Marketing Luxury: How Millennials and Gen Z are Shifting the Jewellery Industry

After discovering diamond mines in 1870 South Africa, British financiers behind the mining efforts set two goals to prevent saturation of the market:

1. Monopolize diamond prices?
2. Stabilize the market

The first goal was succeeded by the creation of De Beers Consolidated Mines, Ltd., which took full ownership and control of the world diamond trade. The company would stockpile diamonds and sell them strategically to control the price, cultivating a worldwide network of wholesalers. The only thing left to do was to figure out a way to control both supply and demand for diamonds worldwide, and the solution was found in N.W. Ayer, an ad agency who coined the familiar slogan, “A Diamond Is Forever.” N.W. Ayer discovered that to market diamonds and enforce the jewel as a luxurious product, you had to link it to something emotional, socially valuable, and eternal: Love and marriage. This, in turn, reinforced the "psychological necessity" of diamonds, and in 1947, the infamous De Beers campaign launched, creating a new tradition of diamond engagement rings.

However, values and consumer behaviours are bound to change, and the knowledge of Blood Diamonds threatened the jewellery industry. While the controversy surrounding the ethical sourcing of diamonds led to regulations being put into place by the UN as well as from other groups as part of the Clean Diamond Trade Act (CTDA), the damage had been done, and the industry took immediate action to combat this. The Diamond Producers Association (DPA) with De Beers, Alrosa, Rio Tinto, Dominion Diamond, Petra Diamonds, Lucara Diamond, and Gem Diamonds was thus formed, constructing a mandate that includes providing a reliable source of information about the industry, acting as a unified voice for diamond producers, and engaging with other industry and non-industry organizations. The importance of transparency was emphasized by addressing concerns by consumers on the value of their purchases, equipping them with details about the characteristics of a diamond and making pricing clear.?

Despite such efforts to mend the relationship between consumers and the jewellery industry, a major concern for brands in recent years was that millennials still aren’t buying diamonds. Why? Because companies are not adjusting their branding and brand values to new consumer behaviours. The drive for luxury and the outdated De Beers campaign of convincing men to pay a “2-month salary” for women whom they convinced should receive a diamond engagement ring as a token of love no longer resonated with new generations. With Millennials and Gen Z being the highest-educated but lowest-paid age demographic, suffering from student debt, and struggling to make ends meet in the current economy, buying overpriced diamonds is the least of their concerns. Millennials nowadays can be skeptical about the diamond engagement ring tradition and don’t trust the industry’s suggestion that a partner should spend twice their monthly salary on an engagement ring. Instead, with growing transparency in the marketplace and more data at their fingertips, millennials are making more informed and educated purchases, which calls for companies to rethink marketing and ad strategies, and how they relate to this growing mindset of consumers.

Tiffany & Co. for example, one of the leading worldwide luxury jewellery companies, introduced new products and expanded its online presence to appeal to millennial and Gen Z shoppers in 2018. Marketers shifted Tiffany’s “historic perceived branding message” to be millennial-friendly, piggybacking on luxury e-commerce startups to target wealthy millennials in 40 countries. However, the challenge with this strategy is that it relies heavily on brand marketing, advertising, and placing value on the fact that their diamonds are branded designer pieces to sell products. Influencer marketing and advertising are the main tools to capture consumer attention. Millennials and Gen Z know this and turn to new and other brands for good quality, yet affordable pieces that also satisfy their deeper desire to connect more with brands that they buy.

It’s brands like The Clear Cut and Mejuri that are really leading the way with social media and DTC (Direct to Consumer) strategies, discarding the diamond engagement ring tradition and encouraging women to relinquish passivity and the perception that nice jewellery should never be touched or worn, asserting that you should "Buy yourself the damn diamonds." Millennials and Gen Z are changing the way that brands view luxury in the jewellery industry, with companies adjusting their messaging and values to align with their largest market, which, according to De Beers' research, represents 29 percent of the world’s population and are the current largest group of diamond consumers.

Luxury is no longer a matter of price or exclusivity: it’s craftsmanship, creative designs, storytelling about the brand journey, quality materials, alongside a great brand experience. Mejuri relies on organic referrals and word-of-mouth in addition to its paid advertising and channel marketing. This philosophy expands to all aspects of the brand. Similar to The Clear Cut, Mejuri utilizes social media to sell its brand while also using it as a platform for its community to constantly receive feedback on its products and how to improve. It’s also a key part of their strategy to continue to develop their brand. What’s important for younger generations is the drive for self-expression in establishing their own style and personal traditions rather than following previous generations, or advertising that no longer connects with the new mindsets.?

When I first started my career in luxury over 25 years ago, there were only 3 or 4 brands that dominated and acquired 80% of all sales. Today, the market is much more fragmented, and brands need to work much harder to acquire loyalty and word-of-mouth referrals. Luxury brand marketing needs to change with the needs of society and what they are concerned with now. Rather than focusing purely on brand ads and marketing, what companies may put more thought into is brand value, ethical sourcing, social responsibility, pricing and manufacturing transparency, emotional experiences, product and industry education, founder and leadership team ethics, and affordability.

Diamonds are becoming increasingly more accessible through methods of selling like e-commerce and DTC models. Companies need to simplify the process of buying diamonds to attract a new consumer group. Personalized experiences and jewellery are also key – people don’t want cookie-cutter rings; they want a unique experience and product now. With the overarching influence that millennials and Gen Z have on today’s market and the strong concern for ethics, social causes, and responsibly sourced products, young consumers are driving a revolution in the diamond business. It’s a new era with a new look at what luxury is and can be to each individual. It's time for luxury brands to keep up with the times.?