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Younger Consumers and The Diamond Jewelry Market

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First generation to grow up online media saturated. Most ethnically diverse generation ever ... Most likely to name a parent as their 'hero' Howe & Strauss, 2005 ... – PowerPoint PPT presentation

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Title: Younger Consumers and The Diamond Jewelry Market


1
Younger Consumers and The Diamond Jewelry Market
  • AGS Conclave
  • Seattle 2008

2
Emmy Kondo, Planning DirectorAnne Valentzas, VP
Marketing

3
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

4
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

5
DER Acquisition Rates ( of brides who receive a
new DER)
75 avg acquisition rate
6
DWB Acquisition Rates ( of brides who receive
new DWB)
56 avg acquisition rate
7
Under 30 Bridal vs WDJPieces
  • Despite strength of bridal in this age group, a
    greater of value still comes from WDJ
  • 52 vs 48

8
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

9
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
10
Characteristics
  • Connected24/7
  • Self-confident
  • Optimistic
  • Hopeful
  • Independent
  • Comfortably self-reliant
  • Determined
  • Goal- and reward-oriented
  • Success-driven

11
Characteristics
  • Lifestyle-centered
  • Diverse
  • Flexible, fluid attitudes
  • Inclusive
  • Global-, civic-, and community-minded
  • Pulling together
  • Service-oriented
  • Tolerant of risk

12
Defining Life Experiences
  • 9-11
  • Columbine High School
  • Enron, WorldCom, etc.
  • War in Iraq
  • Nuclear threat from North Korea
  • Emerging nationsChina, India

13
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
14
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
15
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
16
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
17
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
18
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
19
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
20
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

21
New Gender Dynamics
  • ¾ grew up with working mothers

Source
22
New Gender Dynamics
  • ¾ grew up with working mothers
  • Number of stay-at-home men doubling annually

Source
23
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)

24
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
25
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
26
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
27
  • 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
28
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

29
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
30
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
31
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
32
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
33
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
34
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
35
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
36
Also, highly luxury driven
  • Over-index in spending on, and ownership of,
    luxury brands

37
Democratization of design
  • Style Magpies

A cherry-picking approach to style. Buying
Chanel and also HM
38
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
39
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
40
Play Video
41
(No Transcript)
42
Industry-Specific Data and Insights
43
DJ is a big part of their life, even if they
dont have much now (HHI 50k)
Keep them loving DJ
44
Awareness, Barriers Intent (HHI 50k)
Youth consumer is tuned in
Youth have strongest intent

45
Acquisition (HHI 50k)

46
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

47
Connecting with the Connected
48
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

49
Reaching Youth DigitallyWeb 2.0
  • Cross-Channel Shopping
  • Social Networking

50
Reaching Youth DigitallyWeb 2.0
  • Cross-Channel Shopping
  • Social Networking

51
Cross-Channel Shopping
Definition Shop online, buy offline
  • Consumers demanding new ways of shopping
  • Your shopper is already multichannel

52
Cross-Channel Shopping
  • 92.5 of current online users research products
    and services online.

53
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
54
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
55
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
56
Reaching Youth DigitallyWeb 2.0
  • Cross-Channel Shopping
  • Social Networking

57
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

58
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

59
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

60
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)

61
Harnessing Insights To Produce Value for
Retailers
  • Digital
  • In Store

62
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

63
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)

64
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

65
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!

66
Blogs
  • Use to educate and relate to customers
  • Feature news and information
  • New designs
  • Trends
  • Diamond knowledge
  • Announce contests/promotions
  • About page and photos

67
Blogs
  • Host passionate guest bloggers
  • Designers, Lab experts, Insurance professionals,
    satisfied customers
  • QA
  • Its all about creating a conversation
  • Show your personality!

68
In-Store
69
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

70
Retail-tainment Addicts
  • The ability to play experiment, try on
  • To fantasize Mirrors, lighting
  • To immerse Music, technology, info
  • To discover Continual small changes

71
Interactive Jewelry Display Cases Customers to
try on diamond jewelry without assistance. To
purchase, contact Stuller at 800-877-7777
72
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

73
Customization Is King
  • Create perception that products and/or experience
    are unique for them
  • Trumpet any customization, personalization,
    alteration capabilities

74
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

75
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

76
Thank You!
77
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
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