According to the De Beers Group's Diamond Insight Report 2016, consumers aged between 15 and 34 spent more than US$25 billion (AU$33 b) on diamond jewellery across the four largest international markets – the US, China, India and Japan – in 2015.
Statistics revealed in the report also showed this generation to be the largest consumer market for diamond jewellery.
Millennials across the four largest markets accounted for 73 per cent of international demand with more than 220 million potential consumers, making them also the largest age group in terms of numbers, according to the annual study.
There may be reason for optimism among jewellery retailers as Millennials have not yet reached their maximum earning potential, De Beers CEO Bruce Cleaver explained.
“Millennials are already expressing very strong demand for diamond jewellery in the major consumer markets, acquiring more than any other generation,” Cleaver said.
“Most encouragingly, however, Millennials are still 10 years away from their most affluent life stage and the generation comprises more than 220 million potential diamond consumers in the four main markets.”
The Diamond Producers Association (DPA), which was set up in 2015 with the goal of developing and promoting the international diamond industry, chose to target Millennials for its debut marketing campaign, titled Real is Rare. The platform, announced in June, was the industry’s only diamond category-specific initiative for several years.
Deborah Marquardt, chief marketing officer of the DPA, told Jeweller the organisation was encouraged by the findings of the De Beers report that showed Millennials accounted for 45 per cent of new diamond jewellery sales across the top four international markets and indicated a continued strong desire for diamonds when they reached financial maturity.
“There is no doubt that as such a large population, Millennials are driving global consumer demand, and will continue to do so,” Marquardt commented.
“What’s important is that the industry creates opportunities to engage them and find new ways to illustrate emotional relevance about diamonds as symbols of authentic connection and commitment.”
Taking advantage
Cleaver called on the diamond industry to innovate and invest across the value chain in order to capitalise on this “major opportunity on the horizon”.
The study sought to dispel “myths” about the relationship between Millennials and diamonds and stated some industry analysts and media have claimed the age group was “losing touch” with the stones.
It was noted Millennials in the US placed diamonds in the top four when asked to rank their most desired high value gifts and this cohort’s share of diamond demand in volume and value had remained stable since the 1990s.
“Millennials share many of the same views and attitudes to life, love, marriage and family, and lifetime values as older generations, but these manifest themselves later in their lives, as they reach financial maturity later,” the report read.
Marquardt said that while generalising about a group of such a size was tricky, the statistics and behaviours showed that interest in diamonds was strong, adding it was critical to cultivate “an authentic narrative around diamonds that continues to resonate with them, and remains relevant and valorised in their lives”.
Increasing self-purchase trend
Another trend identified among Millennials was the increasing number of consumers within the demographic buying diamond jewellery for themselves.
In the US, self-purchasing represented 31 per cent of all non-bridal diamond jewellery pieces acquired in 2015.
“While the bridal category has provided stability in markets where there is an established and growing diamond engagement ring tradition, non-bridal acquisition delivers the greatest growth opportunity for Millennials,” the report stated.
Marquardt suggested jewellery retailers no longer needed to align purchases with “prescribed social rituals” when selling to Millennials.
“They welcome the association of diamonds with occasions they themselves define as meaningful rather than just the traditional moments for which diamonds have always been purchased,” she explained.
“This open-mindedness creates tremendous opportunity for retailers who offer a selection of on-trend diamond jewellery at various price points.”
Self-purchasing of jewellery by women was also identified as a future opportunity.
“Having a selection of diamond jewellery, which appeals to the woman looking to celebrate a personal milestone, or to buy something special to reward herself, should become as much a focus for jewellers as bridal and other relationship milestone-related jewellery,” the report advised.
Other insights from the publication included that fact that overall consumer demand for diamond jewellery fell slightly to US$79 billion (AU$103 b) in 2015 compared to US$80 billion (AU$113.9 b) in 2014, while demand for rough diamonds was also down.
The inaugural Diamond Insight Report was published in 2014 and it is typically launched at the Hong Kong Gem & Jewellery Fair in September. The report is based on De Beers’ data and insight as well as other industry sources.
The report can be accessed via www.debeersgroup.com.
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