Are Diamonds Forever? How ‘Millennials’ Are Changing the Jewelry Game, Part II
“Millennial” is a tired term, yet it has aptly stuck as a defining label for a generation. Although there may be many theories about various Millennial behaviors, one thing is becoming obvious — this generation perceives a traditional consumer staple very differently than older generations. In Part II of “Are Diamonds Forever? How ‘Millennials’ are Changing the Jewelry Game”, IBM’s Strategy Lab investigates American Millennial behaviors as they affect — of all things — jewelry! The story isn’t as easy as “they spend less,” but instead requires an introspective of individuals’ needs and wants to understand the generations’, and therefore the industry’s, shifting preferences.
Check out Part I of the series here.
Based largely on the insights generated from IBM’s survey powered by Lucid, in addition to first person interviews, we’ve uncovered Eight interesting facts — sure to be interesting to companies and organizations in the jewelry space. And quite frankly, to any retail provider striving to understand how to best to meet Millennials where they live!
1) Millennials show a stronger need to fit in as part of the crowd and culture. Brands should leverage celebrity endorsers to help fulfill this preference.
Millennials show a stronger need to fit in as part of the crowd and culture, as evidenced by their higher rate of being inspired by celebrities in their jewelry purchases (33% compared to 8% of non-millennials).
This sort of insight emboldens brands to work with modern trend setters as Tiffany’s did with Lady Gaga, and Chopard did with Rihanna. Luxury jewelry brands are learning how to target this younger market, and with the success of these types of examples, it should encourage firms across industries to do the same!
2) Digital, namely social media, are critical to the inspiration, awareness, and research phases of the Millennial jewelry purchase.
Millennials find jewelry inspiration on the web — whether on social media channels or provocative ads, targeted to their demographic, that resonate. Interestingly, the survey shows that they did not show a higher propensity to want to purchase online; Of those surveyed,both Millennials and non-Millennials showed 20% preferred buying online. Millenials do however show higher rates of finding jewelry inspiration on social media at 66% as compared to 25% for older generations.
Beyond celebrities, brands should utilize digital influencers, or those with the ability to create an effect, change opinions and behaviors, and drive measurable outcomes online, prevalent on social media. 92% of consumers trust an influencer more than an advertisement or traditional celebrity endorsement.
To capture the attention of Influencers, channels like Musefind, allows retailers to match, connect and collaborate with virtually any influencer across Instagram, YouTube and Blogs. Likewise, rewardStyle allows ‘global influencers to leverage turn-key ecosystems of simple-to-use tech products as well as consulting and educational services to maximize the economic success of their content across all platforms: web, mobile and social.
Beyond social media, digital personalization can help new shoppers navigate the sometimes-complex research process of picking out the right piece of jewelry. Rare Carat is a start-up that leverages IBM’s Watson cognitive technology to create a natural language chatbot, called Rocky, to help customers navigate the shape, carat, cut, color, clarity… and most importantly… price — to find someone’s perfect diamond.
3) Brands should continue innovating, and acquiring, to synergize the aesthetics of jewelry, with sprouting consumer needs for function and technology.
33% of Millennials look to jewelry to serve a functional role in their lives as compared to 21% of Non-Millennials. Furthermore 74% of Millennials are at least somewhat likely to buy wearable technology compared to 51% of N(on-Millennials.
Bellabeat, Kate Spade, Fossil (acquirer of Misfit), and Richline have all developed products that intersect jewelry and wearable technology features, such as fitness trackers, smartphone integration, and media sharing. The Bellabeat Leaf (pictured above) boasts a distinctive, elegant design inspired with natural features, and comes with an algorithm to predict your susceptibility to stress on any given day. It also tracks your activity, mindfulness and sleep causing it to be named by Business Insider as ‘Best Piece of Smart Jewelry over all’.
