Digital shift will change the way business is conducted

The global nature of the current situation means that different parts of the world, and therefore different parts of the precious stones and metals supply chains, will return to work at different times. I am confident that resilient economies, such as that of Dubai, will likely spring back faster.

Companies across our industry will need to return to work with a renewed passion and drive. It is also incumbent on regulators and infrastructure providers to assist the business communities, which is why DMCC launched a Business Support Package last month to aid member companies in these challenging times.

We have collectively faced many challenges in the past, and our resilience and dedication has brought us through them. This same ethos is set to see us through the current unprecedented challenge.

The digital shift taking place across the globe continues to change the way business is conducted across all sectors. Despite the precautionary measures in place, social distancing being an example, the business community can be more connected than ever before if technology is used effectively.

Long-term disruption likely; industry needs to adopt remote work tools

We need to be realistic about how the industry is likely to get back to work, and that means accepting that it most likely will be a gradual and unpredictable process. Until a COVID-19 vaccine is widely available, and that could be 18 months away and more, the coronavirus will not disappear completely. What this means is that intermittent work disruptions are to be expected, and international travel will remain curtailed.

But, within those narrow confines, it will be possible to work, and reach our clients. We will need to use the remote business management tools that are becoming more widely used, and developing innovative means of reaching out to and interacting with our clients and suppliers.

The industry will change, not only out of necessity but also because of the more efficient and effective tools and procedures are being developed and adopted right now. We will not want to relinquish them when this eventually is over.

On a future perspective

1] Given the current global situation When according to you will the Gems and Jewellery Industry start Rising?

Jewelry will not be a priority even after the pandemic eases. I’m hopeful people will start to buy again for the Christmas season. They’ll want to pamper themselves after this horrible year and people will be scared to travel still so I think they’ll purchase jewelry and other luxury goods.

2] According to you which are the TWO Important Factors that will help build businesses and profits again in our industry?

· Jewelers need to adapt to online sales more as people will still be hesitant to venture out.

· They must also find the right product mix in light of the new circumstances. Suppliers will also have to either extend payment terms and/or credit lines while manufacturers and retailers get back on their feet.

On the activities that the gem and jewellery sector should focus on

1] Given the current global situation When according to you will the Gems and Jewellery Industry start Rising?

This is a tough question to answer if we consider that the Covid19 is still something new for the scientific/health community. What I can already say is that several sectors (including jewelry and gems) will suffer a recession, the question is how big it will be.

It is useless for a country to recover completely from Covid19 if the rest of the world is not yet fully recovered, because to do business it needs a seller and a buyer. If the buyer has to lay off employees, cut expenses, close factories, etc. during this time, naturally he/she will not make a profit which will significantly reduce his/her future purchases and orders.

What the industry needs to understand is that 2020 will be a challenging year for everyone, and that some small and medium-sized companies may not survive. What Mubri has already done is to launch a strategy where large companies make temporary alliances with medium-sized companies to recover faster in the post-crisis period.

I think the recovery in our industry, assuming that life will return to normal in July 2020, will occur in mid-2021.

2] According to you which are the TWO Important Factors that will help build businesses and profits again in our industry?

I think that before talking about the factor, it is important that the industry understands that nothing will be the same as before, from the way of communicating and relating with customers to the way of exhibiting at the Jewelry Show.

Online sales will increasingly be stronger, and the company that does not adapt to this will naturally become obsolete.

The Jewelry Shows and Diamond Weeks will and should become more technological to attract customers. Having only beautiful Booths and a new Jewelry collection will no longer be enough for a customer to take the plane and visit the Show.

The main factor for a company to recover its will be that invest more in the technology team, social networks and customer relationship.

The company will need to create a virtual channel with all of its customers, and understand that this will be its main communication channel. The client will no longer go to your office.

You will have to tell the story of your brand / company and the news in a more virtual way, but when I speak virtual it is not sending email with the price of gem. Actually it’s create a channel ( via YouTube, Facebook or Instagram ) to speak briefly about yourself, your production, what is different about your pieces, what is the purpose of your brand, etc...

In the dark times that we are going through, more and more the customer will be seduced by emotion and not just by price. And this is also for gems, one thing I suggest for gem companies is to have their gemology professionals give workshops to their clients on platforms like Zoom with the stones on which your company sells. I have realized that many gem companies are afraid to interact and educate their customers because they believe that will lose the client if they teach about gems. This is a misconception because teaching your client will give a positive image to your him/her to trust you. It’s time for you engage in the relationship with your customer.

And for you who are the leader of a company, organization, confederation, council, etc ... it is the time to connect your members and encourage collaboration with each other. I see a moment that, although difficult, will come to a new look at our industry with new opportunities and new systems when doing future business.

Ernie Blom on the COVID 19 situation in the diamond trade and
on the future of the Gem and Jewellery sector post Corona

On Covid 19
"The industry is going through one of the toughest periods in living memory. The world we live in has never faced such a situation as this; it's akin to another world war. These are very difficult times and all we can do is look after ourselves and stay safe, and listen to what the authorities say in order to keep healthy.

On Banks
As far as what that industry is going to do to keep going, fortunately the banks and other organisations such as the producers are very understanding and see the enormity of it. The banks are also helping clients regarding their financing facilities.

On Diamond Producers
The producers, such as De Beers and Alrosa, are holding back on production and many mines are on a care and maintenance footing which is a good thing. So I think we are all hanging in there together and hopefully we will all come out the other side together.

