The Economist Explains Why Millennials Don't Buy Diamonds; Millennials Get Angry

Market Analysis
07/07/2016 11:12

In a recent article entitled "In the rough: A diamond is for ever. But its allure comes and goes"The Economist seized the occasion of the non-sale of the "Lesedi La Rona" diamond to expound on the difficult times facing the diamond industry. "It was the latest disappointment to befall an industry that has had little to celebrate. Two days before, William Lamb, Lucara’s chief executive, said he believed the auction would symbolise the allure of diamonds and their promise for African development. He hoped to 'dispel the rumour that all diamonds are bad'. That reek of notoriety has clung to the industry in recent years, especially among the millennial generation that came of age as evidence of 'blood diamonds' emerged from the war in Sierra Leone in the 1990s." While correctly noting the current issues concerning diamond financing, soft Chinese demand and falling polished prices, the article cites "reputational headaches" as the main reason why the diamond trade is suffering, and why Millennials are not buying.

In particular, The Economist notes the adverse effect of "ethics-based marketing" as implemented by synthetic diamond manufacturers such as The Diamond Foundry, which, "seeks to bolster their appeal by attacking traditional miners at their weakest point - ethical sourcing. The impact is more deeply felt because one of its backers is Leonardo DiCaprio, star of “Blood Diamond”, a film released in 2006. Selling its diamonds as 'morally pure' should play on the social conscience of millennials." The magazine then baited its target audience with its Twitter post, "Why aren't millennials buying diamonds?", and they responded, calling out The Economist for failing to understand the financial challenges facing said generation. According to them, it has nothing to do with morality and everything to do with finances. "Why? maybe because they're burdened with crippling student loan debt and can't actually find a good paying job"; "I have $8 to my name", and so on. So now The Economist knows a little more about Millennials.