 Key points
• Understanding the consumer preferences of Gen Z is essential to the survival of the diamond and jewellery retail industries • Selling diamond jewellery to Gen Z – whether natural or lab-grown – must emphasise sustainability benefits and authenticity • Gen Z are financially aware and therefore less likely to exceed their budget or purchase on credit |
Gen Z is coming to our markets very soon – if it has not already arrived, in reality. Its members are forecast to spend a whopping $US143 billion on consumer goods this year alone. So we had better get them on our side if we want to enjoy a rosy future.
In fact, the future success of the jewellery industry will depend on our understanding their needs and wants. Get this right and we can all look forward to strong profitable years. Get it wrong and we could be destined for the scrap heap – not overnight maybe, but ultimately.
So, what do we really understand about today’s 15–25-year-olds?
Here are some facts to enhance your understanding into the ways they think, what they do, what they want and much more. I can’t pretend to cover all the aspects of this new generation, but my intention here is to open your minds to the opportunities that lie ahead.
Intertwined with social media
Gen Z loves Instagram, WeChat, WhatsApp and many more applications. They allow its members to talk to a global community, like no generation has done before. They compare products, experiences and opinions continuously.
On Instagram alone, users publish over 95 million posts on a daily basis, and its users click more than 4.2 billion ‘likes’. Just imagine the scale of this opportunity if your new product meets their aspirations and desires.
Your audience and potential client base can literally escalate in minutes.
Let’s take the travel industry as an example of a business sector where the impact has been fast, occasionally furious, and sometimes devastating.
Businesses that have been unable to adapt, find themselves being left behind in a very short period of time.
Gen Z is the most well-travelled group in history, with a real passion for seeing the world. Most of their trips are social media-inspired; which means marketing to them has to prioritise social media over old style media, such as travel magazines.
Research suggests that more than 80 per cent of trips are influenced by social media, with the sharing of images, links relating to accommodation, landmarks and more having a major effect on holiday choices.
Gen Z books late, usually fewer than three months before actually going away. For marketers, consequently, it’s important to note how offers are pitched. Late deals, room upgrades, bonus tours and such are likely to win over these Gen Z travellers.
They are often looking for adventure, or so say one in every three Gen Zs. They seek local experiences; authenticity and they love unique things.
So, what can we in the jewellery industry learn from this? Probably the single most important point is the power of the internet and how we have to use it to communicate to our customers in a relevant and modern way.
If we don’t focus on social media, we simply won’t have a future.
Business and career aspirations
Gen Z really wants to change the world. Around 40 per cent would like to become entrepreneurs, and about half of these say they want to “invent something that is revolutionary”.
We all know starting businesses is difficult, so there’s an opportunity to support budding young entrepreneurs. Industries and companies should consider providing social entrepreneurship programs, which could include mentorships, networking, community and technical support.
Such ideas would certainly better influence Gen Z’s perception of any business or brand.
The jewellery industry has a good record for supporting new designers and craftspeople, having hosted competitions and sponsorship programs for many years and giving them valuable experiences that help them launch their own businesses one day. However, there is always far more we could do and it’s clear that these budding entrepreneurs would warm to even more of these activities.
We need to encourage younger people to excel and, in so doing, bring into our ranks the new talent that is vital to a vibrant future.
Deep concerns for the environment
The environment – and in particular climate change – is pegged as Gen Z’s leading issue of concern.
Shopping for second-hand goods makes a lot of sense for these sustainability-minded, financially-savvy consumers. One in three members expect to buy second-hand clothes, shoes or accessories, which is an increase of 46 per cent from the number reported in 2017. They are buying and selling second-hand items on sites such as Poshmark, Depop, and StockX.
Demand for second-hand products, driven by Gen Z, is expected to push the resale sector to $US51 billion by 2023. So, what is the appeal of second-hand?
The answer is simple: it’s considered a sustainable way to keep up with trends. Climate change looms in their minds and they want products that reduce environmental impact.
