© Written by Rachael Taylor for Facets
There is a sea change occurring in fine jewellery, and it is one that is not driven by the economy, metal prices or even design trends; it is a generational shift. The Millennials, the generation classed as those born after 1980, are starting to make their presence known, and it is causing one or two problems for the diamond industry.
The reason this new class of consumer is causing so much trouble is that they don’t think like the generations before them. Despite De Beers’ plans to bring back the famous A Diamond is Forever slogan this Christmas, Millennials puts little stock in long-term purchases or investing in family heirlooms. After all, this is a generation fuelled by a volatile financial system, fast fashion and technology that becomes obsolete every six months. The thought of buying something that will last forever just doesn’t click with them.
Despite this disconnect with the pillars of investment and heritage, which have kept jewellers’ tills ringing through the ages, Millennials don’t have an inherent dislike of jewellery, and there are, in fact, many elements of what the jewellery industry has to offer that fit perfectly with their desires as consumers – the ability to offer a bespoke product totally unique to them, for one.
The challenge now is not to completely change the product, but to change the conversation.
One thing Millennials do appreciate is branding, something the jewellery industry knows well thanks to the Pandora effect. They want a brand they can identify with and trust; one that will offer them a lifestyle experience, not just a product.
London Diamond Bourse chief operating officer Victoria McKay recently attended the World Federation of Diamond Bourses’ Presidents’ Meeting in Tel Aviv, where she says Millennials and their lack of engagement with diamonds was a hot topic. “The jewellery industry, especially the diamond industry, has missed a lot of the Millennials who have come of age,” she says. “In that time, what else have they bought? The diamond industry needs to make diamonds more sexy and give them a story other than a diamond is forever.”
To help facilitate this change, a group of the world’s largest diamond miners have clubbed together to create The Diamond Producers Association, a marketing organisation that will work to further the brand of diamonds, operating in a similar way to the Platinum Guild International or World Gold Council, by focusing on promotion of the raw product rather than just the finished goods.
The Diamond Producers Association will be funded by Rio Tinto, De Beers, Alrosa, Dominion Diamond Corporation, Lucara Diamond Corporation, Petra Diamonds and Gem Diamonds, and the group has agreed to a minimum annual budget of US$6 million (£3.85m). The association has been incorporated in London and is currently in the process of recruiting to build a team that will carry out a period of research before releasing and executing a three-year plan focused on driving up consumer demand for diamonds.
BEAUTY OVER THE FOUR Cs
For Stephen Lussier, chief executive of De Beers diamond brand Forevermark, the way to do this is to change the conversation jewellers are having with Millennials about diamonds by relying less heavily on the Four Cs, which have commodotised diamonds for consumers.
“I’ve never seen someone go down the street and be stopped by someone saying: ‘Oh, is that a G VSII?’,” he says. “No, they say, ‘that stone is really beautiful’, and what they are talking about is the fire, the sparkle, the inherent beauty of the diamond. The Four Cs are important, but they are not the answer. I always say that the Four Cs are a bit like choosing a model for an editorial shoot. If you look at the height, the weight, the hair colour and the eye colour, you can’t pick from those four things. It gives you an idea what that model looks like, but it doesn’t give you the whole picture.”
Forevermark has been trading on its branded diamonds for the past five years and is now in 1,600 jewellers in 34 countries. It has sold more than 1 million branded diamonds in that time, which Lussier estimates to equate to about US$750 million (£480m) in retail terms. It is now about to launch in the UK through a partnership with CMJ suppliers HRA Group and H Chalfen, and examples of Forevermark jewellery will be on display in the Spotlight section of the August CMJ trade event, an area dedicated to new products.
As well as only working with what it considers to be the most beautiful diamonds in the world, which it then laser inscribes with branding invisible to the naked eye, the other pillar of its brand is built around ethical sourcing.
This is an area that Lussier believes will become even more important as more of the Millennial generation of consumers raised on Fairtrade bananas and coffee comes of age. “Younger consumers, today’s engagement consumers, are more and more interested in understanding what a diamond has done along the way,” he says. “We want people to be proud of what that diamond has done on the way from the mine to your finger – the communities it has touched, where it is cut and polished. You hear a lot about blood diamonds and the Kimberley Process and that’s a given, but what we’re talking about is proactive, positive contribution, not some minimum standard of responsibility.”
CMJ supplier Arctic Circle has also built a diamond brand around these principles, working only with Fairtrade Gold and ethically sourced Canadian diamonds. It made its first trade appearance in February and sales director Judith Lockwood says that the reaction from retailers has been positive, with every store she has visited so far taking the range on.
Arctic Circle has a consumer-facing branding that uses the tag line It’s cool to care, a youthful slogan that will appeal to Millennials. “I think about Millennials a lot,” says Lockwood, who is preparing to take a trip to Tanzania to see the Fairtrade gold mines at work – Arctic Circle will take stock of the first batch of African Fairtrade gold at the end of this year. “Everything I read, every seminar I go to, every event I went to at JCK, everyone is recognising that this is the next target generation. My experience of that age group is that they are far more focused and planned with decisions they make, which makes them the perfect customer for our engagement rings.”
Lockwood believes that even if the industry stood still and did not engage in offering ethical diamond jewellery, she believes Millennials would still seek it out. Therefore the industry is “missing a trick” by not investing in it now.
One reservation jewellers have about Fairtrade and ethically sourced jewels is the shadow these products could cast on other stock. Lockwood says that focusing on brands of diamonds is a way to avoid this, by presenting an alternative brand rather than an alternative product.
“The potential for the market is enormous, and other companies are starting to sit up and take notice,” she says. “Who’s to say that this isn’t the new branded jewellery experience?”
The crux of cracking the Millennials is indeed branding – a territory that diamonds has had little to do with to date; focusing on creating brand stories that younger consumers can really buy into, driven by the desirability of the products and the transparency of the supply chains. Then maybe the diamond industry can start winning back some of the ground lost to the Apples and Nikes of this world that have been steadily winning the loyalty of Millennials while diamond retailers have been busy targeting their parents.