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How to flog glitter to the young and affluent: A De Beers special report

by Greg Klein | September 14, 2018

Last year’s global market for diamond-encrusted jewelry rose 2.2% to a new high of $82 billion, largely due to the planet’s most populous age groups, says the world’s largest purveyor of the bling. But as “consumer power” shifts from elderly Boomers and middle-aged Generation X to Millennials and Gen Z, manufacturers and retailers must meet a new set of consumer expectations, De Beers’ Diamond Insight Report warns.

Americans again demonstrated the largest demand for diamond jewelry, splurging $43 billion, up 4.2% from the previous year’s $41 billion extravagance in a market that’s expected to show steady growth.

How to flog glitter to the young and affluent: A De Beers special report

(Photo: Matt Crabb/Anglo American)

Looking at diamonds’ pre-jewelry market, rough sales to cutting and polishing facilities rose 2% to $16.6 billion. De Beers claimed 34% of the total, down from its 2016 portion of 37%. Alrosa’s share came to 25%, compared with 27% the previous year. This year’s H1 sales to cutting centres, however, have surpassed the same period in 2017.

Last year’s global production climbed 15% in value to $17.5 billion and 14% in volume to 164 million carats. De Beers took credit for the largest increase of 6.1 million carats, followed by Rio Tinto NYSE:RIO with 3.7 million and Alrosa with 2.3 million carats. The top three diamond mining countries remained Russia, Botswana and Canada.

Forecasts see this year’s global production slipping “due largely to Alrosa’s suspension of operations at the Mir mine and Rio Tinto’s guided fall in production at its operations. Looking further ahead, production is expected to continue falling as new projects and expansions fail to replace lost output from closing mines. By 2025, several large mines will reach the end of their life, while only a few new projects are in the pipeline.”

With the younger consumers’ desire for qualities that diamonds can perfectly embody—including love, connections, authenticity, uniqueness and positive social impact—the most exciting times for the diamond industry are still ahead of us if we can seize the opportunities.—Bruce Cleaver,
De Beers Group CEO

Much of the report focuses on Millennials and Gen Zedders, and why they matter more than those doddering old Boomers and clapped out Gen Exers. Not only are the newcomers more numerous than their predecessors (64% of the planet’s 7.39 billion potential customers) but they’ll soon have more money to splash around. Additionally “they represent more than two-thirds of total diamond jewellery demand value in the four largest diamond-consuming countries,” the U.S., China, India and Japan.

But don’t mistake these affluent upstarts for status-conscious materialists with more money than values, the report emphasizes. Those who would sell to them must recognize four key traits: “Love is meaningful to them in many ways; they are digital natives; they value authenticity, individuality and self-expression; they are engaged with society and social issues.” Indeed, crass marketing’s passé as enlightened purveyors appeal to young adults’ desire for “love, connections, authenticity, uniqueness and positive social impact.”

Still, differences persist between the two groups. Millennials multi-task across two screens and think in 3D. Gen Zedders do that stuff across five screens and in 4D. Now-focused, idealistic and expectant Millennials contrast with future-focused, pragmatic and persistent Gen Z. The divide continues, pitting Millennials’ Harry Potter/armchair activist lifestyle and their team orientation versus Gen Z’s Hunger Games/active volunteer approach credited with collective consciousness.

De Beers doesn’t divulge the methodology for its detailed but seemingly subjective analysis. Buried in the report, however, might be one of the most important traits for a marketing pitch to consider.

Millennials boast an attention span reaching all of 12 seconds, 50% higher than Gen Z’s eight-second feat of endurance.

Related: Could synthetics bring death to diamond mining? Or a kind of reincarnation?

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