Younger Consumers and The Diamond Jewelry Market

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Younger Consumers and The Diamond Jewelry Market

• AGS Conclave
• Seattle 2008

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Emmy Kondo, Planning DirectorAnne Valentzas, VP
Marketing

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Agenda

• Bridal Market
• Who Is Gen Y?
• Size of population
• Spending power
• Cohort characteristics
• Industry-specific market data and insights
• The Power Of Digital In Their Lives
• Harnessing Insights To Produce Value for Retailers

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Bridal Market

• Wedding industry is considered recession-proof
• -New DER acquisition in line with historical
  levels 75 of brides receive one
• Retro-values (with a twist) -make them most
  marriage-interested young generation in decades

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DER Acquisition Rates ( of brides who receive a
new DER)
75 avg acquisition rate
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DWB Acquisition Rates ( of brides who receive
new DWB)
56 avg acquisition rate
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Under 30 Bridal vs WDJPieces

• Despite strength of bridal in this age group, a
  greater of value still comes from WDJ
• 52 vs 48

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What Theyre Called

• Generation Y
• Generation WHY
• Generation Next
• Nexters
• Millennials
• Digital Generation
• Echo Boomers
• Boomlets
• Baby Busters
• I Generation
• Net Generation
• Netizens
• Gaming Generation

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Who Are They?

• Born approx. 1978 to 1993 (ages 15 to 30)
• Roughly 26 of population
• 77 million children of Baby Boomers
• Largest generation after Boomers
• 80mm Boomers, 40mm Gen Xers
• Positioned in history to be next Hero
  generation
• Raised in affluent times
• First generation to grow up online media
  saturated
• Most ethnically diverse generation ever
• Spending power exceeds 200 billion

Sources American Demographics, U.S. Census
Bureau, USA TODAY
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Characteristics

• Connected24/7
• Self-confident
• Optimistic
• Hopeful
• Independent
• Comfortably self-reliant
• Determined
• Goal- and reward-oriented
• Success-driven

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Characteristics

• Lifestyle-centered
• Diverse
• Flexible, fluid attitudes
• Inclusive
• Global-, civic-, and community-minded
• Pulling together
• Service-oriented
• Tolerant of risk

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Defining Life Experiences

• 9-11
• Columbine High School
• Enron, WorldCom, etc.
• War in Iraq
• Nuclear threat from North Korea
• Emerging nationsChina, India

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Seven Core Traits

• Gen Y differentiated by being
• 1. Special Raised in child-centered homes.
  Central focus

Millennials Go to College (2003), Neil Howe and
William Strauss
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Seven Core Traits

• Gen Y differentiated by being
• 1. Special Raised in child-centered homes.
  Central focus
• 2. Sheltered V-chips, babyproofing, helicopter
  parenting

Millennials Go to College (2003), Neil Howe and
William Strauss
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Seven Core Traits

• Gen Y differentiated by being
• 1. Special Raised in child-centered homes.
  Central focus
• 2. Sheltered V-chips, babyproofing, helicopter
  parenting
• 3. Confident unprecedented confidence in future
  success

Millennials Go to College (2003), Neil Howe and
William Strauss
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Seven Core Traits

• Gen Y differentiated by being
• 1. Special Raised in child-centered homes.
  Central focus
• 2. Sheltered V-chips, babyproofing, helicopter
  parenting
• 3. Confident unprecedented confidence in future
  success
• 4. Team-Oriented display strong acceptance of a
  group orientation

Millennials Go to College (2003), Neil Howe and
William Strauss
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Seven Core Traits

• Gen Y differentiated by being
• 1. Special Raised in child-centered homes.
  Central focus
• 2. Sheltered V-chips, babyproofing, helicopter
  parenting
• 3. Confident unprecedented confidence in future
  success
• 4. Team-Oriented display strong acceptance of a
  group orientation
• 5. Conventional lack youth inclination of
  previous two
• generations to break the rules