Almost 70 per cent of this generation considers sustainability to be an important factor in making a purchase. Eco-friendly products and brands are booming, and second-hand goods make sense, because it involves reusing a product that otherwise may have been discarded.
Using less ‘stuff’ is preferable to recycling because it consumes far fewer resources. It is estimated that we would save 2.6 billion kg of carbon emissions, 95 billion gallons of water and 204 million kg of waste if everyone bought one used item instead of an equivalent new product this year.
Gen Z’s understanding of these facts means that the resale market will continue to surge.
As an industry, we sit in a really positive place for reusing. But we need to market this aspect of our offering in a new way, so this generation will buy our products enthusiastically.
Reusing should be a strong part of a jeweller’s offering, feeding into that desire to find ways of saving the planet. We should be reworking old jewellery to produce the most exquisite new pieces.
This is no longer about cheap-looking second-hand pawnshops. This is about a proud new marketing message from leading jewellers, stating that many of their fabulously designed new products incorporate second-hand elements.
Additionally, sustainability is at the heart of diamond businesses such as De Beers, where there is a very strong belief that it is a requirement for a prosperous long-term future.
Businesses across the diamond supply chain should emphasise these credentials to appeal to Gen Z’s concern for the environment and the future.
Social impact is very important to members of Gen Z. They expect businesses to do good things and support those in need in the local community. You must walk the talk and support the issues people care about, with climate change being at the top.
Gen Z craves environmentally friendly products; some 82 per cent of its members are more likely to buy a product with good environmental credentials.
What’s more, Nielsen research shows that 77 per cent are prepared to pay more for environmentally friendly products. Almost one-third of Gen Zs have boycotted a company they perceive as guilty of unsustainable practices.
They want to know who handled the product and how it was made, meaning the diamond pipeline to the market must be transparent.
Authenticity is big
There’s a real interest in dressing retro and with authenticity. Authenticity is considered cool by about two-thirds of Gen Z. So the jewellery industry should keep authenticity at the heart of its product offering.
Retailers and businesses should consider collaborating with vintage brands to create retro products with a contemporary spin, and be sure to tell an authentic story. Or, they should seek bona fide vintage jewellery designs, and offer them at stores alongside new merchandise.
The natural diamond is and will continue to be a symbol of love – that most authentic of emotions – to this group. Love is a universal concept as strong today as ever in history, and humans demand love as much as needing to give it.
The inherent attributes of natural diamonds – their uniqueness, authenticity, rarity, and value make them a perfect gift of love, and more than half of all diamonds sold today are given to express love and commitment.
Gender aware and gender neutral
Gen Z is probably the most gender-aware and gender-diverse population in human history.
A study by the US Pew Research Centre conducted this year found that about 35 per cent of Gen Z individuals polled said that they know someone who prefers that others use gender-neutral pronouns when referring to them.
The digital world has opened its eyes to differing points of view, attitudes and cultures. There is no ‘ideal’ to aspire to – not for hairstyles, dressing, jewellery or anything. Members of Gen Z don’t want to be classified. They want to be fluid: one thing today, and tomorrow, maybe, something different.
Gender-neutral products, campaigns, and spokespeople are becoming commonplace. MAC and NYX cosmetics, for example, now incorporate males in their advertising.
Members of Gen Z celebrate diversity, and are suspicious of representations of human perfection, which they consider artificial and inauthentic.
Marketing should appeal to people across the gender spectrum. Brands like Fluide cosmetics were inspired by the activism of Gen Z with regards to LGBTQ+ and gender identity issues. Gender-neutral clothing is also on the rise, with H&M, Skechers, and ASOS all acknowledging there is no single idea of fashion.
The jewellery industry needs to adapt – take a step back from pieces ‘for men’ or ‘for women’.
Who will be the first to design a perfect gender-neutral ring or necklace, which will be the iconic piece of the 2020s?
