Every year, strategy consulting firm Bain & Company conducts a study to get the pulse of the diamond market. This year’s sixth annual report highlights current attitudes and behaviors of buying and selling diamonds, interestingly, focusing on the millennials. The study also examines factors that influence rough-diamond production and sales, midstream performance and the overall market demand for diamond jewelry.1
In this post, we’ll go over the major points from the Global Diamond Industry Annual Report, curated by our in-house jewelry experts. Keep reading to learn about the main trends that are impacting the diamond market today.
New attitudes around diamonds in the US
As millennials are poised to walk down the aisle, diamond retailers are tailoring their marketing messages to this demographic. In the fall of 2016, the Diamond Producers Association premiered a new advertising campaign for diamonds called “Real is Rare”. Through an innovative approach, the campaign represents what Forbes describes as “a new take on diamond marketing, in which the fairy tale of ‘A Diamond is Forever’ is replaced by a different kind of story — one that, notably, doesn’t have to end in marriage”.2 The idea behind the campaign is to advertise diamonds to millennials, a demographic that has distressed the diamond industry.
Beyond the engagement ring, diamonds have entered into mainstream jewelry categories as everyday wearable designs that are fun, casual, and fashionable. Women, who are in control of their choices and rewarding themselves personally, are increasingly buying jewelry for themselves. Diamond jewelry continues to rank within the top three gifts that woman prefer to receive. But what’s changed is who is buying it: and the trend seems to point in the direction of self-gifting, and friend to friend, sister to sister gifting. And thus, marketers are shifting their focus from male to female consumers.
Diamond Market Supply Trends
According to Bain & Company fifth annual report on the global diamond industry, a 1% to 2% annual decline in the supply of rough diamonds, in value terms, is expected through 2030. This follows the global trend of rough diamond production volume remaining relatively flat. The largest drop occurred in Africa, as De Beers cut mining output in Botswana several times throughout the year in response to changing market dynamics.3
The global diamond market for new polished diamonds is estimated at approx. $65-$70B and is seen as plateauing and leveling. Meanwhile, the recycling market for diamonds is seen growing to 1/3 of the diamond supply year over year to 2025, with approx. $8-$9B of recycled diamonds coming into the market. This includes inherited, estate and engagement rings from divorcees.
Jewelry Store Trends
In the first half of 2016, major US jewelry retail chains posted flat to negative sales growth. The culprits were an economic slowdown in energy-producing states and a temporary reduction in overall consumer spending, as baby boomers begin to move beyond their peak spending years before millennials reach theirs.
Traditional brick and mortar stores are seeing business challenges. From the jewelry departments within the major retailers, like Macy’s and JCP, to jewelry store chains like Signet Jewelers Ltd. The latter is closing up to 170 underperforming stores during 2017, and focusing its efforts on the online business.4 The digital trend is significant as consumers are mobile and prefer to explore, educate themselves and shop when they want to at any time. With online convenience identified as the top priority for consumers, the jewelry industry is now addressing the customer’s needs by focusing on their online business processes.
Diamond Engagement Ring Trends
With the millennial bride-to-be exploring the latest options as an engagement ring, the top fashion outlooks from The Knot,5 Glamour6 and Refinery 297 are showing more colored stones than ever before. While halo rings have been popular for the past decade, strong center stones with less surrounding smaller ones, are creating a clean and bold look with a twist.
Ethical and Environmental Trends
The diamond sector as a whole keeps taking steps towards raising the standards of the industry. A good example is the Code of Practices Certification by the Responsible Jewellery Council, which applies to all stakeholders of the diamond industry, from mining to retailing. This shows how the industry is developing voluntary standards over and above the Kimberley Process. As the CEO of the Diamond Producers Association, Jean-Marc Lieberherr remarks, “many companies have gone over and beyond these standards and developed their own strict protocols, principles, and confidence programs.”8
Many brands are focusing on adopting ethical, sustainable models and creating a positive change in the diamond business. Tiffany, among others, is taking a leading role in the diamond industry to protect the environment and mine responsible.9
Non-profit organizations are also working on initiatives to promote sustainability. The Diamond Empowerment Fund is a non-profit organization founded in 2007 to support educational initiatives that develop and empower people in diamond communities around the world. The organization is more consumer-facing than ever before with its latest do-good bracelet fundraiser.10
1. The 6th Global Diamond Industry Report, Bain & Company.
2. Bergstein, Rachelle. “What The Diamond Industry’s New Campaign, ‘Real Is Rare,’ Says About Marketing Luxury To Millennials.” Forbes, 19 October, 2016, www.forbes.com/sites/rachellebergstein/2016/10/19/what-real-is-rare-the-diamond-industrys-new-campaign-says-about-marketing-luxury-to-millennials/, accessed 28 March 2017.
3. The 5th Global Diamond Industry Report, Bain & Company.
4. “Signet to Close Stores as Sales Fall Short.” MarketWatch, 9 March 2017, www.marketwatch.com/story/signet-to-close-stores-as-sales-fall-short-2017-03-09, accessed 28 March 2017.
5. Hirshlag, Jennifer. “6 Wedding Jewelry Trends From Fall 2017 Bridal Fashion Week”, The Knot, www.theknot.com/content/wedding-jewelry-trends-2017, accessed 28 March 2017.
6. Fusaro, Kim. “3 Engagement Ring Trends That Will Be Huge In 2017.” Glamour, January 6, 2017, www.glamour.com/story/engagement-ring-trends-that-will-be-huge-in-2017, accessed 28 March 2017.
7. Lowe, Ray. “The 5 New Engagement-Ring Trends Every Cool Bride Should See.” Refinery 29, February 10, 2017, www.refinery29.com/new-engagement-ring-trends, accessed 28 March 2017.
8. Lieberherr, Jean-Marc. “Diamonds Make the World a Better Place.” JCK Online, February 13, 2017, www.jckonline.com/sponsored-content/diamonds-make-the-world-a-better-place, accessed 28 March 2017.
9. Tiffany & Co.
10. Diamond Empowerment Fund.