As Americans cope with the ongoing toll of COVID-19, jewelers should focus on holiday marketing that resonates emotionally, De Beers said, after it surveyed U.S. consumers on how the pandemic has affected their holiday buying plans.
According to Stephen Lussier, De Beers executive vice president, consumer and brands, his company has found a consistent pattern during and after recessions—self-purchase and fashion jewelry sales wane, while sales commemorating engagements, weddings, and other personal milestones gain market share. But even though the current situation is very different from past downturns—given there’s also a global pandemic involved—its market research has found that pattern is likely to hold.
Among De Beers’ findings in its “Diamond Insight Flash Report #1,” which can be seen here:
– De Beers research found that living in lockdown made consumers grateful for things they sometimes took for granted, particularly their family—and they want gifts to express that gratitude. When considering what to buy this holiday, 56% of respondents felt presents should be “meaningful,” as opposed to “practical,” “functional,” or “fun.”
“People have had to re-bond with those who are closest to them,” says Lussier. “We aren’t in this world where everybody is racing everywhere. There are a lot of people you went through this experience with that you might now want to express something symbolically to. It’s our task as an industry to unlock that, because diamonds are the perfect product for doing that.”
He believes the industry needs to pivot away from fashion-oriented product—at least for the moment—toward a message that taps into what consumers have learned from this experience.
“It’s probably not the time to be too clever with our marketing message. Consumers are not looking for super-high fashion. They’re looking for a more timeless classic type of product. Think about things that are more lasting and more symbolic and more classic.”
But, he adds, that doesn’t mean the industry should talk about these traditional products in a traditional manner.
“We need to communicate in a contemporary way,” he says. “These relationships aren’t just husband and wife. We need to recognize that there are relationships with grandparents, siblings, best friends.”
That likely means de-emphasizing self-purchase, though Lussier still sees that as an important potential growth market for the industry.
“Self-purchase remains a huge opportunity for the diamond sector and actually a crucial one. But this holiday, I just think that our opportunity is bigger in the more traditional areas.”
De Beers has found that self-purchase has done well in China but isn’t sure that will be replicated elsewhere.
“The month of May was spectacularly good for global brands in China. We saw a lot of young women just going out and buying themselves a kind of self-reward for having existed through the lockdown. They thought, ‘I deserve something for my sacrifice.’ So, I think luxury and jewelry companies benefited from that. But I think that is more of an Asian phenomenon. In America, the average self-purchaser is a married career woman.”
– An impressive 90% of respondents said that “choosing gifts that hold their value over time” would be important this holiday.
“We always talk about lasting value,” Lussier says. “That doesn’t mean investment value per se, but it means buying things that will be with you for a long time. If you think about the luxury-goods world, that’s why you see Hermès doing better than some of the more fashion-oriented brands. It’s about buying things that are lasting.”
Lussier feels that’s connected to consumers’ desire for meaningful gifts.
“You don’t tend to give meaningful things that disappear in a year. It’s hard to find meaningful things that don’t have enduring value. Generally, the two things go hand in hand.”
– The survey also found that 45% said they were likely to buy “fewer, better things” this holiday—which, not coincidentally, was the tagline of an ad campaign De Beers ran following the 2008 financial crisis.
“I think this reflects this idea that we need to be wiser and more reflective about how we spend money and show a little appreciation for all that people have done for us during this period,” Lussier says.
– As to where consumers planned to buy these meaningful gifts, most said they still felt safest buying diamond jewelry online. However, they also ranked independent jewelers highest in product knowledge and quality and thought that independents were the safest physical store to visit.
“Online has certainly been growing strongly through this period, but that’s a trend one has to be careful about whether to project out,” says Lussier. “You also have to look at how safe people feel in different environments. Do you feel safer in a smaller environment than you do in a big shopping mall or a big department store? We have all had the experience of going into a little neighborhood shop up the street, and you feel much more secure in those environments than when you’re packed in a big place with crowds inside. So it does present something of an opportunity for independents.”
One other notable trend: Shopping has become much more deliberate.
“People are doing a lot of their prepurchasing work in advance. There’s been a lot of technology that’s come out over the last month or so where people connect directly through apps. It’s hard to imagine people going into a store just to look. They go in with the intent of purchasing in advance. I think the connection between the in-store world and digital world will blur even more over the next few months.”
– People were feeling a little better about the long-term economic outlook. Yet only 47% of respondents felt optimistic about their financial situation over the next six months.
“There was clearly concern about their economic well-being,” says Lussier. “So, there is certainly some short-term or maybe even medium-term fear about economics.”
At the same time, two-thirds of the consumers polled indicated their personal finances have not been affected by COVID-19. That is in line with surveys that showed that, in spite of the ailing economy, personal income has risen—thanks to government interventions, such as the extra $600 offered in unemployment and stimulus checks.
“I think the government programs have been so aggressive that they were able to hold off some of the impact [of the lockdown],” says Lussier. “That has dulled a lot of the short-term stock. In the U.K., I think the government is paying over a third of all salaries. So, while people are nervous about their financial future, they weren’t in this state of high anxiety that we would have expected. There’s no doubt that’s a good thing, but I think there’s a concern of what will happen once we’re weaned off [the government support].”
– The survey also found that 39% of respondents said they wouldn’t travel again for the next seven to 12 months, which Lussier says may help the jewelry business.
“Travel has been quite a significant competitor for us, particularly for anniversaries. We have an opportunity to take significant market share from that.”
Lussier cautions that attitudes may be different by the time we get to the holiday season, since events are changing so rapidly.
“I don’t know how big the discretionary expenditure will be because of the economics,” he says. “No one has a crystal ball in this world today. I’ve never seen such a volatile stock market in my life. You almost don’t want to look at it.”
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