Will Millennial Purchasing Power Change the World?
Let’s just say it. The way that Millennial's expect — really demand — to be treated in retail is radically changing, and the ripples of that effect are being felt all over the world. The laundry list of the changes requested is not short. A completely personalized experience — seamless, beautifully designed and delivered. A transparent and fair market price. A superior product or service … And a Company that stands for what, they also, believe in. Humanity. Equality. Honesty. And more.
To understand how new era buying is positioned to change not only immediate and direct markets in question — but all markets that even tangentially touch them — let’s look at a real-life example. Let’s look at jewelry. Jewelry — the marriage of stone and ore, that have acted as currencies themselves throughout history. If we take a quick look at the financial realities of the jewelry business, they are not vastly different from many other markets competing to survive today. How will the jewelry industry, and many others, meet consumers with low costs, impeccable service — and heart? Can emerging technologies perform that magic?
Think Margin Shrink
OK — let’s take a closer look at the jewelry industry. First, margins cannot be increased. Studies show that consumers today are actually more price conscious than they were even after the crisis of 2008. Millennials are making about $10,000/yr less than their counterparts in 1989, and they also carry a higher student debt ratio. The pain is real. According to a recent Gallup poll, today’s Millennials spend $20/day less on retail than they did in 2008. People may still be buying, but today’s powerful product search engines offer full — as in global — price transparency, and that has changed the game.
Meeting the Mark; Millennial Morals
You can’t discuss the modern jewelry market without speaking about Ethical Sourcing. New consumers are calling for clarity not just for fairness in price — but also for fairness to all workers — people — who touch the product supply change. ‘Where did your product come from? Was the process used to extract it safe? Fair?
Let’s face it — the Millennial market place — and the Gen Zers behind it — will demand full information on a product or service before even beginning down the path to purchasing. The fact is that generations of today are demanding industries have impeccable, identifiable ethics — because they can. Technology has given them access to that tool, and the right to use it. What technology will help the jewelry industry create the transparency demanded— and the ability to trace for ethical adherences all-in-one? And how will it all be created without raising the cost? You guessed it — Blockchain.
Bring on Blockchain
So how specifically will Blockchain benefit the jewelry market? The global industry for diamonds, jewels and gold is over $80 billion/year. For suppliers, regulators and retailers alike — reputation and trust remain two of the biggest challenges impacting their industry. The market itself is highly susceptible to fraud and theft due to a long and complicated supply chain. In fact, annual fraud for jewelry insurers costs companies over $2 Billion per annum. This is compounded by challenges faced in some regions of the world, to ensure conflict free jewels, as well as assurances that gold and other ores are mined using environmentally sound methods. As such, it’s easy to see that the entire eco-system would benefit from an affordable technology that delivers truth with ease. Bring on Blockchain.
As we all know by now, Blockchain technology establishes a trusted and transparent environment for all parties, omitting the need for a central authority. Its immutable record of transactions and users, means that no one can modify it. Blockchain then, is well positioned to wipe out duplications, ‘paper’ work, and endless reconciliations. Blockchain can decrease fraud claims and verification processes. It also makes it easier to track both the jewels, and the precious metals, that create retail jewelry, globally across international borders. Consultants estimate that Blockchain can save, just the insurance and re-insurance companies in the jewelry supply chain, up to $5 billion dollars/year — needed capitol in today’s markets!
So Who’s Gonna Build the Blockchain?
Using Blockchain to improve jewelry journeys is not a brand new idea. Start-ups, like EverLedger, have been investigating, and investing in Blockchain since 2015. By optimizing IBM’s open sourced hyper-ledger technology, EverLedger established a foothold in the jewelry market, and now has over 1 million diamonds cryptographically secure on it’s technology. Incumbents like DeBeers are also kicking the tires of Blockchain. CEO Bruce Cleaver offers, “Blockchain is as immutable as anything invented. It’s a much more un-hackable system than one on a single server.” DeBeers says they plan to experiment with a Blockchain that will span it’s entire value chain, and that it would be open to everyone in the industry.
Is ‘TrustChain’ the Must Chain?
It’s not set in stone how Blockchain technologies will emerge in the jewelry industry, but we do know that an initiative has recently been unfurled that might just be the biggest disruptor yet. Meet ‘Trustchain’. Richline Group, in collaboration with IBM, Asahi Refining, LeachGarner, Richline Group, and Underwriters Labs, has announced an industry consortium that will be underpinned by Blockchain technologies. This will be the first cross-industry initiative to use Blockchain to trace the provenance of finished pieces of jewelry across the supply chain for increased transparency.
The platform uses blockchain to provide ‘digital verification, physical product and process verification, and third-party oversight’. It tracks the transformation of raw diamonds and gold into consumer jewelry products, all the way from mined raw materials through fabrication, and finally on to retail sales. The Blockchain verification would allow for agreed upon provenance of supplies, leaving no room for double guessing which country a diamond came from.
All participants of global diamond, jewel and gold markets (miners, gemological scientists, certifiers, regulators, shipping managers, wholesale suppliers and retailers) can gain permissioned access to known and trusted information regarding the movement of an item throughout the supply chain. The pilot enables a consortium of the leading diamond and jewelry companies from around the world, working with tech giant IBM, to trace products from the original source proving complete authentication to the end consumer.
And what if the original fabric of the Blockchain can be used to host other technologies, allowing them to take root? Imagine how using sensor and chip technology to translate data gleamed from the automated movement of physical goods could improve the information being encrypted in Blockchains. “Smart Contracts” such as these are being hailed as the next big win for Blockchain technology.
And Blockchain doesn’t have to stop at products — it can also be used to monitor people! ‘Staff and supervisors from different vendors can be granted special permissions, allowing members of a supply chain community to monitor the activity of each other’s credentialed staff’. Blockchain, as the immutable boss!
A Bright Future for Blockchain
Yes. There will be bumps in the road, but experts are convinced Blockchain will be able to fundamentally and positively change how the jewelry business, and other industries, work — and that’s good news for everyone. Add the fact that 75% of Millennials are willing to pay more for sustainable goods, and 49% of Millennials say they always consider ethics when making a purchase — and Blockchain investment starts to sound like a no-brainer. To watch people demand fairness and transparency, and to watch technology protect and improve the lives of workers globally, is not an insignificant thing. One small step for the Jewelry Industry. One giant leap for Mankind.