Millennials Go to College (2003), Neil Howe and
William Strauss
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Seven Core Traits

• Gen Y differentiated by being
• 1. Special Raised in child-centered homes.
  Central focus
• 2. Sheltered V-chips, babyproofing, helicopter
  parenting
• 3. Confident unprecedented confidence in future
  success
• 4. Team-Oriented display strong acceptance of a
  group orientation
• 5. Conventional lack youth inclination of
  previous two
• generations to break the rules
• 6. Pressured grew up monitored and scheduled

Millennials Go to College (2003), Neil Howe and
William Strauss
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Seven Core Traits

• Gen Y differentiated by being
• 1. Special Raised in child-centered homes.
  Central focus
• 2. Sheltered V-chips, babyproofing, helicopter
  parenting
• 3. Confident unprecedented confidence in future
  success
• 4. Team-Oriented display strong acceptance of a
  group orientation
• 5. Conventional lack youth inclination of
  previous two
• generations to break the rules
• 6. Pressured grew up monitored and scheduled
• 7. Achieving-seriously concerned about
  educational achievement, employment prospects,
  salaries as early as high school

Millennials Go to College (2003), Neil Howe and
William Strauss
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Individualistic, In Subtler Ways

• Individualistic but group-oriented
• Social networks like MySpace let them assert
  uniqueness
• Individualistic but not rebellious
• Want to be themselves, not be against others
• Individualistic but cautious
• Look for social consensus instead of pushing
  limits

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New Gender Dynamics

• ¾ grew up with working mothers

Source
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New Gender Dynamics

• ¾ grew up with working mothers
• Number of stay-at-home men doubling annually

Source
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New Gender Dynamics

• ¾ grew up with working mothers
• Number of stay-at-home men doubling annually
• More women work in management and professional
  jobs (37 v. 31 in 2005)

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New Gender Dynamics

• ¾ grew up with working mothers
• Number of stay-at-home men doubling annually
• More women work in management and professional
  jobs (37 v. 31 in 2005).
• Salaries of females in 20s surpassed mens in
  major urban centers in past 7 years
• By 20 in Dallas, 17 NY

Reuters 8/30/07, Research by Dept. of
Sociology, Queens College
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New Gender Dynamics

• 2006 was educational tipping point more women
  than men graduating from college
• Today, ratio of women v. men is 43
• In 2017, it will be 32, and rising

National Center for Education Statistics
Census Bureau
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Lyrics Independent Women
How you feel about a girl like this Try to
control me, boy you'll get dismissed Do what I
want, live how I wanna live Buy my own diamonds,
and I pay my own bills -Beyonce, 2001
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• Women Mean Business

Every day 420 women start their own businesses,
twice the rate at which men do so. Women are
leaving the corporate fold primarily because they
need more control over their lives. -Margaret
Heffernan, Forbes, 2006
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Soft Empowerment

• More choosing to stay at home and raise children
  kitchen-table entrepreneurs and retro-moms
• Feel entitled to make choices that bring
  fulfillment
• A generation where equality isnt a question
• Im not a feminist
• Household CEOs No guilt about treating
  selves, indulgent purchases

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Teens Less Family Angst

• 90 of teens now say they get along with
  their parents
• nearly 80 say very well or extremely well

Howe Strauss, 2005
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Teens Less Family Angst

• 90 of teens now say they get along with
  their parents
• nearly 80 say very well or extremely well
• 82 report no problems with any family member
  vs. 48 in 1974

Howe Strauss, 2005
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Teens Less Family Angst

• 90 of teens now say they get along with
  their parents
• nearly 80 say very well or extremely well
• 82 report no problems with any family member
  vs. 48 in 1974
• Most likely to name a parent as their hero

Howe Strauss, 2005
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Most Socially Conscious Consumers To Date

• 61 of 13-25 year-olds feel personally
  responsible for making a difference in the world

Higher Education Research Institute at UCLA 2005
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Most Socially Conscious Consumers To Date

