Wedding boom helps boost jewelry sales
Marc Hostovsky, 31, ended up buying his fiancee’s engagement ring online after being bombarded with targeted social media ads.
Source: Marc Hostovski
Before proposing to his fiancee last fall, Marc Hostovsky spent weeks scouring the internet for information on the “4 C’s” of diamonds – size, clarity, color and carat – and certifications. classification.
The 31-year-old had never made such a big purchase in his life, he said. He wanted the engagement ring to be extra special, of course. And he took it a step further, including contacting the owner of the Rare Carat online jewelry market directly, before committing to purchasing the final product online.
âThe ring was by far the most expensive thing I have ever bought. It was scary,â said Hostovsky, an entrepreneur based in the New York area. “I feel like I’m an expert in buying jewelry now.”
Young consumers, like Hostovsky, are playing a growing role in helping to propel the jewelry category. This is partly because many are thinking or preparing to get married. According to a forecast from The Wedding Report, next year is expected to bring about 2.5 million nuptials, which would mark a high in four decades. Couples will splurge not only on engagement rings, but wedding rings and other accessories for the big day as well.
Meanwhile, other shoppers are looking for ways to show appreciation for a loved one during the pandemic, and jewelry is a great way to do it.
âPeople really love giving lasting gifts that emphasize love and commitment, and especially in times of challenge, which I think everyone can certainly relate to. [right now]”said Beth Gerstein, CEO of jeweler Brilliant Earth.
In the last holiday season, from Oct. 11 to Dec. 24, sales in the jewelry category fell about 4.3%, according to data from Mastercard SpendingPulse. While this is a decline, it is a significantly better performance than sales at clothing retailers and department store chains, SpendingPulse said.
This holiday, however, jewelers expect a much stronger end of the year. During Thanksgiving week, which includes Black Friday but not Cyber ââMonday, jewelry sales are expected to increase 39.7% from last year’s levels, SpendingPulse said. Total retail sales, excluding autos and gasoline, are expected to increase by about 10% over this period.
According to Marie Driscoll, general manager of luxury and fashion at Coresight Research, some consumers were able to accumulate money during the pandemic because they did not spend on travel and other experiences last year. She explained that these consumers put the extra dollars in their bank accounts and could save for ambitious purchases.
“If people still had jobs and worked from home (…) developing this Zoom lifestyle, luxury became a way to celebrate life,” she said. “And one of the best luxury wellness buys is jewelry because there are often stories behind it [it]. “
Younger consumers also claim to care more about sustainability than their elders, Driscoll said, and they are fueling the growth of lab-grown diamonds. More and more jewelry companies are adding eco-friendly options with this in mind and this is helping to develop the category, she said.
A lab-grown diamond is made rather than being mined from the ground. It uses technology that mimics the natural process of diamond growth, but deals less damage to the environment. The stones are also cheaper and offer the guarantee that it is not a so-called blood diamond, which comes from a conflict zone.
âThey have avatars, they live in a virtual world, they live in the metaverse,â Driscoll said of Millennials, a demographic that encompasses 25- to 40-year-olds. “A lab-grown diamond is not as off-putting to someone under 30 as it is to someone over 30. And then there is no problem with the ethics of the diamond.”
De Beers, once a vocal critic of synthetic diamonds, in 2018 launched his own brand of lab-grown diamonds called Lightbox. And Pandora, the jeweler best known for its silver charm bracelets, said earlier this year that it would stop selling mined diamonds and focus on more affordable, durable and lab-grown gemstones.
Meanwhile, Tiffany, now owned by European luxury conglomerate LVMH, began disclosing the country of origin of its diamonds over 0.18 carats last year. The high-end jewelry chain has also used a number of other tactics to reach younger consumers. In April, she started selling her very first engagement ring for men, capitalizing on the rise in same-sex marriages. And he recruited celebrities such as Jay Z and Beyonce to star in his advertising campaigns.
âIf you don’t capture the millennial customer, you put your business model at extreme risk going forward,â said Oliver Chen, retail analyst at Cowen & Co.
Social media at the heart
Brilliant Earth, a jewelry chain founded in San Francisco in 2005, said about 87% of its active consumer base is either Millennials or Gen Z, which includes ages 9 to 24.
According to Gerstein, many Brilliant Earth customers find the brand through social platforms such as Instagram. The company mainly relies on its website to sell engagement rings as well as a wide assortment of lab-grown gemstones. It only has a dozen showrooms where people can try its products in person.
“Social networks have been at the heart of our concerns from the start,” she said. “It’s just the mindset of young consumers.”
Brilliant Earth said its zodiac-inspired jewelry collection is popular with younger consumers and will be one of the top sellers this holiday season.
Source: Shining Earth
The company offers virtual dates on its website and recently launched a gift portal for vacation ideas. Among the items expected to top buyers’ wish lists this year are zodiac-inspired pieces and tennis bracelets, Gerstein said.
âThis generation wants to buy from brands they can happily wear,â she said of millennials.
Brilliant Earth, which listed its shares on Nasdaq on September 23, joins other jewelry chains such as Mejuri, Studs and Kendra Scott that market their businesses online to younger consumers. Some are more focused on everyday pieces than fine jewelry.
David Yurman, a private jewelry chain known for its signature cable bracelet and more upscale pieces, said it is also attracting millennial buyers with its digital marketing efforts that have been amplified in recent months.
âThe brand seems very relevant right now,â said Lee Tucker, head of merchandising and marketing at David Yurman. “We are seeing in our data an influx of new customers to the David Yurman brands, many of whom have joined us during the pandemic through our e-commerce channels.”
Hostovsky said he ended up buying his fiancee’s engagement ring online only because he was bombarded with numerous brand advertisements following his initial diamond inquiries on the internet. He has already started shopping online for another piece of jewelry to give him while on vacation.
“A little of [my fiancee’s] friends who are now considering proposing a marriage contacted me and said, “Where did you get this?” What was your process? ‘”He said.” I had a really good experience. “
– CNBC Melissa Repko contributed to this report.