Rapaport Magazine

Telling The Story

Millennials’ purchasing habits are different than previous generations. For them, it is about the personal story that is told through what they buy.

By Lara Ewen

Why do some retailers have such a hard time selling diamond jewelry to Millennials? It’s not for lack of trying. The industry has commissioned studies, hired experts, created Facebook pages and worked hard to polish its image. But the general consensus is that none of these efforts has resulted in any sort of industry-wide success. The issue has become a troubling thorn in the side of many retailers who watch nervously as their existing customer base dwindles, while newer, younger customers remain frustratingly elusive.

Problems of Perception
   For some experts, the issue is that the world has changed around an entrenched diamond business that’s too set in its ways to see its own shortcomings. One of those shortcomings is that buying and owning stuff in general just doesn’t have the same appeal it used to have. “The entire premise of ‘diamonds are forever’ is a strategy built around ownership, but we’re moving into an economy that’s not about ownership,” says Ian Chee, digital brand strategy consultant at iamchee.com, and recent chief strategy officer at MRY brand consultancy. “We have Uber and Airbnb. We’re in an economy where people are learning to share. In this kind of experience economy, diamonds are the epitome of an object. And so you have to choose between say, diamonds and a wedding. And that cost-benefit analysis is skewing toward community.”
   Another issue that’s perhaps more familiar, but less savory, is the idea that Millennials think diamonds are bad things to have. “Millennials think that a blood diamond is exactly what the movie is,” says Jennifer Dawes, treasurer and member of the board of directors at Ethical Metalsmiths, and owner of Sonoma County, California–based jewelry brand Jennifer Dawes Design. “They think it’s about people who are being disenfranchised and people in war-torn countries. And there’s a seed of truth to that, but the industry is denying and denying, instead of doing something to create transparency.” She says even when there’s a move toward transparency, once a parcel gets sold to cutters, much of the transparency gets lost.
   However, according to Hana Ben-Shabat, partner in the retail practice of A.T. Kearney, a global management consulting firm, the idea that Millennials are either pro- or anti-diamond is too facile. She argues that while anecdotal evidence may suggest certain assumptions, it’s specious to look at all Millennials through the same lens. “We have a lot of broad and brash assumptions about Millennials,” she says. “But looking at Millennials as a group is misleading. In October 2015, A.T. Kearney did a study with The NPD Group, a New York–based market research company, trying to understand Millennials’ attitudes toward luxury. They are interested in luxury as much as any other generation, but they define it differently. If money were not an issue, they would spend more on luxury.” Ben-Shabat also says that the attitudes toward luxury and luxury spending hinge significantly on where a Millennial is in his or her life. “If they’re married, or single, or a parent, they will behave differently. That’s why you have to further segment.”
   That said, there are some overarching themes, and again, ethical concerns about diamonds that do exist. “When it comes to jewelry, Millennials are open to purchasing diamonds, but they have to come to an ethical source, because values are very important to them,” says Ben-Shabat. “There’s an increased interest in synthetic diamonds, and there’s an increased interest in colored stones. I think you see that more, and I guess it’s because the movie ‘Blood Diamond’ received a lot of press.” While Ben-Shabat says that some of this research might not reflect the majority of Millennials, it’s almost beside the point. “We should be careful not to make statements about the majority,” she says. “We should be targeting individuals and not groups.”
   Of course, there are still plenty of people in the industry who don’t believe that ethical concerns are a big problem. “If you talk to any retailer, very few of them are dealing with the issue of blood diamonds and social issues,” says Ellen Fruchtman, president of Toledo, Ohio–based Fruchtman Marketing, which specializes in marketing to the jewelry industry. “In bigger cities, there may be more discussions about this, but in Middle America, it’s not the case. Our clients, who are typically guild jewelers and independent retailers, tell us it’s not an issue.”
   For Fruchtman, the biggest hurdle is simply Millennial disinterest based on new, practical priorities. “What most of our retailers are facing is that people want to get engaged, but beyond that there is no burning desire to purchase fine jewelry,” says Fruchtman. “Millennial perception of jewelry is one of indifference. Luxury items like diamond jewelry are simply the farthest things from their minds. This is a generation worrying about a career and paying college loans. It’s ridiculous for this industry to not understand the situation.”
   Nonetheless, Dawes feels that it’s impossible to separate the financial concerns from the emotional concerns, especially when potential clients are doing their own research. “My clients are Millennials, and if you give them information about exactly where the stone comes from, they care a lot,” says Dawes. She explains that Millennial customers are concerned with the emotional baggage a stone carries. For example, a stone can be tarnished “psychically” from unethical mining, or by being associated with environmentally unsafe sourcing. “They want the stone to be psychically clean. The nontraditional and aesthetically oriented Millennials care about where everything is coming from and want to put their dollars into something that makes sense to them economically and socially. I think most jewelry stores are out of touch with this market.”


