De Beers, the renowned diamondmining company, has decided to maintain a linear pricing strategy for its Lightbox jewelrycollection, following a recent trial period where they experimented with different price points for lab-grown engagement rings.
De Beers to keep lab-grown prices flatwill either satisfy others or not.
De Beers, which typically prices its regular synthetic-diamond jewelry at a flat rate of $800 per carat (along with the cost of the setting), and its higher-end collection at $1,500 per carat plus the setting cost, introduced a limited range of lab-grown engagement rings in June.
During this trial, they chose to vary the prices in a non-linear fashion, but this approach met with a negative response from consumers, as reported by the company to Rapaport News.
David Prager, the Executive Vice President and Chief Brand Officer at De Beers, shared insights into their findings from the trial.
It was clear to us that above the $3,000 price point in the trial, there was less attraction for diamond engagement rings, and that below that, obviously, it’s going to be harder and harder to make a margin. What we saw very clearly was that [this] was not something consumers positively responded to. They liked the linearity; they liked understanding it. It was simple, and they didn’t understand why the linearity would break at a higher price point. So for us, linear pricing is going to continue to be core to the brand.- David Prager
In addition, Prager emphasized that De Beers has no intentions of further venturing into the bridal jewelry space after the testing phase.
He firmly rejected the notion that De Beers' entry into the lab-grown diamondcategory in 2018 provided validation for the sector.
I have heard this idea that through De Beers entering the category, it somehow legitimized it. I reject that completely. People are buying [lab-grown]; people are selling it. Our question [for the engagement-ringtrial] was, let’s test consumer response to our proposition and determine through our own data whether we think this has long-term sustainability. And for us, it doesn’t. For us, there are much better ways [to] invest and build that brand in a way that also supports the natural category.- David Prager
Separately, the mining giant is actively promoting natural diamondswith a substantial investment of $20 million in a new campaign. This campaign is set to run in the US from November through Christmas and in China between Singles Day and the Chinese New Year.
In his presentation, Prager detailed that the marketing plan will aim for a male-to-female ratio of 70% to 30% in the United States and an even split of 50-50 in China. In order to more successfully sell natural diamonds to customers, De Beers wants to work together with influential figures in the fields of culture, fashion, and style.
In a nutshell, De Beers is unwavering in its adherence to the linear pricing plan it developed for the Lightbox jewelry line. This entails keeping an approach that is constant and uncomplicated, which is well-received by customers.
In addition, the company has stated that it has no plans to increase its position in the market for lab-grown diamond bridal jewelry since it believes that there are other, more fruitful paths for the growth of a brand and the promotion of natural diamonds.
Through substantial investment and strategic marketing efforts, De Beers aims to strengthen the appeal of natural diamonds in both the US and Chinese markets.