Message
As far as my message to my members, the most important I think is to stay safe, healthy and apart. We know that the US is going through a huge crisis and in South Africa where I live we are in lockdown. India has closed its polishing centers and is in lockdown. We just have to bear the brunt. Hopefully the recovery will start sooner rather than later, and then we can start business again. The WFDB understands and sympathises with every one of you and we will be there for you.

Industry forecast in the near future - Post COVID 19?

Incredibly difficult to answer. As we all, around the globe, are experiencing the horrors of Covid-19 - so are we all learning how best to address the current environment for the sake of all of our health and well being. Different parts of the world, including our industry, will be back to work at different times. In the United States, especially the New York area,

we are taking the stay at home orders extremely seriously and that stay at home order has been extended a number of times already. Until that is lifted here and in other places around the world, it's very difficult to know.

The glimmer of hope is that China seems to be getting back to business. I can't wait for the rest of us to follow suit.

What are the steps that industry players will have to take in restarting operations and building up profitability again? This is only one man's opinion. Our industry players will have to begin promoting our product to the consumer, like we have never promoted it before!

Message to the industry

My message to the industry is to Stay Safe and HEALTHY and keep the faith! We will all need to work together once we are back in business. We will be back, and this time more united and stronger than ever!

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Industry Forecast post COVID 19

The world is facing an unforeseen crisis-a health crisis from the coronavirus pandemic that has triggered a follow-on economic crisis. Most analysts are predicting that the world will be going into a recession in 2020, with at least 1 year for a recovery. This will surely affect the Gems and Jewellery Industry as we are dependent on consumer disposable income and our resilience will be tested.

With the current global lockdowns, the primary focus of most in the industry is managing their cash flows and ensuring the survival of their respective businesses, including the well-being of their people.

We see that, from mining to retail, the virus represents both a supply chain shock (disruption as people cannot work) and a demand shock (income plunge, economic uncertainty, business and families are in survival modus).

We see that the retail gems and jewellery industry will start to start to stabilize only toward the Q3/Q4 of the year, and the season is likely to be quite subdued. If governments take timely action and provide bailout packages to their respective countries, we should be able to see growth by Q1/Q2 of 2021, with real positivity in the market only by the 2021 holiday season.

The RJC has been reaching out and actively engaging with members on transitioning measures in these challenging times. Now more than ever, we are prioritising collaboration, partnerships and conscious engagement with our members to support business continuity in their RJC journey. We have set up a dedicated webpage https://www.responsiblejewellery.com/news/covid-19/ where members and key stakeholders can find the latest update.

On Recovery and Profitability:

First, like any industry, our industry recovery will need support of bold and timely economic policies from governments around the world to mitigate the economic damage and help build confidence in the economy and focus on recovery. These measures are essential to protect people livelihoods. Governments and business will need to work more closely together to tackle this crisis. Time is of the essence.

Second, our industry needs to unite more than ever to focus on long term sustainability and consumer confidence. Ultimately, we work in an industry of beauty and emotions. I strongly believe we have a great opportunity to engage with our consumers in these unprecedented times. Consumer behaviour will evolve through the experience of this pandemic and we, as an industry, will need to adapt fast to understand and exceed the consumers expectation. The jewellery industry is a trust-based industry and it is all about relationships. We should not forget that at the heart of the supply chain are thousands of family businesses. We need to focus on the connection with our customers and enhance trust through sound responsible business practices. The consumer has a choice and expects integrity more than ever.

Ultimately, what we as the leading standards organization stand for, and stand up for, is integrity: through our supply chains, in our work with stakeholders, and of our membership. In doing so, we are rebuilding trust in the global jewellery industry and underpinning its future, so people continue to hold jewellery close to their hearts for centuries to come.

On future of the Gem and Jewellery sector post Corona:

This global pandemic, has really wreaked the global economy. The catch word now is to survive, to stay afloat till the nightmare subsides. Its a real pity precious metal jewellery (PMJ), unlike essential goods and services at this most unfortunate time, has completely lost its sheen and demand. PMJ products, as we all know, is more an aspirational product. During good times when the purchasing power is with the consumers, the purchase is for not only adornment but also purchased as gift. So until and unless the pandemic is over and done with, meaning a holistic cure found with easily available medicines, PMJ industry will be in for a long haul with tough times ahead.

Two Important Factors that will help profitability:

PMJ, if you were to separate into gem-set jewelry (GSJ) and plain gold jewellery (PGJ), PGJ will be easier and more sustainable in these trying times. Due to traditional and cultural practices, PGJ is not really a luxury jewellery. When traditional and cultural practices require the purchase and usage, this segment of the market will help in somewhere to support this segment. Gem Set Jewellery on the other hand, tends to be higher in value and cater more towards the affluent society. For all practical reasons, it is simply not a necessity and demand is close to zero. Unlike Plain Gold Jewellery, its also more sophisticated and appeal only to a smaller and niche segment of consumers. It will need tremendous effort for the relevant players to educate the masses, to create and enhance the demand to revive this Gem Set Jewellery segment once the pandemic is done with. Its a long road ahead.

Hong Kong, the world's most liked distribution center for Gem Set Jewelleryhas recorded a drop of more than 75% in retail sales. This is the worst affected retail sector, as compared to others.