One luxury category that marketers have worried about is diamonds. Some experts predicted that demand for precious gems would never return to pre-recession levels. Others have pointed out that younger consumers aren’t interested in diamonds. New research shows that the diamond market is strong and that the gems are near the top of the list of desired gifts.
Currently in the U.S., at least 80% of consumers in lower income households own at least one diamond. In the higher income households, ownership is nearly ubiquitous at 95%. A Bain study on the diamond industry reveals that diamond jewelry is third on the list of most desired gifts on the part of U.S. women. The gem falls behind only cash and holidays/travel. Despite changing times, there are still about 2 million weddings annually in this country. About 71% of the engagements that precede these weddings are sealed with the gift of a diamond ring.
Women tend to receive their first diamond either for engagement (25%) or a birthday (25%). Subsequent giving events include Valentine’s Day, wedding anniversaries, or the birth of a child. With up to half of men spending $2,500 on an engagement ring, the revenue value for retailers is huge.
Consumers say they consider the following features, in order of declining importance, when determining where to purchase a diamond:
- Service quality
- Selection of brands and styles
- Quality certificates
In the U.S., the diamond market is valued at $27 billion and specialty chains spend as much as $333 million a year promoting the gem.
While younger consumers may not be quite as interested in diamonds, women with household incomes exceeding $75,000 and who are between the ages of 35 and 55 comprise a big market for diamond sellers. Advertising to these consumers, who will then tell their significant others what to buy, can generate new sales in this traditional category.
Reps have plenty of time to share these details with local accounts before Valentine’s Day and through the spring.
[Source: Spektorov et al. Global Diamond Industry. Bain.com. 12 Dec. 2012. Web. 21 Jan. 2013]