Unconventional Tastes and Secondhand Market Changing Diamond Ring Landscape

13/11/2016 22:01

In her recent article for Bloomberg, "Happy Couples Don't Buy Diamonds Online the Way They Used To," Polly Mosendz analyzes the changing landscape for diamond engagement rings - and in particular the online sales thereof. She notes firstly the trend for diamond rings to change hands online in way they never did previously, resulting in tremendous growth in the second-hand market. She notes the ring market on EBay has grown 58 percent over the last five years, digital jewelry consignment has been legitimized, and there are increasing numbers of online companies that have worked to ease concerns of fraud and generally make online jewelry resale more reliable. 

In this light, it is highly pertinent to see longtime pioneer in online diamond sales., Blue Nile Inc., agree to a takeover by Bain Capital Private Equity and Bow Street LLC just last week. Mosendz writes, "The deal announcement comes at an uncertain time for the future of engagement rings, a purchase that has come under pressure, in part, from the shift by millennial shoppers," adding, "Retailers are understandably concerned about the next generation's approach to engagements ... Prior to announcing privatization, Blue Nile reported an 8.5 percent drop in net sales of engagement rings in the U.S. during the recent quarter, from the same period a year ago."

When they do decide to settle, down, retailers are also facing the issue their less conventional tastes. "Kieron Hodgson, a commodities and mining analyst at Panmure Gordon & Co, said the traditional diamond engagement ring found at a conventional jeweler has been losing ground to vintage or bespoke alternatives. A ring from a big-name diamond retailer where mass-produced, identical rings line displays loses some luster in this context." De Beers' 2016 Diamond Insight Report takes a long hard look at Millennials and how the industry should best adapt to the changing landscape, but ultimately paints a positive picture, noting that Millennials spent $26 billion on diamond jewelry last year, making them the leading generational purchaser. "But Hodgson noted that this $26 billion includes a variety of diamond purchases, like bespoke designs, not just big-name retailer diamond rings."