Inside the Jewelry Industry’s Digital Transformation
- Millennials and Generation Z are vocal in driving changes in the diamond industry to demand better work practices and more sustainable materials in their jewelry.
- Ecommerce and direct-to-consumer sellers are changing the way people shop for diamonds and other jewelry.
- A 2016 Polygon report noted that over 900 North American jewelry stores went out of business in 2015. Omnichannel retail strategies can help retailers pick up the slack.
The fine jewelry industry could be a microcosm of the problems facing retail in general. It’s hard to turn a profit in the face of rising prices for materials and labor, widespread store closures and frequent market fluctuations. A Bain & Company study tells the story of a once thriving industry in fast decline: rough diamond prices have fallen by 23% since May 2014, and polished diamond prices have fallen 12% in the same period. The traditional diamond selling model has become unsustainable.
Jewelry retailers are moving their business to omnichannel experiences and visually-oriented social media platforms such as Instagram to shake off the doldrums of declining diamond sales. A clear sign that the tides are turning in this luxury vertical comes from a McKinsey report: 66% of luxury jewelry shoppers turn to social media to help inform their buying decisions.
Millennials and Generation Z are front and center in changing the course of retail. The diamond market is no different. If you believe the headlines, millennials are dead set on destroying the diamond industry. They’re actually causing industry leaders to pause and consider more positive possibilities to improve their jewelry verticals.
Traditional retail storefront market faces disruption from millennials and Generation Z
The buzzwords used to describe millennials like “engaged, woke and authentic” often obscure the impact from this demographic. They’re driving marketplace change as highly vocal producers and participants, demanding better labor practices and more sustainable materials from their shopping experiences. Retailers who can’t keep up risk losing face — and even worse, losing business.
Fine jewelry sellers are historically slow to migrate their primary business focus from local storefronts to ecommerce websites. Millennials and Generation Z demand more from their shopping experiences, including online and omnichannel buying options. Brands like Burberry, Fendi and Gucci have put a lot of work into their omnichannel approach to reach all possible audiences.
As these businesses develop their brick-and-mortar stores, mobile shopping experiences and social media platforms, they’re finding new and better ways to connect with the key age demographics that will drive sales well into the 21st century.
Millennials and Generation Z seek social commitments from diamond sellers
An article in Green Matters points out the high cost of the sparkling diamond rings at the jewelry store: not just in dollars, but also in unethical labor practices and sketchy business practices. The diamond industry is ripe for social change.
Millennials and Generation Z lead the charge on social issues, especially in retail and shopping. These generations take time and care to determine the sustainability of the products they buy, and they often refuse to support activities that do more harm than good to people, animals or the environment.
According to a BizWomen report, about 75% of millennials shop with the environment in mind, and this demographic reports a greater willingness to pay more for products with ingredients that are sustainable or socially responsible products.
Retailers should expect that millennials and Generation Z will do their homework to find ethically mined and cruelty-free diamonds and other fine jewelry before committing to a new buying relationship. Here’s how you can keep up with their demands.
Love, romance and sustainable jewelry
Generation Z and millennials figured out the marketing ploy driving diamond (and other fine jewelry) sales: the old messages come from companies trying to sell expensive engagement rings featuring unsustainable diamonds. The skepticism for corporate speak can’t diminish the romantic notions attached to the idea of “a diamond is forever.” The younger crowd now demands proof that the sustainable diamond industry— like their love — truly can stand the test of time.
Let the romantic marriage proposals continue unabated. The new sustainable gemstone industry provides the alternative millennials and Generation Z shoppers are looking for.
Here are some sparkling examples of sustainable (and more affordable) diamond choices:
- Synthetic diamonds. Also known as lab-created diamonds, synthetic diamonds require no mining. They contain the same physical, chemical and characteristics of real diamonds — and they cost 42% less. Fine jewelry retailer Brilliant Earth takes the responsibility ethos one step beyond offering synthetic gemstones. Brilliant Earth is also committed to environmental responsibility and human development. All while serving up the kind of personalized, omnichannel experience the younger generations have come to expect.
- Recycled diamonds. Jewelers can recut or reset a family heirloom or another repurposed diamond to fit a more modern ring band and setting. While this option can’t address the ethical sourcing issue of the original diamond, it stops the cycle of unsustainable practices. FTJCo offers recycled gemstones with custom jewelry options that emphasize re-using a customer’s existing jewels, alongside responsibly sourced minerals with fair trade practices in mind. They’re also setting the tone for a customized online shopping experience, which will get and keep the attention of younger generations looking for an alternative to traditional jewelery retail.
Generation Z and millennials can still participate in romantic traditions while also respecting their core values by shunning unethical and inhumane practices. Ethically-minded jewelry retailers that understand how to balance a higher standard of values with a personalized direct-to-consumer buying experience will win the hearts of love-struck millennials and Generation Z shoppers looking to seal their commitments until the end of time.
Sustainability maintains staying power
Sometimes, finding the one you want to spend the rest of your life with is the hardest thing to do. The next hardest thing is finding the right ring to give to the person when you ask them to spend the rest of their life with you. Retailers like My Trio Rings understand the magnitude of this choice — both in choosing the right person and the right ring. That’s why My Trio Rings’ direct-to-consumer, online shopping experience covers all the bases for the younger generations: sustainable business practices with ethical sourcing, jewelry for same-sex couples and competitive pricing with layaway and split payment options.
Diamond sellers must adjust to the ever-changing marketplace by remaining flexible and serving their target market’s needs. When jewelry retailers actively provide attractive alternatives to the traditional diamond industry, they can ensure that their diamonds — and their customers — truly are forever.
Photo courtesy of iStock Photo
If you have questions about how to succeed in fine jewelry and watches ecommerce sales, contact Signifyd to chat. We’re here to answer your questions about revenue optimization, digital transformation and more.
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