Luxury Jewelry Brands Seeking to Tackle the Millennial Market
The rise of online shopping and influencer advertising necessitates a decisive shift in strategy for the jewelry industry as it attempts to corner the millennial market.
Faced with a whirlwind of changing customer habits, luxury brands have begun turning to social media as a connection point with the latest generation of consumers. Some have been quicker off the mark than others; luxury fashion companies like Fendi and Gucci are now running fairly successful electronic campaigns, coupled with user experience overhauls on their websites to ensure easy online shopping. Now attempting to rise to the same challenges is fashion’s natural compatriot, the jewelry industry.
The Heritage jewelry market overall remains relatively successful for the time being, but their continued prosperity hinges on seducing the 18-to-34-year-old demographic. An in-depth 2016 study by international diamond company De Beers called this group “the most important cohort for diamond jewelry purchases.” And as newer jewelry companies compete for their target’s attention, these well-established brands must work to get their act together and capitalize on the priorities of this demographic.
At the top of that priority list is the expression of individuality.
Unlike the previous generation of shoppers, who tended to choose companies like Tiffany & Co for the purchase of status symbols, millenials are relentlessly focused on building their own brands and will follow companies whose products complement their personal style. De Beers noticed a definite "increase in the proportion of people acquiring diamonds simply because they like a particular design.” The simple allure of owning famously branded jewelry is no longer enough; that jewelry must now offer uniquely desirable characteristics. “Design appeal is expected to become more important in attracting new and repeat customers to the category," writes De Beers.
This turn towards distinctiveness also correlates to the rise of financial power among women. As female success within the workforce increases, the intended recipient of fine jewelry has largely shifted towards the self; De Beers called the self-gifting phenomenon “one of the clearest opportunities for future growth. Having a selection of diamond jewellery which appeals to the woman looking to celebrate a personal milestone, or to buy something special to reward herself, should become as much a focus for jewellers as bridal and other relationship milestone-related jewellery.” It’s no wonder that as women’s personal successes expand well beyond marriage, they are choosing more and more to celebrate themselves.
With this in mind, luxury brands are increasingly turning to social media influencers to market their products. Campaigns like these are cropping up all over; Rihanna is seen in Chopard jewels, Keira Knightley sports Chanel cuffs and rings, Tiffany & Co. features Elle Fanning. However, millennial shoppers demand a certain amount of authenticity-- a “cut the bullshit” attitude that has many companies reeling after years of successfully marketing to Boomers. This fact is not lost on David Yurman CMO Carey Krug. “[Influencer marketing] works if it’s authentic,” says Krug. “The millenial and consumers in general can see a pay-for-play endorsement from a mile away.” Influencer campaigns are not solely for the mega-famous; interest in micro- and mid-tier influencers is also gathering steam. 40% of luxury brands show a preference for these more intimate markets over top-tier influencers, and 20% of surveyed responses reflect a desire to follow suit. Connecting with small but devoted audiences is appealing to larger brands, who are facing serious competition from younger fine jewelry sellers like Alison Lou, Jennifer Meyer and Ana Khouri. They must also compete with brands more committed to price-accessibility, like Aurate, Catbird, Wwake and The Last Line, who offer trend-conscious demi-fine jewelry sold exclusively online.
In addition to changing buyer habits, the diamond industry in particular is vulnerable to millenial demand for ethicality. “Conflict diamonds” are a well-known phenomenon, and De Beers notes that “consumers will continue to become more knowledgeable and push for ethical products with known provenance.” There is also growing demand for lab-grown synthetic diamonds, which are more environmentally conscious. The Diamond Producer’s Association, however, is pushing back against “cultivated” diamonds with their “Real is Rare” campaign-- an attempt to declare the intrinsic value of the mined diamonds sold by heritage companies over their synthetic counterparts.
Fine jewelry, which now makes up four-to-five percent of the overall market, is expected to make up 10 percent of it by 2020-- and the jewelry industry seems poised to leap into a social media marketing revolution. Will heritage companies join with their smaller competitors to entice the millenial consumer base, or even give in and capitalize on lab-grown diamonds? We’ll be watching our feeds and waiting to assist with influencer proposals to help grow their CROWD.
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