Millennials are opting out over the idea of buying diamond engagement rings. Instead, they want to spend their money over experiences such as travelling to exotic places. Millennials approach relationships differently. As an ideal marriage of 1950s which has a working husband and a stay-at-home wife has changed, and so would the wearing of a diamond engagement ring.
Young couples are socially active and would rather spend money on destination weddings, vacations and concerts than spending it on an expensive piece of jewelry. This allows them to post their experiences on social media.
Apart from spending on vacations and concerts, A De Beers Insight report states that fine jewelry is not in the top 5 gift list of US women. Luxury goods like electronics, home furnishing, designer handbags and clothing rated way ahead of fine jewelry.
Moreover, while diamonds are somewhat a symbol of getting married, today’s couples are inclined more towards non-conventional stones like sapphires and rubies.
Bank of America Merrill Lynch analyst Ashley Wallace said in a research note from June 2016, “Millennial consumers have distinctive preferences, which in many ways diverge from previous generations. They tend to be more value conscious, more concerned with sustainability and ethical production, and often value unique and individual products versus items that are standardized and mass-produced.”
Another reason for millennials not buying diamonds is that they aren’t getting married as soon as the generation before them did. According to a research conducted at Boston College’s Franklin W. Olin College of Engineering, a 9% increase has been seen from the 38% of women born in the 1980s being single till the age of 33 to the projected 47% of women born in 1990s. Whereas, there were a mere 9% of women born in 1940s who were single till the age of 33.
There are some women who want to remain unmarried for the rest of their lives. A projected 36% of women born in 1990s would make this decision compared to only 8% of women born in 1940s who remained unmarried at 43.
Sensing the threat to the diamond industry, De Beers and other diamond mining companies have come up with a marketing campaign focusing on the scarcity of mined diamonds. They hope to connect with the millennials by stating them as part of a jewelry that represents the commitment of an everlasting relationship rather than the marriage.
A report by advocacy group Young Invincibles said millennials in US earn 20% less than the generation before them at the same stage of life. They are also found to have higher levels of debt when they were students compared to their parents.
Both, De Beers and Alrosa, giants in the diamond industry recorded a fall in their sales for the first four months of the year. De Beers saw a fall of 11% during the fourth sales cycle of the year compared to the third. It recorded a sale of USD 520 million for the fourth cycle, compared to USD 586 million for the third cycle of this year. Whereas, Alrosa saw 45% fall in the sale of diamonds for the first four months compared to last year. It recorded a sale of USD 310.2 million during the January to April period. The sale mostly consisted of small, low-priced diamonds.
In an attempt to increase its sales, De Beers is stepping into the polished diamonds market. It will start selling polished diamonds from the month of June through auctions.