Berkshire Hathaway’s own Richline Group is making a smart jewelry line called Ela. Starting off with wrist-wear, but looking to expand into earrings and rings, Ela has fitness tracking aspirations as well as photo share, songs, and voice recordings. The gemstones light up and vibrate when an alert is detected, with color personalization possible. Richline acquired wearables firm Viawear in 2016 to help develop Ela.
4) Brands should embrace technologies and methods that tell and ensure an ethical story for gem origination, such as Synthetics and Blockchain.
Diamonds are indeed popular with Millennials — they are the preferred type of jewelry for 31% of Millennials compared to 17% of Non-Millennials. Yet Millennials are even more prone to be dissuaded by the ethical concerns regarding diamond mining (22% compared to 14%). One of our interviewees mentioned YCL Jewels as her preferred brand as it can be trusted for its 100% cruelty-free product, which for her justified paying a higher price point.
And what about Synthetic Jewelry? 63% of Millennials are at least somewhat likely to buy these lab-created gems as compared to 46% of Non-Millennials. New entities like Ada Diamonds, who define their products as ‘A Poetic Marriage of Art, Science and Environmental Progression’ claim their synthetic diamonds can lessen the reliance on mined diamonds and the exposure to unethical practices, as well as reduce the burning of billions of gallons of diesel fuel used in mining. Although marketers must overcome some “not the real thing” concerns, as mentioned by some of our interviewees, traditional brands should embrace these new entrants as product alternatives.
Blockchain presents a technical application that can ensure a consumer buys a blood-free diamond. Blockchain is a distributed computing technology that leverages the various actors and sources to log a tamper-proof electronic record of transactions and data, ensuring accuracy of provenance. A global start-up that uses emerging technology to assist in the reduction of risk and fraud for banks, insurers and open marketplaces, has already placed 1.6 million diamonds on Blockchain. The entries include the attributes of the diamond, as well as a certificate number that is inscribed by laser on the crown of the stone.
5) To meet the individual’s complete needs, jewelry brands should seek out partnerships with apparel brands and brands related to the workplace.
A prevailing theme in our interviews was the need for Millennials to seek out jewelry pieces that match their outfits. No one wears jewelry in a vacuum after all, so jewelry retailers should embrace a shopping experience that exists on the full terms of the individual. Imagine a cross-brand shopping experience where you could visualize a complete outfit — clothes, shoes, bag — and jewelry!! Collaboration examples include Bergdorf Goodman opening the new Jewelry Salon in 2015 with a collaboration with ethical gemstone minder Gemfields. Additional examples include Rebecca Minkoff with Stella & Dot and Bauble Bar with Target.
Another interesting finding from our survey was that 33% of Millennials say they wear jewelry with “professionalism” in mind, compared to 11% of Non-Millennials. This statistic could represent the fact that Millennials by their nature are less established in their careers and are looking to make an impression.
Nonetheless, 33% would seem to represent that professionalism is a substantial reason to purchase for many. Would it make sense for a major jewelry to partner with an apparel brand that is known for work attire (i.e. Ann Taylor, Brooks Brothers)? What about a collaboration with career matching sites (i.e. Indeed, LinkedIn)? Should a jeweler offer its own form of career advising and counseling?
Conclusion
Millennials are no longer the future of the jewelry industry — They are the present. Aged up to 34 years old, they already represent the same buying power as the 35 and older crowd (60% of Millennials reported spending at least $100 on an average jewelry purchase compared to 51% of Non-Millennials). The future of the industry relies on playing to this generation, as well as the digital natives that will follow them.
Smart brands will utilize influencers and social media, seek out digitization of the shopping process, research and acquire innovative product approaches (wearables, synthetics, 3D printed jewelry), use blockchain to show provenance, and partner with other providers to create a full shopping experience — from head to toe. Smarter brands will make these suggested moves central to sales strategies, and start the journey immediately. 2018 could be the most pivotal year the jewelry, and many other retail industries, have ever seen . And providing the new experiences demanded by Millennial buyers, could well just decide which brands make it to 2019!
