For decades, colorful gemstones like sapphires and rubies dominated the jewelry and gemstone industry. In fact, up until the late 19th century, diamonds were more an accent stone than a center stone. Popular jewelry designs featured brightly saturated gemstones adorned in sparkling diamond embellishments.
So how did diamonds become the standard for engagement rings and jewelry? Are diamonds really rare? The truth is that diamonds aren’t the rarest gemstone in the world. If that’s the case, then why are they so popular?
Let’s take a walk down memory lane to reveal a brilliant marketing campaign and the rise of the diamond in modern society.
Prior to the end of World War 1 in 1918, diamonds weren’t even in demand. Global economic strain from the war combined with the low value of diamonds didn’t make them an ideal product to market. In fact, proposing with an engagement ring wasn’t yet a widely adopted practice.
For most couples, it was far more realistic and affordable to buy one wedding band rather than two rings. Back then, diamonds didn’t represent forever, or anything remotely close to it. In fact, diamonds, as we know them, became the symbol of love through artful and strategic marketing.
You may have heard of De Beers, but what is it and how did this company bring diamonds into the mainstream? The brilliant match between one visionary and an ad agency might even be more remarkable than the union of marriage itself. Well… not quite, but you get the idea.
In 1870, financiers funding the mining of massive diamond mines in South Africa struck big. Despite striking the motherlode of diamonds in South Africa, there simply wasn’t a market. Shocking, right? Well, how can you sell a product without demand?
You create a market. Still, De Beers Group couldn’t tackle this bold fete on its own. The company knew that if they wanted to bring diamonds into the hearts and homes of every family in the world, they’d have to partner with an ad agency powerhouse. Thus, the union between De Beers and N.W. Ayer was born. From this partnership came two primary (albeit overambitious) goals:
1) Monopolize the diamond market, and 2) Control the supply and demand across the globe.
Seem impossible? By all means, it should’ve been. The economy was in catastrophe from the war and people didn’t have enough money. Little did they know then, but the Great Depression would shortly follow.
If insanity straddles brilliance, the De Beers ad campaign mounts it beautifully. De Beers built the largest diamond mine in South Africa at the time, and N.W. Ayer convinced people across the world that you couldn’t propose without a diamond engagement ring as an offering. Why? Because...
We’ve all heard the slogan, in fact, “a diamond is forever” isn’t just a brilliant slogan, it’s now a figure of speech. So, how did it get that way? For De Beers to actually pull this off, they needed to get diamonds into the most influential rooms in the world, and that just happened to be on the necks, ears, and fingers of Hollywood actresses.
Thanks to Marilyn Monroe’s iconic performance of Diamonds Are A Girl’s Best Friend in Gentlemen Prefer Blondes, diamond popularity exploded. But selling diamonds wasn’t as glamorous as Hollywood depicted it to be. A rotten underbelly fueled by the greedy endeavor to corner the market by any means necessary (including murder, kidnapping, and worker abuse) left a black mark on the diamond industry, and rightfully so.
De Beers controlled around 80% of the market supply of diamonds. After an 80 year monopoly, things started to change in the 20th century.
With enhancements in technology and the incorporation of satellite detection, diamond mines sprouted up in Australia, Russia, and Canada in addition to South Africa. The discovery of diamonds around the world opened the door for more sellers to get a cut of the market.
If there’s one thing we’ve established, it’s that there are A LOT of diamonds in the world. If there are so many, are diamonds really rare? It might shock you to learn this, but diamonds are one of the most popular and common gemstones on this earth. If they weren’t, you wouldn’t see them flashing from the ring finger of nearly every married woman you know. Diamonds are less rare than sapphires, emeralds, and rubies, so why are they so expensive?
Ok, we’ve made it perfectly clear that diamonds aren’t rare, so why are they so expensive? On a value scale, diamonds are not only less rare than emeralds, rubies, and sapphires, but they are also less expensive per carat. Confused?
That’s because gemstones are valued based on features such as their size, clarity, inclusions, brightness, brilliance, or color. Diamonds seem expensive because we often don’t compare them to other gemstones.
And that’s not the only reason. Products in the economy are valued by their demand, but sometimes rare gemstones are more expensive because... well, they're rare. The story with diamonds is much different.
Diamonds are a girl’s best friend, but at what cost? As long as the public continues to value diamonds as the leading gemstone for engagement rings and jewelry, the prices will remain high. Of course, the market can change over time, especially when visionaries backed by billions of dollars corner the market.
As you can see, marketing has a lot to do with a gemstone’s value. Still, value isn’t singular but weighed based on a myriad of variables.
Bottom line: “a diamond is forever,” even if it isn’t the rarest gemstone in the world. Does that make them undesirable? Not at all! Diamonds are beautiful gifts from nature, but as with all things, beauty is in the eye of the highest investor beholder, and in the gemstone industry, that’s De Beers.
Luckily, De Beers now only controls around 40% of the market, making room for reputable diamond sellers to carve their place in the market.
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