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With these aspects in mind, three areas of investment
are likely to be particularly important for future growth:
1. Investment in
branding
,
marketing and raised
retail standards
will help ensure that consumers,
particularly among new generations and new
geographic markets, do not drift away from the
diamond jewellery category in favour of competing
items, be they experience categories such as travel,
electronic accessories or designer fashion.
2. Investment in
production
to drive innovation and
productivity in diamond supply. Diamonds have
always been a rare and precious resource and, as
mining moves deeper into the earth and towards
more remote locations, the extraction process
is now becoming increasingly complex, remote
and more costly.
3. Investment in
technology
will continue to be a
key differentiator across the value chain, and
will also safeguard consumers against the risk
of undisclosed synthetics and treatments, which
could undermine the long-term credibility of
the industry.
Lack of investment in these areas will be value
destructive for the industry as a whole.
Overall, supply and demand prospects should
generate value-creating business opportunities
that will enable such investments. However, scale
and differentiation will be increasingly important
factors for future success, across all parts of the value
chain. The industry will continue to consolidate and
integrate (including through vertical integration),
and to professionalise, modernise and enhance its
transparency. This will be critical if it is to stay relevant
and profitable. Companies with scale will be better
positioned to make such changes proactively and
therefore to benefit from the continued growth of
the sector. Niche companies will have to differentiate
further their value propositions.
It is the responsibility of the entire industry, especially
those organisations of scale, to continue to make
these investments and secure the future of the
industry in the face of changes and challenges to
the sector. The ‘In Focus’ section of this Insight
Report discusses these three investment areas: the
changing consumer; the challenges in rough diamond
production; and the imperative of using technology to
safeguard the consumer and the industry overall.