• 61 of 13-25 year-olds feel personally
  responsible for making a difference in the world
• 81 have volunteered in past year

2005 survey of 263,710 students at 385 schools,
Higher Education Research Institute at UCLA
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Most Socially Conscious Consumers To Date

• 61 of 13-25 year-olds feel personally
  responsible for making a difference in the world
• 81 have volunteered in past year
• 69 consider a stores social and environmental
  commitment when deciding where to shop

2005 survey of 263,710 students at 385 schools,
Higher Education Research Institute at UCLA
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Most Socially Conscious Consumers To Date

• 61 of 13-25 year-olds feel personally
  responsible for making a difference in the world
• 81 have volunteered in past year
• 69 consider a stores social and environmental
  commitment when deciding where to shop
• 83 trust a company more if perceived as
  socially/environmentally responsible

2005 survey of 263,710 students at 385 schools,
Higher Education Research Institute at UCLA
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Also, highly luxury driven

• Over-index in spending on, and ownership of,
  luxury brands

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Democratization of design

• Style Magpies

A cherry-picking approach to style. Buying
Chanel and also HM
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Born To Shop?

• According to Baylor University research, 10 of
  this generation can be classified as clinically
  compulsive buyers
• Vs. 1-3 of Boomers, 5 of Gen Xers

Futurist, 2004
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Born To Shop?

• A 2004 survey asked marketers who work in youth
  fields to compare Millennials to the same age
  young people 10-15 years ago
• 91 consider them more powerful as consumers
• 84 say theyre more demanding as consumers

Harris Interactive and Kid Power Xchange, 2004
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Play Video
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(No Transcript)
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Industry-Specific Data and Insights
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DJ is a big part of their life, even if they
dont have much now (HHI 50k)
Keep them loving DJ
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Awareness, Barriers Intent (HHI 50k)
Youth consumer is tuned in
Youth have strongest intent

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Acquisition (HHI 50k)

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Appeal To Both Teens and Parents

• Parents Are Key Gifters
• Heavy Owners are significantly more likely to
  have acquired 1st piece as a gift from parents

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Connecting with the Connected
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Born at the Keyboard

• Millennials are focused on a digital and
  tech-rich lifestyle
• 10 hours online weekly30 minutes on mobile phone
  daily6-10 text messages per day
• Never experienced life without computers
• All information is a click away so is your
  competition

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Reaching Youth DigitallyWeb 2.0

• Cross-Channel Shopping
• Social Networking

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Reaching Youth DigitallyWeb 2.0

• Cross-Channel Shopping
• Social Networking

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Cross-Channel Shopping
Definition Shop online, buy offline

• Consumers demanding new ways of shopping
• Your shopper is already multichannel

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Cross-Channel Shopping

• 92.5 of current online users research products
  and services online.

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Cross-Channel Shopping

• Cross-channel sales will outpace eCommerce growth
  at a 17 rate versus 13 from 2007 to 2012

Sales amount shown as US billions
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Cross-Channel Shopping

• More often complex high-ticket categories
• Reasons for offline purchase is immediacy
• 45 of these consumers buy additional products
  once in the store
• Spend on average 154 in incremental purchases.

The Webs Impact On In-store Sales US Cross
Channel Sales Forecast 2006-2012, Tamara
Mendelsohn, Forrester, June 1, 2007
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Cross-Channel Shopping Top Categories
The Webs Impact On In-store Sales US Cross
Channel Sales Forecast 2006-2012, Tamara
Mendelsohn, Forrester, June 1, 2007
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Reaching Youth DigitallyWeb 2.0

• Cross-Channel Shopping
• Social Networking

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Social Networking
Definition Linking people to each other in some
way

• Social Media has come on fast and it now exceeds
  search in terms of activity and popularity.
• Example Facebook
• Two approaches to consider
• User-Generated Reviews
• Blogs

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User-Generated Reviews
Definition Facilities for site visitors to add
comments

