De Beers remains optimistic on diamond sales
De Beers group remains optimistic on diamond sales this year although the period brings uncertainty about what consumers would want to spend on.
In its Diamond Insight Report 2020, De Beers Group Chief Exective Officer, Bruce Cleaver highlighted that as stores around the world reopen, retailers are developing new strategies that meet safety requirements without diminishing customer experience in the ‘ new retail normal’. The pandemic has triggered the worst global economic downturn since the Great Depression. He said retailers now have a number of tools and strategies they can employ to improve their forecast as well as customer experience, adjusting to customer needs and new shopping behaviours. “This holiday period brings added uncertainty around spending and what to expect for retailers. However, in the luxury sector, for those that remain financially well, the holiday season will be used to lift spirits and combat what has been a difficult year,”
According to the report, the pandemic caused people to re- evaluate their spending and findings from June indicate that almost 45 percent of US consumers are likely to buy fewer, better things this year.“When it comes to gifts, over 56 percent would like to give something meaningful this holiday season. And 90 percent of US consumers want to give a gift that will hold its value over time,” states the report. However, Deloitte is forecasting an increase in holiday retail sales in the US of between one percent and 1.5 percent to reach US$ 1.15trn from November to January, with e- commerce to increase by 25- 35 percent to as much as US$ 196bn.
In his note, Cleaver pointed out that following the events of 2020 there is an expectation of rapid rise in online purchasing and an enhanced appreciation for the natural world to continue at pace within the diamond industry. “Yet another constant also remains, people continue to treasure diamonds for their enduring ability to carry meaning and emotion, perhaps now more than ever.”
De Beers sold $ 467m worth of rough diamonds at its latest sales cycle, 57 percent more than the same sales period in 2019, 40 percent higher than the previous sale. This indicates rough demand has picked up significantly in view of the holiday season. The International Monetary Fund reports that the global economy is projected to contract by - 4.9 per cent in 2020. Cleaver explained that since the start of the pandemic, De Beers Group has undertaken regular research to understand the consumer psyche as the group moves through the various stages of the crisis, looking at how it has impacted consumers emotionally and financially and in their purchasing attitudes and behaviours.