Bain Report: Millennials Have Same Attitude, Preferences for Diamonds As Other Generations

Retail and Consumer Confidence
07/12/2016 11:40

The recently published Global Diamond Report 2016 prepared by Bain & Company and AWDC covers industry developments in 2015 and early 2016 and takes a close look at the millennial generation (roughly speaking, people born between 1980 and the early 2000s) as a new category of diamond buyers. One undeniable conclusion from their survey of diamond-related consumer preferences among Millennials in China, India and the US is that the only significant difference between the millennial generation and older generations is how they purchase diamond jewelry (shopping behavior and response to marketing), rather than their attitude toward diamond jewelry. Given their rising numbers and maturation of purchasing power, the report concludes that Millennials represent a compelling opportunity for the diamond industry.

The age group is similar to previous generations in terms of size, current and future spending levels and positive attitudes toward diamond jewelry. However, as mentioned, differences in shopping behavior suggest that dedicated marketing efforts and targeted customer acquisition strategies are needed to reach this group of customers effectively. The population of Millennials in China, India and the US totaled roughly 900 million in 2015, or 27 % to 35 % of the three countries’ total population. Their combined gross income amounted to approximately $8 trillion, which, if they were a nation, would make them the world’s fourth-largest economy, behind the US, the EU and China. Millennials’ combined gross income will likely double to some $16 trillion, or 38 % of total gross income, by 2030.

Attitudes

The first promising finding for the diamond industry is that wherever surveyed, Millennials believe that an engagement ring must have a diamond at a higher rate than non-Millennials. Futhermore, jewelry remains universally one of the top three preferences among all consumers when it comes to giving or receiving gifts, ranking third in the US and first in China and India. Millennials in China and India rank jewelry as their no. 1 gifting category while non-millennials ranked it second and US millennials place jewelry third, after money and electronics. Furthermore, Millennials tend to spend as much of their incomes on jewelry as other age groups. Millennials in the US tend to use of the internet more frequently for jewelry purchases, while in China they prefer visiting specialized retailers and in India, they tend to prefer department stores. In both India and the US, millennials are likely to seek family advice before buying, while Chinese Millennials, like people of all ages in China, prefer to shop at specialized jewelry retailers and tend to make their purchase decisions in-store.

When asked about the feelings that synthetic diamonds evoke, Millennials report several negative associations, such as “fake”, "artificial", “not real”, “cheap” and "worthless" as well as neutral ones such as “less expensive”, “technology” and “affordable". Millennials in China and the US who are considering synthetics as an alternative to natural diamonds cite the lower price of synthetics as their key decision driver, while in India cite their perception of a more favorable ratio of price to quality. In China and India, millennials cite the advanced technology that goes into synthetics production as their No. 2 decision driver. Any mention of synthetic diamonds being more ethical was negligible.