There is huge potential in this category to create diamond jewellery for everyone; the jewellery industry needs global iconic pieces for her, him and them, representing the gender-neutral world we now live in.
Celebrating diversity and imperfection
We need to embrace authenticity and inclusivity through our marketing, including the models that we employ. We all need to update our marketing thinking and collateral.
Gen Z celebrates individuality and wants to engage in visual media as varied and diverse as the modern world; six out of 10 of its members say that they like seeing ads that show diverse families.
They want to see people who look like them and their friends and want to see advertising that features real people in real situations.
Therefore, jewellery advertising should celebrate diversity in all its forms: use models of different sizes, of different colours, with different physical features, different ages and wearing different clothes. The more you reflect the melting pot of life, the better.
And the models do not need to be perfect. Indeed, perfection is considered to be artificial.
‘Friendly’ brand names and personae
More and more companies are using human-sounding brand names to appeal to Gen Z.
Ollie is a fresh dog food delivery company, Billie a personal care brand, and Casper a sleeping product brand. These sound more like friends than most classic brands.
Gen Z has little interest in the aspirational marketing of the past, rather preferring brands that are authentic, relatable and have a purpose. Its members seem to like brands that reflect their own personality.
In advertising, they want to see real life, and on social media they often prefer ‘normal’ rather than ‘famous’. Brands need to stand for something; their intentions must be real. Given these factors, word-of-mouth is important – and reviews even more so.
Gen Z likes recommendations from people they trust, especially friends. Some luxury brands are using pop-up stores to build brand familiarity and increase word-of-mouth marketing opportunities. Experimental retail is also a great tactic, as people will talk about what they’ve seen and experienced.
More than 80 per cent of Gen Z customers read reviews before they purchase products, especially Gen Z women, where some 21 per cent read more than 10 reviews before buying.
So, an opportunity exists here for the jewellery industry, since it’s often entwined with life’s milestones, such as graduation and marriage – times during which people share their experiences with friends, family and followers.
With genuine opinions from the very people with whom your customers identify, you can build trust in your business very quickly.
They are financially savvy
Gen Z loves luxury as much as previous generations, but they are wary of buying on credit, having seen the disastrous impact this had on their parents.
So, don’t think that offering financing deals is the answer to boosting sales. They are more likely to save for their next piece of jewellery rather than buying on credit.
Gen Z is prepared to splurge but they must see the purchase as worthwhile. The more added value the better, and that can come from its environmental credentials or its social value.
They understand money more than those before them thanks to the Global Financial Crisis of 2008. Businesses need to take this economic literacy seriously, to be trusted and build long-term relationships, particularly as the members of Gen Z mature and gain more spending power.
For retailers to appeal to financially savvy Gen Z, they need to focus on ensuring that their diamond jewellery has a broad range of price points.
They may also make more use of second-hand stones in their designs, or focus on designs where smaller diamonds are used in such a way as to give an impression of being larger.
AND FINALLY…
If you really want to keep up with this ever-changing world it might be best to have a 20 year old as a ‘Gen Z mentor’. In today’s disruptive environment, turning mentoring upside down might be the one way to keep your finger on the market’s pulse.
Social media is now the heart of marketing, and the whole industry needs to wake up to this fact. Retailers need to work harder than ever to be seen and heard. One suggestion is to employ students on a part-time basis to devise and deliver your brands, products and promises in the digital world. We all need to move on mentally when it comes to marketing today and in the future.
And for the umpteenth time, do not discount the impact of climate change. It is quite rightly Gen Z’s greatest concern. It is also an area where CIBJO can help, as we have since 2011 when we launched our Greenhouse Gas Initiative.
In the coming years, we will see a new natural diamond brand concept developing; one that is environmentally and personally friendly and familiar, diverse, open, and relaxed. ‘Charlie’, as an example, is a great name for a diamond jewellery brand.
These new brands will have friendly characteristics, be very approachable, and far less stiff and stereotypical.
Watch this space.
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