The art of selling luxury goods

The company Gemfields has ramped up emerald production
Despite my recent immersion in the solemnity of the tea ceremony in one of the poshest shops in China, I do not pretend to understand or appreciate-luxuries, nor the fact that when a developing country starts getting just a little bit rich, luxury goods stores are the first things to pop up and apparently flourish.
Luxury playthings from clothes to yachts have a big impact on the media business, of course.
Those big spending glossy supplements in the weekend posh papers inaugurated by the Financial Times in London, but now imitated all over the world are so packed with covetous advertising that they keep the papers alive, or at least pay for the whole network of overseas bureaux a serious-paper needs to have.
Watches are a specific sector of the luxury goods market that I find both disquieting and intriguing and of course the watch industry is uninhibited about-taking swathes of space in rich persons' publications, some days seemingly the only ads a newspaper can still sell.

 And because there are so many pages of advertising, the watch industry has spawned a whole cadre of specialist journalists. Watch correspondents ceaselessly track the minute advances in watch engineering, brand storytelling, or design with seeming inexhaustible enthusiasm and delight.
They have acres of space to fill, opposite those ads.
The watch is really jewellery, of course: a signifier of big spending, nothing more or less, whatever the enthusiasts maintain. The curious thing about it is that for all the engineering endeavours of the past 300 years, even the most expensive mechanical watch is likely to be less accurate than the cheapest digital timepiece.
But luxury is not about telling the time. It's about telling the story of the owner in his or her own eyes.

Crash course

I've been thinking about the luxury industry because of an encounter I had a month or two ago at an international mining conference in Lusaka, the capital of Zambia. It was swarming with people involved in Zambia's big copper mining industry, which has long been a very significant part of the Zambian economy.

Gemfields is the majority owner of Zambia's biggest emerald mine
But it's not just copper. In the middle of all the copper miners, I bumped into Sean Gilbertson from a company called Gemfields, with a head office in stylish Jermyn Street in St James's in London. It's the home of posh shoes and striped shorts and many other luxuries.
Gemfields owns Kagem, the biggest emerald mine in Zambia. The company produces about 20% of all the world's emeralds.
Then and there Sean Gilbertson gave me a crash course in the gemstone business, an industry which (with my remoteness from most of life's little luxuries) I had never given much thought to before.
Emeralds are green of course, one of the gemstones that make up a colour palate for jewellers to use in their designs, along with red rubies and blue sapphires.
Diamonds are a bit different, coming from an industry dominated by De Beers of South Africa, which has used its pretty much monopoly powers to stand sentry over international diamond sales for decades. It decides who gets what at its monthly "sights" or diamond sales (recently shifted after 80 years in London to Botswana).

Advertising slogan

De Beers had such a grip on the market that it was able to devise a famous long-term marketing plan to unite diamonds with the idea of relationships.
In the 1930s Harry Oppenheimer of De Beers got the New York advertising agency NW Ayer to devise the slogan "Diamonds are Forever". It worked. De Beers used that kind of psychology to introduce the idea of a diamond engagement ring into cultures (such as Japan's) where they were an utterly alien concept.

Now other precious stones are belatedly learning from what De Beers has been doing for decades. What Gemfields is doing with its emeralds might be instructive for people in very different businesses.

Sean Gilbertson told me that Gemfields took over the Zambian mine in 2008. The Zambian government is a 25% partner in the operation.

Apart from the De Beers pipeline of diamonds, other gemstone supplies have always been rather erratic. Jewellers were never sure what stones they would have to devise jewellery around, month by month.

Gemfields decided to do something about that uncertainty. The company ramped up production.

At the same time the price of emeralds has been rising too.
Of course that flies in the face of the law of supply and demand. But it is a vivid demonstration of how enthusiastic buyers in a specialist marketplace become when they encounter a guaranteed supply chain of raw materials.

It means they can plan ranges and advertising around a flow of gems they can be sure of, rather than one-off deliveries they are always uncertain of.

Gemfields has also been pushing the ethics and transparency of their approach to what has the reputation of being a dubious business, gemstone supplies. And they've enrolled a glamorous brand champion from Hollywood, Mila Kunis.

Last year the company bought the venerable French jewellers Faberge, which until recently was owned (slightly curiously) by Unilever.

Faberge are the people who made all those blingy eggs for the Russian court in the 19th Century. Not quite forever, but a notable history. It is another profile-raising move for Gemfields, deepening the heritage connection with gems.

Annual colour

Weird currents flow in the luxury/fashion industry, where trends are invented, discovered and then proclaimed.

Sean Gilbertson was very pleased that emerald is the "2013 colour of the year" as proclaimed by the world colour authenticating firm Pantone. A proclamation that (I must confess) had passed me by. (The precise colour is Pantone shade 17-5641, by the way.)

Precious stone colours swell and fade in fashion, and if you've got a mine producing thousands of them there is seemingly little you can do when consumers get bored with green for a season or two. Except for acquiring mines producing other coloured stones, that is.

Well, Gemfields the company would argue that there is lots you can do by addressing the needs of the customers who count.

In this case, not the fashionable girls who chase a piece of jewellery to match the colour of their eyes... but the craftspeople and retailers who want a source of supply they can take seriously.

Business is often about thinking things through. That is what the late Harry Oppenheimer did with diamonds decades ago. Forever you might say.

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