Young Con­sumers Driv­ing Di­a­mond Jew­ellery De­mand: De Beers

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Move aside Baby Boomers and Gen­er­a­tion X. The Mil­len­ni­als and Gen Z now hold the power to shape the di­a­mond in­dus­try’s fu­ture. And the fu­ture looks bright with more than 60% of global di­a­mond jew­ellery de­mand in 2017 com­ing from the younger gen­er­a­tion (those aged 39 and be­low), ac­cord­ing to De Beers’ lat­est Di­a­mond In­sight Re­port.

The Mil­len­nial and Gen Z gen­er­a­tions com­bined ac­counted for two-thirds of global di­a­mond jew­ellery sales in 2017, as di­a­mond jew­ellery de­mand reached a new record high of $82 bil­lion, ac­cord­ing to the re­port.

Mil­len­ni­als, those peo­ple cur­rently aged 21 to 39, rep­re­sent 29% of the world’s pop­u­la­tion and are the cur­rent largest group of di­a­mond con­sumers. They ac­counted for al­most 60% of di­a­mond jew­ellery de­mand in the US in 2017 and nearly 80% in China.

Gen Z, those cur­rently aged up to 20, is an even larger con­sumer gen­er­a­tion – rep­re­sent­ing 35% of the world’s pop­u­la­tion and will come of age as di­a­mond con­sumers over the com­ing decades. De­spite the gen­er­a­tion

The US was once again the fastest-grow­ing re­gion in terms of con­sumer de­mand. De­mand in­creased in China, while growth in the other main mar­kets de­clined.

be­ing a long way from fi­nan­cial ma­tu­rity, Gen Z is al­ready mak­ing its pres­ence felt in the di­a­mond mar­ket, with the old­est Gen Z con­sumers (those cur­rently aged 18 to 20) ac­quir­ing 5% of all di­a­mond jew­ellery pieces in the US last year.

The re­port high­lights key sim­i­lar­i­ties and dif­fer­ences be­tween Mil­len­ni­als and Gen Z as a re­sult of their life ex­pe­ri­ences that have par­tic­u­lar im­pli­ca­tions for di­a­mond brands and re­tail­ers. For ex­am­ple, Mil­len­ni­als are in gen­eral more mis­trust­ing, re­quir­ing brands to earn their trust be­fore they can pur­sue growth, while Gen Z tend to be more in­di­vid­u­al­is­tic and op­ti­mistic, de­sir­ing prod­ucts that help build their own per­sonal brand.

There are also a num­ber of im­por­tant sim­i­lar­i­ties be­tween the gen­er­a­tions, es­pe­cially with re­gard to valu­ing love, be­ing dig­i­tal na­tives, be­ing en­gaged with so­cial is­sues and de­sir­ing

au­then­tic­ity and self-ex­pres­sion. Con­sid­er­ing these sim­i­lar­i­ties and dif­fer­ences, the 2018 Di­a­mond In­sight Re­port high­lights three key ar­eas of op­por­tu­nity that the two younger gen­er­a­tions present for the di­a­mond in­dus­try.

Op­por­tu­nity 1 - Meet­ing Mil­len­nial and Gen Z needs for love and com­mit­ment on their own terms

Ro­man­tic love re­mains the key driver glob­ally for di­a­mond jew­ellery sales, with both Mil­len­ni­als and Gen Z hold­ing strong as­pi­ra­tions to be in com­mit­ted re­la­tion­ships. How­ever, their at­ti­tudes to­wards how they ex­press and sym­bol­ise their love are evolv­ing. When it comes to love and mar­riage, al­though many Mil­len­ni­als and Gen Z still want to fol­low tra­di­tion, there is an in­creas­ing fo­cus on per­son­alised prod­ucts and re­laxed ex­pe­ri­ences that re­flect their in­di­vid­ual val­ues and pref­er­ences. The bridal mar­ket con­tin­ues to be of cen­tral im­por­tance, rep­re­sent­ing around 27% of di­a­mond jew­ellery de­mand in the main di­a­mond con­sum­ing coun­tries, but di­a­monds given sim­ply as a gift of love or ro­mance (un­re­lated to mar­riage) are also a sig­nif­i­cant share of de­mand from younger con­sumers, rep­re­sent­ing a fur­ther 12% of to­tal de­mand in 2017. Di­a­mond brands and re­tail­ers must there­fore com­ple­ment tra­di­tional designs with more niche, cus­tomis­able of­fer­ings to re­flect the broader in­ter­pre­ta­tion of love and com­mit­ment from young con­sumers.