It’s All About Education
   If Millennials are misinformed about diamonds, though, the industry only has itself to blame. A dearth of consistent, engaging industry-wide information about sourcing and ethical concerns means that when many Millennials begin to research diamonds, they initially discover only the easy, and often incorrect, answers to complex questions.
   “Some of my clients absolutely do not want a diamond,” says Dawes. “It’s because they saw the ‘Blood Diamond’ movie. Customers are really irrational and emotional about the diamond industry, and there is so much misinformation out there.”
   Ben-Shabat agrees, and believes that the industry needs to do better not only in terms of teaching its Millennial consumers but learning from them. “It’s about education,” she says. “The source matters. We need to educate Millennials about where stones are coming from and we need to understand their values. And you can have education without making people feel like they’re being lectured to. Think about the amount of time consumers spend on websites. They want to learn. They want to be educated. So we should tell the story of the stone, and do it in a way that’s about sharing stories.”
   Fruchtman also thinks that education needs to be a two-way street, and retailers need to educate themselves more about Millennials. “By the time the Millennial customer comes in, they know what they want,” she says. “But the industry doesn’t embrace tech. You have jewelers who spend insane amounts of money on cases and then want to get the cheapest websites. So here’s what’s so sad. Jewelers wait to embrace technology until such a point that we, as marketers, can only put a Band-Aid on their problems. If they were all doing it the right way, and embracing the technology, they’d be making money.”
   Dawes also worries that the time to fix this problem may be slipping away. “I think the jewelry industry has caught on too late,” she says. “The diamond industry is getting in the way of itself, and they’re being so protective.” She describes an incident that helped clarify her concerns. “I did my first completely transparent collection of traditional bridal in 2013,” she says. “I knew where all the diamonds came from, including the melee. And I had stores that just didn’t care about it at all. One woman asked me if I was a hippie. And I thought, ‘These people have completely lost touch with who their client is.’ That’s the reality. Some people in the industry are in their own little bubbles, and they don’t want to connect with Millennials, because they don’t understand them, and they don’t want to start the conversation about ethical jewelry, because they’re afraid it will make the rest of their jewelry collection look bad.”

What They Buy and Why
   There is positive news, of course, which is that Millennials are buying jewelry. Just not the same jewelry their parents bought. Some analysts see this as an opportunity for the industry, rather than a threat. “There are many indications that the 25-year-old to 34-year-old age group buys casual jewelry that goes well with a more casual dress code,” says Edahn Golan, founder of Edahn Golan Diamond Research & Data, an Israel-based international consultancy that provides research analysis and consultancy services for the global diamond industry. He also sees Millennials looking for the unusual. “We keep seeing a desire for uniqueness,” he says. “Something that allows a person to demonstrate that he or she is an individual and not just another member of the crowd.”
   That’s why Golan sees the need to create products that will work for them. “I’m not sure Millennials are problematic buyers or even ‘not-good-enough consumers,’” he says. “They do buy diamond jewelry, although less than some other age groups. But it would seem that the simple answer is to make the diamond jewelry category relevant to this consumer segment. The trick is to tailor it to the desired consumer audience.”

Stop Marketing, Start Connecting
   Tailoring jewelry isn’t just about the design stage, though. Conversation, too, is part of the personalized message that many Millennials are looking for in a brand. “We are living in a world where there is so much information, and the only way to stand out in a crowd is to tell a story,” says Ben-Shabat. “Otherwise your ad is just another piece of data. And personalization, showing me that you know who I am, is important. The more you’re able to personalize, the more you can create a transaction.” She also says that finding a way to relate to consumers is easier than ever. “Today, consumers give you so much information online,” she says. “You should be able to create a profile.”
   Once a retailer begins the discussion, though, it’s critical to make sure it’s not canned. “When something is genuine, you can relate to it,” says Fruchtman. “Show real people in your ads and on your website. Communicate real experiences. Talk about the journey from mine to finger. Talk about what it takes to cut one beautiful diamond. Talk about the good the industry is doing. Talk about what you are doing in the world and in your community. Don’t sell them stuff.” Fruchtman says the disconnect between stores and Millennials happens when the conversation shifts to technical details such as certification, and the focus on the story gets lost. “Are there individuals who care about the technical details and price?” she says. “Of course. But, they can get that info on your website or any website all day long. That’s not what’s going to bring them to your door.”
   According to Chee, in many ways, it’s better not to try and sell a diamond at all. “It’s not a diamond,” he says. “It’s emotional value. So it can be a tattoo and it can be the wallpaper on your phone. For example, I have already changed my engagement ring three times. It started with one ring, and now I wear three rings at a time. At the end of the day, I still wear the ring, but it’s more about telling people that there’s someone I love.”
   Chee also believes that jewelers who can sell an experience instead of an item are the ones who’ll succeed. As the old adage goes, it’s about selling the sizzle, not the steak. “If today’s economy is about community and sharing, then build an experience around it,” says Chee. “It’s about how to propose, instead of just the diamond.” He suggests that retailers begin to elevate the social aspects of a jewelry experience in order to create moments and memories. “Look at yourself as not in the business of selling a rock, but as being in the business of creating a monumental expression of love.”

Article from the Rapaport Magazine - May 2016. To subscribe click here.

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Tags: Lara Ewen