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A marketing campaign aimed at millennials will be unveiled to press and industry tomorrow to try and convert a sceptical, cash-poor generation into long-term buyers of diamonds. Its creators hope it will be as effective as De Beers’ “A Diamond Is Forever” was in capturing the hearts and dollars of earlier generations.
The objectives of the campaign, created by the Diamond Producers Association, are clear. “We want to forge a deep and durable connection with the millennial consumer,” says Jean-Marc Lieberherr, chief executive of the DPA, formed last year by seven mining companies including Alrosa, De Beers and Rio Tinto. “They are the future of the category.”
Millennials are already considerable buyers of diamond jewellery, according to De Beers. In a US market worth $39bn, they account for 41 per cent of sales, the same as Generation Xers (those born from the early 1960s to the early 1980s).
They do not yet have anything like the spending power of yet-older baby boomers, however. This group born between 1946 and 1964 will have spending power of $15tn by 2020, according to Euromonitor, whereas millennials will have $1.4tn by the same date, say consultants Accenture. There are 75.4m millennials in the US, according to the Pew Research Center, which defines them as people aged 18-34 in 2015, compared with 74.9m baby boomers.
The diamond industry sees a need to start winning over millennials now. “It’s a numbers game,” says Marshal Cohen, chief industry analyst at market research company NPD Group. “A campaign like this is overdue and is critical for the industry’s future.”
The DPA is not expecting immediate results. Whether it is speculating about new mines or developing markets, “we are used to taking a very long-term view”, says Stephen Lussier, the DPA’s chairman and chief executive of Forevermark, the De Beers division for responsibly-sourced diamonds.
With an initial budget of $18m over three years, the campaign, whose details were still being finalised when this report went to press, will consist primarily of video advertising on digital platforms including YouTube, pay TV and social media channels.
Thomai Serdari, a luxury marketing strategist, agrees that this kind of multi-layered approach is key to successfully engaging with millennials. “Brands need to create a story that feels authentic to a consumer who has been overexposed to traditional advertising messages,” she says. She singles out Hermès as one of the few luxury brands effectively using digital platforms in this way. “On Instagram they create beautiful, playful vignettes that aren’t overtly sales-driven,” she says.
Jewellers Tiffany & Co have announced that they have developed a “filter” for Snapchat, an app popular with millennials which allows people to send doctored photos to one another. This filter adds sparkle to photos and lets users “try on” a Tiffany ring.
For Mr Cohen, selling diamonds to millennials is also a question of adjusting the product offering for consumers who have less to spend than their parents, and a more casual approach to wearing jewellery. The adjustment might include using smaller stones and putting less emphasis on the “four Cs” of diamond evaluation: cut, colour, clarity, carat weight.
Forging a lasting emotional connection with today’s consumer, says Mr Lussier, is no different from 1947, when the “Diamond Is Forever” campaign was created. De Beers retained the copyline — named by industry publication Advertising Age as the 20th century’s top slogan — until around 2009.
The market research driving the new campaign reflects millennials’ wholly different approach to life, careers and relationships compared with previous generations.
With more experience of divorce, and having grown up through a technological revolution, where superficial relationships via social media are the norm, they are getting married later, if at all, research shows.
They are also comfortable forging their own paths, rejecting social conventions if they do not resonate personally. These include engagement rings and anniversary gifts, which were formerly the focus of diamond marketing. “The campaign is about shifting perceptions from diamonds commemorating specific milestones and social rituals to them marking genuine moments that are chosen by the individual,” says Mr Lieberherr.
“Their approach to life is a real challenge to the diamond industry,” says Ms Serdari, suggesting that 18- to 34-year-olds value experiences, such as Instagram-able rock concerts and exotic holidays, over material goods. “The trick is for diamonds to become more of a lifestyle aspiration than a product-driven one,” she adds.
This is exactly what the DPA is hoping to achieve by plugging into what it believes is the research’s key discovery: millennials’ enduring need to seek deep, lasting connections with others. “While they are living more and more in a virtual world, they are craving authenticity and sincerity in their relationships more than ever,” says Mr Lieberherr.
Given a saturation of advertising aimed at millennials, the DPA’s work is cut out. But success is worth striving for, Mr Lieberherr adds: “If we can connect with the millennial generation here in the US, in a few years they’ll become the biggest diamond consumers in the world.”