Giving gold for iron
In a world of lab-grown diamonds, how will jewellery brands create hypervaluation?
There are some interesting moments in history that don’t get talked about nearly enough. Moments when, as a result of a sudden change in cultural values, hypervaluation happens right in front of our eyes.
In 1813, Prussia was at war against Napoleonic France.
To fund this expensive war, the Prussian Royal Family came up with an interesting concept: they issued steel jewellery that citizens in Berlin could exchange for their gold jewellery. On this steel jewellery was marked the sentence “Gold gab Ich für Eisen”—I gave gold for iron—a clear signal of the wearer’s patriotism.
This phenomenon has been repeated a number of times throughout history. In World War I, when Germany started running out of gold to pay for cannons, they issued rings with the same line for people to swap their golden wedding rings.
The function of jewellery has always been that of a 𝘀𝗶𝗴𝗻𝗮𝗹. In a way, it almost doesn’t matter what materials you make it from, as long as the right signal is being emitted. For example, when M and I got engaged, I offered her a rubelite ring, and she cut off a few hairs and wrapped them around my ring finger.
The signal is the thing. Usually we don’t notice this so much, because the signal stays constant. It’s just part of the matrix of value, as invisible to consumers as water is to a fish. But just as some fish are quite sensitive to changes in density of the water, so it is through sudden changes in our value matrix that we realise there was a signal at all.
Which means that, when lab-grown diamonds become commonplace, the difference between a low-priced diamond necklace and a high-priced diamond necklace will likely have nothing to do with the diamonds themselves, and everything to do with signals.
This de-coupling from any notion of “intrinsic value” is not that unusual. After all, you’re not paying 100 million for a Picasso because of the price of the raw materials.
This is one of the reasons I never liked the name the lab-grown diamonds industry gave to their product: “lab-grown” is quite alien to the signals people like to emit when they wear jewellery.
What’s more, the sector’s opponents immediately have the mental hooks they need to oppose its endorsement: “Lab-grown diamonds are artificial. Lab-grown diamonds are fake copies of the natural diamonds we work so hard to mine.” Immediately, an opposition is created in the consumer’s mind between “real” vs. “man-made”.
Which is a shame, because luxury consumers tend to appreciate man-made products just fine, as long as they’re framed around the concept of craftsmanship and precision, rather than “labs” which frame the concept of artificiality in the same way as artificial ingredients in our food.
Notice how we appreciate “cultured” pearls rather than natural ones, for example.
So, taking our cue from the cultured pearls industry, “cultured diamonds”—the phrasing, the concept, everything—was right there for the taking. It still is, of course, if you’re feeling brave...
More broadly, you could say that today’s humans are signalling animals who often pretend that their signals are not signals. Another way of putting it is that we’re essentialists who pretend to be materialists. Somewhere on Earth, there is a human who bought the Omega Speedmaster watch Neil Armstrong wore on the moon at a far greater price than all the other Omega Speedmaster watches, despite looking exactly the same as all the others. And, as long as this is the case, I will disagree with anyone who claims that Western society is materialistic: a materialist would never do that.
Often, when I discuss these subjects with clients, I end up returning to the same conclusion: all value is subjective.
One book that never makes it on any Marketing MBA’s reading list is Ludwig von Mises’s “Human Action”. It’s not strictly speaking a marketing book, but it is almost entirely dedicated to the subjectivity of value. And, I’d argue, it should not only be compulsory reading for marketers, but even more so for designers: one way you can tell if someone is a really thoughtful designer, is if you hear them re-framing the current product’s subjective attributes before putting pen to paper. Sometimes, all you need is to re-frame the perceived negative attributes in order to create new value.
PS: speaking of compulsory reading,
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