Fact: India is the global center of diamond manufacturing. The vast majority of the world’s rough diamonds (85%) are polished in India. With so much focus and fanfare on the manufacturing side of the industry, it is important to take note of changes occurring in the Indian diamond and jewelry retail sector as well.
Beyond manufacturing, diamond retailers in India are adapting their sales approach in keeping with new consumer trends. This has a reverse effect on the diamond pipeline, spurring diamond manufacturers to become “retail ready”, with built-in sales technologies on their inventories to support diamond retailers with added value during the in-store sales process. To understand the retail ready concept, let’s start at the early pipeline, in the manufacturing stage.
Over the past 30 years, India has become the world’s leading diamond manufacturing hub. This is evident in recent statistics - from April to November 2018, exports of cut and polished diamonds were valued at $16.55 billion, making up 79.84% of the total gem and jewelry exports in terms of value.
As the largest diamond manufacturing center in the world by far, India is clearly a focal point for polished diamond sourcing for traders and retailers worldwide. What’s more, the local Indian diamond and jewelry retail sector is uniquely positioned in close proximity to the bulk of the world’s polished diamond inventory, a fact that can be leveraged by both diamond manufacturers and retailers along the value chain.
The expansion of the middle class in India has given rise to higher consumer demand for luxury goods, including diamonds and diamond jewelry.
Image Source: Bain & Company Report “The Global Diamond Industry 2018: A Resilient Industry Shines Through”
In response to current and expected growth, the “underdeveloped” Indian diamond consumer market is forecast to change. At the moment, just 10% of Indian women own a diamond, compared to 20% and 70% in China and the US, respectively. Apart from the growth in local consumer spending on luxury goods, India is also a hot destination for luxury purchases for tourists visiting India from various countries, with the top 3 being the US, UK and Hong Kong.
Faced with burgeoning diamond retail demand, jewelry retailers throughout India are stepping up their game, focusing on ways to enhance the in-store purchase experience.
The diamond pipeline, from the mine, through manufacturing, grading, trading and retail, has changed in recent years to a ‘reverse pipeline’. Today, a key factor driving manufacturers’ activities are retail trends - that is, the diamonds that end consumers are demanding right now.
This particularly affects manufacturers in the areas of rough diamond planning and diamond cutting. Manufacturers must produce diamond inventory that retailers are requesting, based on what is currently happening on the sales floor. This requires a much more flexible approach on the part of diamond manufacturers, as they need to be capable of adapting their manufacturing flow according to changing consumer trends, in rapid and dynamic way.
The emergence of the millennial and Gen Z generations into adulthood is creating a wealthier, more willing consumer, yet also a more discerning one. Modern consumers have more information at their fingertips, on their smartphones, making them the most informed generation ever. This also means that retailers must provide a new, engaging experience that gives the customer a deeper way to understand the diamond. The purchase process is no longer just about the product - it is also about the experience of the purchase and ownership of the diamond.
In the diamond industry, a host of advanced retail technologies are enabling jewelers to provide this deeper, emotionally-connected experience that today’s consumers crave. The Sarine Light™ Performance report provides a visual, interactive digital display of the diamond’s play with light, one of the most important factors in determining the diamond’s visual appeal. The Sarine Diamond Journey™ report tells the story of the diamond’s entire lifecycle - from the mine where it was found, the original rough diamond from which the polished diamond was extracted, illustrations of the way the diamond was planned and polished, and a range of grading data in visual, interactive format. It has already been adopted by some of the world’s leading diamond brands. For diamond retailers, digital tools such as these are much more than just “lab reports” - they are an immersive experience for consumers that help retailers enhance the purchase process.
With an understanding of the way that diamond retailers are interacting with the modern consumer, manufacturers should be at the ready to provide retailers with diamond inventory that is designed to sell. Apart from keeping up to date with consumer trends, manufacturers can incorporate Sarine scanning for Diamond Journey reports during the actual manufacturing process. It requires no addition of extra scanning devices - the infrastructure is already in place. By incorporating the Sarine Diamond Journey program into their production processes, manufacturers can become “Journey Ready”, with the ability to supply retailers with value-added diamond inventory that comes with a built-in Diamond Journey report. The Diamond Journey experience is available from anywhere via online link, supporting retailers with an accessible digital tool to provide a deeper, more engaging consumer experience of the diamond’s story.
Recently, Sarine established a pilot of the “Journey Ready” program with participating manufacturers in India. Together, manufacturers, retailers and Sarine’s technology are working to support and enhance the entire diamond industry - from manufacturing through retail - across India.