Why Diamond Rings Cost So Much

Wedding, Wedding Ring, Wedding Rings, Love, Marriage

If you are a young, unmarried man reading this right now, there’s a good chance you’ll sink thousands into a diamond ring.

It’s total BS. Here is why.

In the late 1870s, the first major diamond mines were being excavated in South Africa.

The different owners of these mines suddenly had a self-created problem: they had too much of this stuff. Ton after ton of diamonds was flowing out of these holes in the ground.

This wasn’t pure luck, because diamonds aren’t actually rare. Scientists believe a quadrillion tons of diamonds are inside the Earth.

The mine owners realized they would end up in a price war with each other if they didn’t somehow stop it. So they merged together to form a diamond conglomerate called De Beers. But it was more like a cartel that controlled the world’s supply of diamonds.

In the early 1900s, De Beers’ strategy of scarcity was mostly paying off. Among wealthy patrons, diamonds sold well and were an effective way to flex wealth and status.

Source: American Gem Society

But at a macro level, diamonds didn’t sell anywhere close to the way they do today.

And they certainly weren’t popular at weddings.

How Diamonds Became a Woman’s Best Friend

The diamond business was crumbling in the 1930s. The world was on fire. The economic shockwave of the Great Depression had just rolled through the country. The second world war was heating up.

In turn, diamond sales, like most luxury goods, were hitting new lows. De Beers’ entire business model was in jeopardy if they didn’t do something drastic.

Advertising had become a much more powerful medium. Companies realized they could shape the minds of consumers far more than they’d previously realized. De Beers hired famed ad agency, N.W. Ayer.

This decision would revolutionize our society’s relationship with diamonds.

So how do you sell diamonds when the world is on fire? Simple. You pair diamonds up to powerful, aspirational emotions.

In 1938, weddings rarely involved diamonds. Even when they did involve jewelry, the agency’s research showed that most women preferred that their husbands spend money on something they could actually use.

N.W. Ayer hired a copywriter, Frances Gerety, who would write all the diamond commercials for decades to come. She’d been explicitly told that the number one goal was to create a situation where all couples in America felt obliged to get a diamond ring for their wedding.

She strategically bridged the idea of a diamond’s long life to the aspirational aspects of love. She released her first “a diamond is forever” campaign.

The original diamond is forever campaign. (Source: De Beers Group)

She then drove home the symbolism of the ring as a mark of a woman being spoken for.

This was particularly relevant because so many young men were deploying to war and were eager to secure a partner back at the home front.

One campaign showed images of fiancées waiting for their men to return.

“Of absence and fond hearts.” (Source: pic via Doc Player)

It included lines like, “For each man’s ring is a personal, masculine reassurance — that time, space, and circumstance — shall not change his devotion.”

These ads milked it hard. They used lots of power words like “forever”, “eternal like a diamond”, “absolute certainty”, and “promise.”

Source: vintage news

“Happily she dreams upon the promise she is given… she is engaged and on her finger, her engagement diamond tells the joys and hopes two hearts now share.”

N.W. Ayer found a weak spot in the hearts and minds of consumers and shot a cannonball through it.

This one is pretty easy to read (double-tap the image to zoom). Watch her work it. She knew exactly what she was doing.

Source: pic via Rubel Minasche

Their campaigns were remarkably effective. Diamond sales went up by double within two years. They then doubled again several times each year after that.

By 1951, 80% of brides in America received a diamond engagement ring. Twenty years prior, it was less than 20%.

Years later, still not satisfied with 80%, De Beers realized the appeal of diamond rings wasn’t generating revenue with lower income brackets. Those consumers saw the rings as outside of their reach.

De Beers expanded their cheaper selection and did a dirty, albeit brilliant marketing tactic:

Source: pic via Quartz

They set an arbitrary spend of two months’ salary for an engagement ring.

And even today, that line has sticking power, with many people saying three months’ salary. De Beers leveraged the male impulse to sacrifice resources as a show of force for their love.

Taking a Step Back

Diamonds have no intrinsic value.

Sure, there’s craftsmanship involved. But you can have that with anything.

A diamond’s value is completely driven by marketing. And we all bought into it. Your diamond loses a ton of value the moment after you buy it. If you are a man in America, there’s a 50% chance your diamond will lose all of its value (divorce).

But we should give credit where credit is due.

We’ll put aside the shady behind-the-scenes business of blood diamonds (which could be a separate essay). We’ll forget the cartel-like practices of De Beers.

At the end of the day, this mining company took a common mineral, gave it false scarcity, and hired a great copywriter to dress it up in heavy emotional language.

In turn, young people have diamond fever. De Beers literally wedged their product as a must in every wedding. Today, they make billions in annual revenue as a result.

You’ll have to look far and wide to find marketing campaigns that created so much value with a product that had none.

And as my parting advice, don’t spend too much money on your wedding ring. Maybe just upgrade it at the ten-year mark after you prove the two of you can live together.

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