Young generations push record diamond demand butrequire new approaches by industry

The worldwide demand for diamond jewellery set a new record high of $82-billion in 2017, diamond giant De Beers reported in its ‘Diamond Insight Report 2018’.

The driving forces behind this demand were Millennial and Generation Z (Gen Z) consumers, who, together, accounted for 66% of global diamond sales last year. ‘Millennials’ refers to peoplewho are currently in the age range 21 to 39, and ‘Gen Z’ covers those who are aged20 or younger.

Millennials represent 29%of the world’s population but, in 2017, were responsible for 60% of diamond jewellery demand in the US and almost 80% in China. Gen Z accounts for 35% of global population, but, while most of them are children and in no position to buy jewellery, the oldest members of this group (18to 20) are beginningto make an impact on the market. Gen Z consumers bought 5% of all diamond jewellery sold in the US last year.

“The younger generations present wide-ranging opportunities for the diamond industry, [given] the significant size and purchasing power of today’s Millennials and tomorrow’s Gen Z consumers,” pointed out De Beers CEO Bruce Cleaver. “While both of these [groupings] 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.”

While the two generations have similarities, they also have their differences. Major similarities are that they are both “digital natives” (in the words of the report), concerned about social issues, seeking authenticity and wishing to express themselves. Major differences are that Millennials are generally more mistrustful, “requiring brands to earntheir trust before they can pursue growth”, whereasGen Z consumers “tend to be more individualistic and optimistic, desiring products that help build their own personal brands”. This combination of factors creates three significant opportunities, the report states.

The first is “[m]eeting Millennial and Gen Z needs for love and commitment on their own terms”, states the report. “Romantic love remainsthe key driver globally for diamond jewellery sales,with both Millennials andGen Z holding strong aspirations to be in committed relationships . . . [But w]hen 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 . . . Diamond brands and retailers must therefore complement traditional designs with more niche, customisable offerings to reflect the broader interpretation of love and commitment of young consumers.”

The second is to tailor commercial communications, messaging and media to fit the preferences and behaviour of both these young generations. They are “always on” in terms of digital connectivity and have an ‘I want what I want when I want it’ attitude, made possible by online shopping. Consequently, for both,online and social media research is very important before making a purchase. In the US, 60% of Millennial and Gen Z women (aged 18 to 39) do online research before buying diamond jewellery, while, in China, nearly 98% of Millennial and Gen Z customers (aged 19 to 29) do such online research. But the generations favour different social media channels – Facebook, Pinterest andTwitter for the Millennials, as opposed to Instagram and Snapchat for Gen Z.

The third is that company and brand activities and corporate social responsibility activities should be aligned with the priorities of the two generations. Gen Z consumers do not want to be told what a company or brand does in terms of social responsibility; they want to be shown what it does – they want a business to be able to back up its claims of ethical behaviour. This increases the importance of blockchain and other digital asset tracking technologies.

“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,” affirmed Cleaver.