The Blue Nile, founded in 1999, a pioneering company in the 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.
But, this shift is representative of how it is in the entire jewelry industry. Stemming from all of the changes that are happening in the industry, the diamond, and jewelry market is getting affected as well. Some may be favorable, while there are others that are less favorable, too. Diamond and jewelry, are, therefore, the finer things in life, are considered luxuries. When the budget gets tight, it’s just but normal for many to prioritize the essentials first.
That said, here are some of these visible changes in the diamond and jewelry market:
1) Shifts In Financial Outlooks Of The 18-35 Years Old Age Group
The 18-35 demography, or age level, is marrying later in their lives compared to their previous generation. There is that desire to earn a stable income first, or better financial stability before carrying on with the responsibility of raising a family.
They are known to be spending lesser in their twenties as compared to their elders because of the heavy burden of education debt and falling prey of unattractive job market, which are all effects of the global financial crisis. These factors are overall upsetting the diamond market. It’s expected, therefore, that today, this age group is also buying luxuries like jewelry less than the previous generation was.
2) Shifts In The Modern Bride’s Jewelry Choices
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 the case of the 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. This means that brides today are getting more flexible with their choices. Rather than sticking to the classics, they’ve also gone to be a little bit more adventurous. This poses a challenge to jewelry makers to also make this adjustment in the rings that they put up for sale in the jewelry market. Men, therefore, also have to be very cautious about these changes, in selecting the perfect engagement rings for their bride-to-be.
3) Brides Today Are Also More After Custom Pieces
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) Selling Old Jewelry Has Now Become Quite A Norm
There is also a growing trend of selling old diamond jewelry to buy new ones after shorter period of usage. This trend has made pawn shop jewelry very popular, as selling to pawn shops is also a prevalent choice. Plus, these pawnshop jewelry pieces are also forming vintage, rare jewelry, which has become well-loved.
5) The Growth Outlook Of Diamond Retail Sales
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. After all, online shopping has also quite become prevalent, due to its convenience. 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.”
These five real-life situations only prove to show that today, there is indeed a shift in the spending habits of various consumers. The general outlook is that spending has become a little bit more conservative. Because of the global economic crisis, many more are leaning towards focusing on the needs, rather than their wants. The financial responsibilities that many face today also stop them from purchasing some of the luxuries in life. But, this could only be temporary and can change, especially when the economy also starts to get better.