Professionals in the diamond industry know that the millennial generation doesn’t have the same relationship to diamonds as their parents and grandparents did. For various reasons, including financial, personal, social and even environmental, diamonds have lost some of their shine with this new generation. Even so, buried in every article about why millennials are no longer buying diamonds is the caveat that in fact the millennial generation is buying diamonds, and even in fairly reasonable amounts. True, diamond sales have slowed in recent years, but in 2015 alone, millennials spent $26 billion on diamonds. That’s nothing to sneeze at! Perhaps millennials are indeed buying diamonds, but in a different manner and path than before? The Diamond Producer’s Association (DPA) is making a concerted effort to recapture this “lost” generation through a series of new marketing ads. But, what’s really going on with millennials when it comes to diamonds? Has the situation changed? Or is the trend away from buying diamonds in fact continuing?
The Pain Point: Low Cash Flow
Much of the problem lies in financial constraints. The millennial generation is one of the lowest paid generations, and in the US, they are steeped in college debt.
Millennials often marry later as well, buy cheaper rings to save money for a home investment, and prefer to spend money on experiences rather than ‘things’. Much of millennial money also goes towards the newest technology on the market. According to a research paper published by RBC Capital Markets in 2016 “diamond jewelry appears to be low on the buying lists among so-called millennials.”
Millennial Diamonds: The Lure to Allure
The DPA launched the “Real is Rare” campaign for the first time at the Academy Awards, with both a tagline and a story they thought would most appeal to the millennial generation. The strategy behind the campaign is two-pronged: to appeal to millennials through both the “real” aspect, as well as the “rare” aspect of diamonds. It not only pointedly takes aim at the increasing rise of cheaper lab-created diamonds, but also tries to establish an experience-like vibe through the rarity of the stone.
The idea is to help millennials gain a fresh perspective on diamonds. Millennials claim to crave authenticity, notable in a generation where most large purchases are short term, or experiential, such as tattoos, travel, upgrading phones and computers. In contrast, a diamond is tangible. It is authentic, precious and timeless.
The Current State: Unclear & Unpredictable
The millennial generation today, despite the best efforts of the DPA, seem more enamored by colored gems than diamonds. Experts stated that “A generation of marital-age people are now prioritizing other things such as weddings, housing, and the cost of having children, rather than splashing out on a really expensive ring,”
Yet perhaps it’s a matter of geography? According to Allianz insurance company, the average spend on engagement rings by the millennial generation in the UK is the equivalent of around $700. In contrast, for American millennials, the average engagement ring spend was just under $5000.
One of the newest trends spawned by the millennial generation today is buying rings with a personal twist that reflects the couple’s love story. These trends include choosing rings that combine the couple’s birthstones, or the gemstone of the month they first met. Many millennials are also customizing their own rings. With new options available online, consumers are turning to bespoke and special order custom rings that suit their style and have unique, individual appeal. According to some jewelers, much of their work is commissioned through customizing. Rick Merrill, owner of Main Street Diamonds said, “I would say 70 percent of my customers bring me a picture and say can you make this.”
Amidst all the statistics and focus groups, on both sides of the Atlantic, one thing is clear – the truth of the millennials’ relationship with diamonds is unclear. The “Real is Rare” DPA campaign is still relatively new, and has not been in action long enough to determine if it will in fact make a solid change in the diamond-buying power of the millennial generation. In addition, thanks to the growing popularity of colored gemstones, custom and bespoke jewelry, unique and off-the-wall choices for jewelry materials, such as wood, antique and vintage trends, the second hand online market, lab-grown diamonds and more, the future for diamonds among millennials is something to watch.