Op­por­tu­nity 2 – Tailor­ing com­mu­ni­ca­tions, mes­sages and me­dia to the nat­u­ral be­hav­iour and pref­er­ences of Mil­len­ni­als and Gen Z

As dig­i­tal com­mu­ni­ca­tion na­tives, Mil­len­ni­als and Gen Z have an ‘al­ways on’ at­ti­tude that means they live by a motto of ‘I Want What I Want When I

Want It’. On­line shop­ping and so­cial me­dia are as sig­nif­i­cant to these gen­er­a­tions as phys­i­cal re­tail out­lets when it comes to re­search­ing pur­chases. The ma­jor­ity (60%) of US Mil­len­nial and Gen Z women aged 18 to 39 search the in­ter­net prior to pur­chas­ing a di­a­mond to learn about designs, qual­ity, pric­ing and brands, with the younger Mil­len­ni­als and Gen Z be­ing more likely than older Mil­len­ni­als to look on so­cial me­dia for in­spi­ra­tion prior to pur­chase. In China, nearly all (98%) Gen Z and Mil­len­nial con­sumers aged 19 to 29 re­search their pur­chase through one or more chan­nels be­fore buy­ing. As Mil­len­ni­als and Gen Z ex­pe­ri­ence this seam­less ‘phy­gi­tal’ co­ex­is­tence in their ev­ery­day lives, they ex­pect an equally seam­less omni-chan­nel ex­pe­ri­ence when buy­ing prod­ucts. Omni-chan­nel strate­gies that are or­ganic, au­then­tic, hu­mor­ous and use out-of-the-box think­ing res­onate most with these con­sumers. How­ever, re­tail­ers need to un­der­stand the dif­fer­ent chan­nels they favour. Gen Z’s most pop­u­lar so­cial me­dia plat­forms are In­sta­gram and Snapchat, while Face­book, Twit­ter and Pin­ter­est are con­sid­ered older gen­er­a­tions’ me­dia and of rel­a­tively less in­ter­est to Gen Z.

Op­por­tu­nity 3 – Align­ing com­pany and brand pur­poses and so­cial com­mit­ments to Mil­len­nial and Gen Z pri­or­i­ties

Mil­len­ni­als and Gen Z both dis­play strong con­cern for so­cial causes and re­spon­si­bly sourced prod­ucts. This high­lights the op­por­tu­nity for di­a­mond brands and re­tail­ers to be more proac­tive in com­mu­ni­cat­ing the good that di­a­monds do through­out the world, and the con­tri­bu­tion their in­di­vid­ual brands make to im­por­tant so­cial causes. Gen Z find cor­po­rate ‘sto­ry­telling’ in­suf­fi­cient to meet their ex­pec­ta­tions and ex­pect brands to be able to back up their eth­i­cal claims, mov­ing from ‘tell me’ to ‘show me’ when it comes to eth­i­cal sourc­ing, mak­ing tech­nolo­gies such as blockchain that can pro­vide dig­i­tal as­set track­ing more im­por­tant.

Bruce Cleaver, CEO, De Beers Group, said: “The younger gen­er­a­tions present widerang­ing op­por­tu­ni­ties for the di­a­mond in­dus­try with the sig­nif­i­cant size and pur­chas­ing power of to­day’s Mil­len­ni­als and to­mor­row’s Gen Z con­sumers. While both of these gen­er­a­tions de­sire di­a­monds just as much as the gen­er­a­tions that have come be­fore them, there are un­doubt­edly new dy­nam­ics at play: those di­a­monds may now be in dif­fer­ent prod­uct designs, used to sym­bol­ise new ex­pres­sions of love, and re­searched and pur­chased in dif­fer­ent ways to mark dif­fer­ent mo­ments in life.

“Di­a­mond jew­ellery de­mand reached a record global high in 2017; how­ever, with the younger con­sumers’ de­sire for qual­i­ties that di­a­monds can per­fectly em­body – in­clud­ing love, con­nec­tions, au­then­tic­ity, unique­ness and pos­i­tive so­cial im­pact – the most ex­cit­ing times for the di­a­mond in­dus­try are still ahead of us if we can seize the op­por­tu­ni­ties.”

Look­ing ahead

The global out­look for 2018 re­mains favourable in most coun­tries, ow­ing to strong eco­nomic prospects, pos­i­tive con­sumer sen­ti­ment and con­tin­ued mar­ket­ing in­vest­ment from the di­a­mond in­dus­try. Pro­tec­tion­ism poses a po­ten­tial longer-term risk.

US mar­ket ex­pec­ta­tions re­main pos­i­tive, with growth likely to re­main steady. Sta­ble growth is ex­pected in China, ow­ing to con­tin­ued eco­nomic strength and con­sumer con­fi­dence.

In In­dia, ris­ing in­fla­tion, higher in­ter­est rates and a weak­en­ing ru­pee may pose a chal­lenge to con­sumer de­mand. Larger or­gan­ised re­tail­ers are ex­pected to con­tinue to grow share of sales at the ex­pense of smaller in­de­pen­dents. n

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