28 Apr In the diamond industry, blockchain is forever
Today, the jewelry industry has a big problem. Counterfeits cost millions of dollars, harm consumers and negatively impact the industry’s reputation. IBM and an industry consortium intend to solve part of the problem with blockchain technology.
Diamonds are forever campaign origin
You might be surprised to learn the diamond industry’s image building campaign originated 80 years ago in 1938 when Harry Oppenheimer, the De Beers founder’s son, recruited New York ad agency NW Ayer to polish the industry’s US image.
The price of diamonds was falling in the 1930s and making diamonds as a symbol of engagement and everlasting love had not really gained traction with the younger generation.
For nearly two decades, diamonds were promoted throughout modern American culture, using movie stars, fashion designers and radio messages that delivered the idea that diamonds were an important trend you couldn’t miss. Maybe even the first FOMO or fear -of missing out campaign ever?
Tactics in the campaign in the 1940s included:
-fashion designers on radio talk shows
-“Hollywood Personalities,” giving 125 leading newspapers descriptions of the diamonds worn by movie stars in 1946
-a school outreach program with lectures at high schools around the country in 1947 reaching thousands of girls with messaging about diamond engagement rings
-coining the “Diamonds are forever” slogan that De Beers has used ever since the late 1940s.
As a result, De Beers wholesale diamond business in the US grew from just $23 million to $2.1 billion between 1939 and 1979. Ad spending grew from $200,000 to $10 million a year.
TrustChain as an industry solution
Fast-forward to today where the gold and diamond industry has banded together (pun intended) with IBM to use blockchain to “trace the provenance of finished pieces of jewelry across the supply chain for increased transparency,” according to an IBM news release.
The new TrustChainTM Initiative, is powered by the IBM Blockchain Platform and delivered by the IBM Cloud:
“The TrustChain Initiative tracks and authenticates diamonds and precious metals through every stage of the supply chain as it becomes a piece of finished jewelry. It provides digital verification, physical product and process verification, and third-party oversight. The collaboration’s goal is to instill trust in the origin and ethical sourcing of jewelry by bringing together a community of responsible and ethical organizations across the complex and multi-tiered jewelry supply chain.”
IBM is using its blockchain platform to set up a shared, immutable record of transactions; providing permissions and access to data; ensuring confidentiality and security; enabling collaboration by industry participants; and building trust by providing consumers with quality assurance, social and environmental responsibility and verification of authenticity.
TrustChain™ will track the jewelry supply chain from the mines of origin of the diamond and precious metals, through to the refining, polishing, jewelry manufacturing and shipping of the final product to the retail store. TrustChain-backed jewelry is expected to be available to consumers in participating retail stores by the end of 2018.
Key industry participants with IBM include Asahi Refining (precious metals refiner), Helzberg Diamonds (U.S. jewelry retailer), LeachGarner (precious metals supplier), The Richline Group (global jewelry manufacturer) and Underwriters Lab (independent, third-party verification).
The result should be more consumer trust, a stronger reputation for producers and support for the value of their jewelry products now and in the future. The industry has come a long way since the origins of its “Diamonds are forever” ad campaigns and it would be fair to say that blockchain could soon be a girl’s best friend as well.
Visuals courtesy of De Beers & TrustChain Initiative