De Beers today published its "Diamond Insight Report 2016", leading off with the following: "De Beers first published its Diamond Insight Report in 2014. In the two years since, much has changed, but the strong diamond industry fundamentals remain the same." Nonetheless, 'With the first half of 2016 showing signs of more stable conditions returning, it is clear that volatility in the diamond sector is not a short-term phenomenon, but the new normal," says CEO Bruce Cleaver. "The main changes," it later states, "relate to macro-economic trends in emerging economies, especially in China and India, as well as volatility in world economic growth forecasts. These developments will demand that diamond industry participants strengthen their competitive capabilities even more through better planning and more investment in innovation and marketing." In the coming days, The Diamond Loupe will bring you the salient elements from this report - or feel free to read it here.
First Insight: Millennials
"Millennials (those aged 15-34 in 2015) spent more than US$25 billion on diamond jewelry in 2015 in the four largest consumer markets (the US, China, Japan and India), acquiring more than any other generation," writes De Beers in their initial press release, "already accounting for almost half of the total retail value of new diamond jewelry acquired in these four markets, despite facing more financial challenges than their parents’ generation." The top four markets account for 73% of global diamond jewelry demand, and the potential Millennial market for diamond jewelry is more than 220 million people. "Meanwhile, the Millennial generation is not expected to reach its most affluent life stage for another 10 years, meaning this demographic also represents the diamond sector’s largest growth opportunity."
The report points out that the diamond industry will have to adapt to the purchasing trends of this generation, particularly that of self-purchases, "representing 31% of all non-bridal diamond jewelry pieces acquired (in the US) in 2015." Consequently, "the diamond industry will need to adopt effective strategies for maintaining and growing demand from the Millennial consumer group." One thing working in the industry's favor, however, is their finding that, "Despite experiencing less favourable economic conditions than preceding generations and progressing more slowly along the traditional life path, Millennials do express strong desire for diamonds when they reach financial and demographic maturity."
Adapting to a new generation
The report specifies several overal consumer preferences and trends that the industry - and retailers in particular - will need to take into consideration, such as elderly consumers expected to generate the majority of global urban consumption growth by 2030, an increased focus on self-expression among consumers, resulting in a continuation of the growing relevance for design and branded jewelry, the fact that economic empowerment will drive self-purchases - especially among women - and a trend toward more knowledgeable consumers that push for ethical products with known provenance. But the dedication of an entire, 15-page chapter to the Millennials shows where the forward-looking emphasis lies.
It debunks myths, such as: Millennials are not interested in diamonds; Millennials in the US are less interested in diamonds than their parents and grandparents, and; Millennials are very different from older generations when it comes to romance. It then crunches the numbers, determining that "Millennials connection with diamonds remains strong," and concludes with an in-depth look at three specific trends among this generation: Strong friendship networks and relationships; Self-expression and individuality, and; High interconnectivity and technological proficiency. Our summary just touches the surface of a report sure to keep readers busy for the coming days and weeks.