Will Millennials Still Say “I Do” with a Diamond?
By Maggie Reynolds
For some, a diamond is merely a compressed piece of coal that was created roughly 100 miles below the earth’s surface. Others feel this enchanting stone, formed under intense heat and pressure, over the course of one billion years, is one of the few chosen symbols that contribute to romance and lifelong attachment.
Image above: ©Twenty20.
How does the millennial generation—those born between the early 1980s and 2000—feel about diamonds and the purchase of an engagement ring? As the largest generation in the United States and with an estimated purchasing power of over $1.6 trillion, their views are closely watched by the jewelry industry. Many believe the false perception that millennials are not interested in purchasing or possessing jewelry, particularly diamonds—news that has not been enthusiastically received by the jewelry industry.
Which factors are contributing to this misperception? Because millennials have been faced with employment challenges and are achieving financial security later in life compared to previous generations, there can sometimes be little room for buying alternative assets such as diamonds and jewelry. Millennials’ buying patterns also remain unconventional, with more focus on adventure and experiences, especially from value-driven companies and organizations. In addition, when they do buy jewelry, they often buy from nontraditional platforms such as directly from designers, online stores, and boutiques.
However, new research is showing that the diamond market will not be affected by the anticipated disinterest of millennial consumers.
De Beers states that millennials will drive bigger sales in the future and that current sales show this perception of disinterest in diamonds is a myth. The US State of the Jewelry Market report by Edahn Golan Diamond Research & Data revealed that for the first time, millennials have spent more than any other age group on fine jewelry—nearly 28% more than the average household. The Market Realist report overview of luxury market leader, Tiffany & Co., reveals trends shaping the jewelry industry include increasing demand for luxury branded jewelry due to distinctive designs, credibility and quality, and increased focus on e-commerce sales—areas that reflect millennial buyer habits.
Like with other luxury markets such as wine, the jewelry industry is pivoting its marketing tactics to be more aligned with millennials and their ever-changing, unique desires. According to The Knot’s 2015 Jewelry and Engagement Study, spending on engagement rings is on the rise. The average price reached $5,978 last year, up from $2,100 a decade ago. Those who purchased the particular stones, often responsibly sourced and separate from the setting, spent more for a total of $6,071.
Although the tradition of the diamond engagement ring has only been around for under 100 years, it appears it will continue to be a token for the next generation after all.