In a typically inscrutable release, De Beers has announced that, starting with the third sight of this year, it is offering new “value-added services” to its sightholders.
The release said these services “are designed to support DTC clients as they evolve their businesses to compete in the 21st century diamond and luxury goods industries.”
There are two kinds of services — “core services” and “growth services.” One thing the release only implicitly notes is that the “core services” will cost clients money — a two percent fee, payable by all clients. Many sightholders though this amounted to another two percent price hike.
The Core Services include items that are integral to Supplier of Choice, like the “Intention to Offer” system and the supplier extranet. The release does indicate that clients will not be subsidizing “market support” mechanisms like generic advertising and consumer confidence programs, as has previously been reported.
The other services, “Growth Services,” are optional, and sightholders can only participate if they choose to (although sometimes it’s debatable whether anything can be optional if you are a sightholder these days.) These services are called
“tools for growth and business development,” and include growth opportunity seminars, market insight workshops, generic advertising materials and business excellence seminars. This amounts to, as the Financial Times reported, De Beers becoming a de facto marketing consultancy.
Gareth Penny, DTC managing director, told the Times that “the idea is to use our expertise to ensure our clients can maximize the value of the products they sell,” and thinks that these services could become a big part of De Beers’ future business.
He said that “these services will go beyond anything provided by any other diamond supplier.”
The DTC is also giving the sightholders expanded ability to use their sightholder status as an intra-trade marketing tool, by allowing greater use of the DTC‘s trademarks. In a sense, this new arrangement makes sightholders something akin to franchhisees to McDonalds. The sightholders are running their own businesses but it’s De Beers that is doing most of the strategizing and calling the shots.