Some interesting consumer driven shifts in diamond and jewelry purchases
Diamond Industry, Diamonds, Jewelry Retail — Nov 19, 2016
Blue Nile, founded in 1999, a pioneering company in online jewelry market, is soon going to be acquired by an investor group that includes Bain Capital Private Equity and Bow Street LLC. Such developments may be the effects of some interesting consumer driven shifts and diamond and jewelry purchases.
1) The 18–35 demography is marrying later in their lives compared to their previous generation. They are known to be spending lesser in their twenties as compared to their elders because of heavy burden of education debt and falling prey of unattractive job market, an effect of global financial crisis. These factors are overall upsetting diamond market.
2) In addition to this, when they decide to settle down, the bride’s choices in jewelry purchase now aren’t the same as they used to be in case of previous generation. Kieron Hodgson, a commodities and mining analyst at Panmure Gordon & Co, said, “A ring from a big-name diamond retailer where mass-produced, identical rings line displays loses some luster in this context. Some customers are looking for colorful gemstones instead of diamonds.” Vintage and bespoke jewelry are stealing the ground from conventional engagement rings sellers.
3) Casey Sullivan, Founder of Gleem & Co, a jewelry e-consigner startup says, “We are seeing millennials want something that no one else has. They want something they can identify with”. Only to prove this trend, data shows that 28% of the eBay’s engagement market ring is held by antique rings in last three years.
4) There is also growing trend of selling old diamond jewelry to buy new ones after shorter period of usage.
5) Bank of America Merrill Lynch says in its June report that the diamond retail sales will grow only 2% this year, far less than its CAGR of 7% in last five years. While on eBay, ring market has grown 58% in last five years, suggesting online jewelry purchase as a popular option of this generation.
These shifts in consumer preferences may be suggesting that though the entire diamond market is showing signs of stagnation, its online market share is growing. Even De Beers, a global diamond mining giant is offering its online auction platform to third party polished diamond sellers.
From Iowa, a diamonds retailer, Jeff Holland is exiting his family-run 80 year old business. Another old jewelry retailing company, Diamond on the Avenue is shutting its business soon. Holland explains that online purchase has risen on the priority and the younger generation is less keen on buying diamond jewelry to celebrate life moments. Expensive gadgets, experiences, trips are being favored.
The impediments of whole diamond market are shared by online market places as well. But they seem to be dealing with their basic issues smartly. Consumers could not touch or feel a product before buying it online. In an attempt to solve this problem, India’s largest online jewelry retailer of diamonds and gemstone jewelry, CaratLane has found its way through it.
It came up with an app, aided with an innovative 3D mirror. Gurukeerthi, Co-founder, CaratLane says, “The app or the perfect look mirror lets you virtually try on a piece of jewellery, and be confident of buying it. The unique feature of this product is the art of superimposing and giving a realistic view of how the earring will look on a customers’ ear lobe. They will not be able to get this experience even on a real mirror.”
Originally published at betterdiamondinitiative.org on November 19, 2016.