By Tebagano Ntshole
Molepolole — De Beers has shifted its strategy as the youths, classified into two distinct groups of Millennials and Gen Z, combined for two-thirds of global diamond jewellery sales in 2017.
Data published by the De Beers Group in its latest Diamond Insight Report shows that diamond jewellery demand reached a new record high of US$82 billion last year.
Millennials are classified as people aged 21 to 39, and they represent 29 per cent of the world’s population, hence the largest group of diamond consumers, accounting for almost 60 per cent of diamond jewellery demand in the US and nearly 80 per cent in China.
It is said that spending power is expected to come from both their own earnings and inheritance.
The World Bank forecast collective income will exceed $4trillion by 2030, and according to De Beers, Accenture estimates that they will receive a transfer of at least $30trillion during the next decades.
Gen Z, those currently aged up to 20 years represent 35 per cent of the world’s population and has potential of becoming diamond consumers in the next decades.
The Insight Report states that Gen Z has $200 billion in direct buying power and $1 trillion in direct spending power as they command significantly more influence on household purchase than prior generation.
While they are not yet financially mature, those aged 18 to 20 acquired five per cent of all diamond jewellery pieces in the US last year.
According to the report, there are key similarities and differences between Millennials and Gen Z as a result of their life experiences that have particular implications for diamond brands and retailers.
It is said that Millennials are in general more mistrusting, requiring brands to earn their trust before they can pursue growth, while Gen Z tend to be more individualistic and optimistic, desiring products that help build their own personal brands.
There are also a number of important similarities between the generations, especially with regards to valuing love, being digital natives, being engaged with social issues and desiring authenticity and self-expression.
Given these similarities and differences, the 2018 Diamond Insight Report highlights three key areas of opportunity that the two younger generations present for the diamond industry.
The first opportunity is about meeting Millennial and Gen Z needs for love and commitment on their own terms.
According to the report, romantic love remains the key driver globally for diamond jewellery sales, with both Millennials and Gen Z holding strong aspirations to be in committed relationships.
However, their attitudes towards how they express and symbolise their love are evolving.
When it comes to love and marriage, although many Millennials and Gen Z still want to follow tradition, there is an increasing focus on personalised products and relaxed experiences that reflect their individual values and preferences.
The bridal market continues to be of central importance, representing around 27 per cent of diamond jewellery demand in the main diamond consuming countries, but diamonds given simply as a gift of love or romance (unrelated to marriage) are also a significant share of demand from younger consumers, representing a further 12 per cent of total demand in 2017.
Digital communication is important as online shopping and social media are significant to these generations when it comes to researching purchases.
It is said that the majority, 60 per cent of US Millennial and Gen Z women aged 18 to 39 search the Internet prior to purchasing a diamond to learn about designs, quality, pricing and brands.
In China 98 per cent of youths aged 19 to 29 research their purchase through one of more channels before buying.
The report indicates that the two groups access different social media platforms, with Gen Z preferring Instagram and Snapchat while Facebook, Twitter and Pinterest are for older generations.
De Beers Group Chief Executive Officer, Bruce Cleaver, says, “The younger generations present wide-ranging opportunities for the diamond industry with the significant size and purchasing power of today’s Millennials and tomorrow’s Gen Z consumers.
While both of these generations desire diamonds just as much as the generations that have come before them, there are undoubtedly new dynamics at play: those diamonds may now be in different product designs, used to symbolise new expressions of love and researched and purchased in different ways to mark different moments in life.”
<i>Source : BOPA</i>