions and motivations. Lab-grown was intended to be a much more accessible and affordable product that can be fun and can be acquired any day for any activity. We wanted to preserve the space of special occasions for natural diamonds.”

The insight team carried out a wide range of research on lab-grown diamonds – from modelling the potential share of the market that could go to lab-grown and carrying out qual to capture people’s feelings about the area. “Very few people understood what it was, so it was quite interesting to see what they perceived and what they thought would happen with this new product,” says Mitkov. The findings were that lab-grown is seen as a fun product you can enjoy and not worry about – an accessory – while natural diamonds remained the top choice for life events and special gifts.

Diamond provenance and origin traceability is a big issue that has recently resurfaced with the war in Ukraine, with Russia being one of the world’s biggest diamond producers. To help address concerns about the origin of diamonds, De Beers has produced a traceability tool to trace a diamond from its rough state to the jewellery consumer’s buy. The platform uses blockchain to allow diamond owners to access a record of a diamond’s provenance and track its movement through the diamond market. Users of the platform can also choose who can access their information.

“If you are able to tell that richer story of diamonds, it is much more positive for consumers and makes more sense for retailers as well,” Mitkov states. “Because consumers are interested, they want to understand whether what they buy is doing good in the world. Because it is a luxury purchase, that is even more so.”

Not set in stone

Information gathered from research projects is shared internally via an insight portal, covering market intelligence and pulling in information from a variety of sources. These include third-party insights and analyses and internal research projects, as well as external fortnightly data on sales presented on interactive dashboards that allow users to interrogate the data.

“Anyone who wants to know what the situation is in the retail space, and what retailers in the US are selling at the moment, can see how things are evolving,” Mitkov explains. “There is a lot of information that needs to be absorbed, and there is a lot of pull for that information. It is not as if we need to push that information to the business – people understand the value of it and are hungry to get it.”

While the bulk of the company’s insight work is at a group level, De Beers has small insight teams within its three main brands – De Beers Jewellers, De Beers Forevermark, and Libert’aime by De Beers Forevermark – which interact with the group’s main insight department. Often, the brand-specific teams have a narrower focus on brand strategy and products, including new collections and positioning.

There is a shift towards data analytics, and interest in the potential impact of artificial intelligence (AI) on the insights function. “From an insights perspective, digitisation and data analytics has become something of a great priority,” explains Mitkov. “We have been working on this, but the urgency is growing and I see the pace of adoption of technologies such as AI has grown phenomenally.”

Most of all, Mitkov is keen to work with research agencies as partners, helping them to truly understand the business. “I try to bring them on board as much as possible to explain to them what we are all about and trying to do, and to be very open – to bring them into the business – so they know the questions I am trying to answer and the challenges I am trying to resolve,” she says. “That’s the only way they can feel they are a partner to me, and that I can get the most out of the work they do.

“I am an advocate for an open and close relationship with agencies, where you have full transparency over what you want to achieve. That is a valuable feature of any productive relationship, where you can enable your research suppliers to become your consultants and partners.”

Hunting for gems

They might be luxury goods, but the natural diamond industry still has its challenges, notwithstanding the current macroeconomic climate. The company’s 2022 Diamond Insight Report found that, despite worldwide economic difficulties, diamond sales were up 27% globally in 2021, and up 32% in China and 36% in the US. In other parts of the world, there were greater challenges, with Japan, for example, seeing a 7% drop in 2021.

In the report, the company examined how Gen Z and changes in the digital world – such as the metaverse, augmented and virtual reality, and AI – as well as sustainability and ethical consumer behaviour, were altering the diamond market. The digital world was also a large focus of the report, with Gen Z in China, for example, increasingly using social media to research products to buy, compared with apps and websites for millennials.

The report deemed the metaverse to hold potential for ‘digital twins’ to be created of people’s jewellery to guard against losing an expensive piece of jewellery or having it stolen.

Several sources of information fed into the report, including a piece of primary research with GlobeScan to understand engagement among consumers with environment, social and governance issues, and how many people actually opt for responsibly sourced or sustainably produced items. The research found that jewellery was the third-biggest area for sustainable shopping, after food and clothing, and that 58% of consumers wanted sustainable jewellery over non-sustainable. Of that 58%, 92% said they were happy to pay more for ethical jewellery.

For another insight report, De Beers worked with DiscoverAI to examine the role of diamond rings in the ‘commitment space’, looking at the concept of commitment in all types of relationship, including family. The research used web scraping to understand the key themes in relationships, which helped inform a questionnaire presented in a Tinder-esque ‘swipe’ format and developed by DiscoverAI. Users could choose which of the themes they felt applied to them, and the research found that diamonds were often connected with ideas such as self-expression, the ability to show connection, and have fun.

Future-proofing an iconic product such as a diamond ring is an important job, and one that the insights function at De Beers has embraced. he company hopes that its 1948 claim that diamonds are forever does indeed ring true. Insight will be helping to light the way.

This article was included in the July 2023 issue of Impact.