• Examples
• Yelp or City Search
• 6 percent of customers say they believe
  advertising claims, yet more than half said that
  the recommendations of others changed their
  purchase plans.
• Source Forrester

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Blogs
Definition Short for Weblog, a personal online
journal that is frequently updated and intended
for general public consumption

• There are more than 100 million blogs online,
  with an estimated 13 million actively updated

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Benefits of Blogging

• Elevates status as an expert in the field
• Cements relationships with customers
• Improved Search results
• Search engines (Google in particular) love blogs
• 80 of internet usage begins with search
• Affordable (as little as 6.95 per month hosting)
• Requires time (should post at least once per
  week)

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Harnessing Insights To Produce Value for
Retailers

• Digital
• In Store

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What Kind of Web Content? The Basics

• Store address, phone number, hours of operation
• Sampling of designs offered
• Price
• Same online as in store
• Store background
• Owners
• Years in business
• Unique point of difference
• 4Cs
• Return policy, special amenities, ethics policies

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What Kind of Web Content?Beyond the Basics

• Entertain me
• Video
• Popularity of YouTube
• Post videos of customers getting engaged,
  in-store events, TV ads (Spot Runner?), how
  jewelry is made
• Custom design (DYO)

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What Kind of Web Content?Beyond the Basics

• Consumer Voting
• Allow consumers to review designs
• Guides gifters
• Vote on favorite design each month
• On sale the next month
• Before acquiring inventory, to minimize risk
• Rate the in-store shopping experience
• Risky, but worth it!
• Boasts good experiences, but also provides
  learning to improve poor experience

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What Kind of Web Content?Beyond the Basics

• Partner with relevant websites to create mutual
  links
• Lean on your suppliersPictures? Links?
  Microsites?
• Visit other luxury websites for inspiration!

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Blogs

• Use to educate and relate to customers
• Feature news and information
• New designs
• Trends
• Diamond knowledge
• Announce contests/promotions
• About page and photos

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Blogs

• Host passionate guest bloggers
• Designers, Lab experts, Insurance professionals,
  satisfied customers
• QA
• Its all about creating a conversation
• Show your personality!

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In-Store
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Keep It Real

• Value fairness and ethical behavior, also
  skeptical
• Authenticity Key value
• Want full disclosure transparency
• Ensure all employees can discuss KP, SoW, good
  diamonds do for Africa
• Reference diamondfacts.org for employees AND
  customers
• Visit Promoting Your Reputation microsite at
  dps.org

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Retail-tainment Addicts

• The ability to play experiment, try on
• To fantasize Mirrors, lighting
• To immerse Music, technology, info
• To discover Continual small changes

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Interactive Jewelry Display Cases Customers to
try on diamond jewelry without assistance. To
purchase, contact Stuller at 800-877-7777
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The Right Product Mix

• Most design-conscious generation ever
• Desirable design ranges, price ranges, brands are
  key
• Remember trend merchandising rule 10-20 is all
  it takes

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Customization Is King

• Create perception that products and/or experience
  are unique for them
• Trumpet any customization, personalization,
  alteration capabilities

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Engage With Women

• Brides often foot at least half the DER bill
• Determine/influence purchase in roughly 2/3 of
  WDJ transactions
• Will self-purchase DJ for personal milestones
• And on impulse design drives desire
• The true competition v. other luxuries
• Dont skip specs, technical info, pricing
• Key Sales Training, associates who can connect

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Never Forget Teens

• Start by priming parents
• Remember Very influential for this generation
• Talk about milestones, lifetime value of DJ
  staples
• Remind Diamonds love and forever
• Communicate same messages to teens, plus
• Show them role models to make DJ fresh, on trend
  celeb or popular/high-achieving local teens

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Thank You!
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Resources

• Creating a Blog
• Independent Hosting Companies
• Typepad.com
• Blogger.com
• WordPress.com
• LiveJournal.com
• Host yourself and use software
• WordPress
• Movable Type
• TextPattern
• Expression Engine