Consumers in the United States still have a huge taste for diamonds, but demand is falling off among the younger generation, and the market could use an “infusion of excitement,” says a new study on the diamond market conducted by Bain & Co.
The study, “The Global Diamond Industry: Portrait of Growth,” done in cooperation with Antwerp World Diamond Centre, notes that while the American diamond jewelry market “remains huge”—with annual revenues double those of the U.S. mobile phone market—the recession hit the market hard, and total diamond revenues have still not returned to their 2007 peak.
Overall, though, diamond demand remains strong, with the study’s survey finding that 70 percent of engaged or married men in the U.S. bought an engagement ring, though that number has dropped a few points in recent years. Some 70 percent of men said they spent more than $1,000 on their spouse’s engagement ring, and another 30 percent spent more than $5,000. More than half said they spent more than one month’s salary.
The survey also found demand slightly falling off among younger consumers, with women aged 15 to 24 showing the least interest in jewelry. “It is unclear whether this is a temporary phenomenon or a long-term trend, but younger women show a growing preference for other luxury goods, especially consumer electronics,” the survey said.
Overall, the percentage of women wanting jewelry increased with the respondent’s age.
Other noteworthy data points:
- Tiffany & Co. is the most recognized jewelry brand in the United States among jewelry consumers. Zales, Kay Jewelers, and Jared were also mentioned frequently.
- American consumers have mixed feelings about synthetic (lab-grown) diamonds, with most associating them with the words “fake” and “cheap.”
- When American shoppers were asked what matters to them when deciding where to buy diamonds, service quality was ranked first, followed by selection of brands/styles, quality certificates, discounts, locations, and many outlets.
- When asked what matters to them most in choosing a piece of diamond jewelry, American women chose design over cut and clarity. Size came in a fairly distant fourth, ahead of price. However, when selecting engagement rings, size mattered more than other factors.
- About 60 percent of consumers surveyed said they would pay a premium, ranging from 5 percent to 20 percent, for a branded diamond.
Overall, the study agreed with others in predicting that diamond demand will increasingly outpace supply in the coming years, as the Indian and Chinese markets continue to grow.
“The fundamental forces point to a bright outlook for the diamond market,” said Yury Spektorov, Bain & Co. partner and co-author of the report, in a statement.