A wedding boom is helping to drive jewelry sales

31-year-old Marc Hostovsky ended up buying his fiancee’s engagement ring on-line, after he was bombarded with focused social media advertisements.

Source: Marc Hostovsky

Before he proposed to his now-fiancee final fall, Marc Hostovsky spent weeks scouring the web for data across the “4 Cs” of diamonds — lower, readability, coloration and carat — and grading certifications.

The 31-year-old had by no means made such a big buy in his life, he mentioned. He wished the engagement ring to be additional particular, after all. And he went to additional lengths, together with reaching out straight to the proprietor of the e-commerce jewelry market Rare Carat, earlier than he dedicated to buying the ultimate product on-line.

“The ring was by far the most expensive thing I’ve ever bought. It was nerve-racking,” mentioned Hostovsky, an entrepreneur primarily based within the New York City space. “I feel like I’m a jewelry-buying expert now.”

Younger customers, like Hostovsky, are taking part in a rising position in helping to propel the jewelry class. That’s partially as a result of many are both serious about or making ready to get married. According to a forecast by The Wedding Report, subsequent 12 months is anticipated to result in 2.5 million nuptials, which might mark a four-decade excessive. Couples will probably be splurging not solely on engagement rings but additionally on wedding bands and different equipment for the massive day.

Meanwhile, different consumers are in search of methods to present appreciation towards a liked one throughout the pandemic, and jewelry is a good way to do this.

“People really like giving lasting gifts that emphasize love and commitment, and especially during times of challenges, which I think everyone can certainly relate to [right now],” mentioned Beth Gerstein, CEO of jeweler Brilliant Earth.

Last vacation season, from Oct. 11 to Dec. 24, sales within the jewelry class fell about 4.3%, according to data from Mastercard SpendingPulse. Albeit a decline, it was a notably higher displaying than sales at attire retailers and division retailer chains, SpendingPulse mentioned.

This vacation, nevertheless, jewelers predict a a lot stronger end to the 12 months. During the week of Thanksgiving, which incorporates Black Friday however not Cyber Monday, jewelry sales are forecast to develop a whopping 39.7% from year-ago ranges, SpendingPulse said. Total retail sales, excluding autos and gasoline, are predicted to rise about 10% over that time-frame.

‘Feel-good purchases’

According to Marie Driscoll, managing director of luxurious and vogue at Coresight Research, some customers have been in a position to accumulate cash throughout the pandemic since they weren’t spending on journey and different experiences final 12 months. She defined that these customers put the additional {dollars} into their financial institution accounts and have been in a position to save up for aspirational purchases.

“If people still had a job and were working from home … developing this Zoom lifestyle, luxury became a way of celebrating life,” she mentioned. “And one of the best feel-good purchases in luxury is jewelry because there are often stories behind [it].”

Younger customers additionally declare to care extra about sustainability than their elders, Driscoll mentioned, and they’re fueling the expansion of lab-grown diamonds. More jewelry firms are including eco-friendly choices with this in thoughts and it is helping to develop the class, she mentioned.

A lab-grown diamond is manufactured slightly than being mined from the bottom. It makes use of know-how that replicates the pure diamond rising course of however offers much less of a blow to the setting. The stones are additionally cheaper and provide a assure that it isn’t a so-called blood diamond, which comes from a conflict zone.

“They have avatars, they live in a virtual world, they’re living in the metaverse,” Driscoll mentioned of millennials, a demographic that encompasses ages 25 to 40. “A lab-grown diamond is not as off-putting to someone who’s under 30 as it is to someone over 30. And then there’s no problem in terms of the ethics of the diamond.”

De Beers, as soon as an outspoken critic of artificial diamonds, in 2018 launched its personal lab-grown diamond model referred to as Lightbox. And Pandora, the jeweler greatest identified for its silver appeal bracelets, mentioned earlier this 12 months that it would stop selling mined diamonds and deal with extra inexpensive, sustainable and lab-grown gems.

Meanwhile Tiffany, which is now owned by European luxurious conglomerate LVMH, started disclosing final 12 months the country of origin of its diamonds of greater than 0.18 carat. The high-end jewelry chain has employed quite a few different techniques to attain youthful customers, too. In April, it started promoting its first-ever men’s engagement ring, tapping into the rise of same-sex marriages. And it has enlisted celebrities corresponding to Jay Z and Beyonce to star in its advert campaigns.

“If you don’t capture the millennial customer, you put your business model at extreme risk for the future,” mentioned Oliver Chen, a retail analyst at Cowen & Co.

Social media on the core

Brilliant Earth, a jewelry chain based in San Francisco in 2005, mentioned about 87% of its lively client base is both millennial or Gen Z, which incorporates ages 9 to 24.

According to Gerstein, lots of Brilliant Earth’s clients are discovering the model by means of social platforms corresponding to Instagram. The firm depends totally on its web site to promote engagement rings alongside a large assortment of lab-grown gems. It has solely a couple of dozen showrooms the place folks can strive on its merchandise in particular person.

“Social media has been core to us from the beginning,” she mentioned. “It’s just the younger consumer mindset.”

Brilliant Earth mentioned its Zodiac-inspired assortment of jewelry has been in style with youthful customers and will probably be a prime vendor this vacation season.

Source: Brilliant Earth

The firm gives digital appointments on its web site and not too long ago debuted a present portal for vacation concepts. Among the gadgets which might be anticipated to be prime of customers’ want lists this 12 months are zodiac-inspired items and tennis bracelets, mentioned Gerstein.

“This generation wants to buy from brands that they can feel good about wearing,” she mentioned of millennials.

Brilliant Earth, which listed its inventory on the Nasdaq on Sept. 23, joins different jewelry chains corresponding to Mejuri, Studs and Kendra Scott that market their companies towards youthful customers on-line. Some are extra targeted on on a regular basis items slightly than wonderful jewelry.

David Yurman, a privately held jewelry chain identified for its signature cable bracelet and extra high-end items, mentioned it is also luring millennial customers thanks to its amplified digital advertising and marketing efforts in latest months.

“The brand feels very relevant right now,” mentioned Lee Tucker, head of merchandising and advertising and marketing at David Yurman. “We’re seeing in our data an influx of new clients to the David Yurman brands, many of which joined us during the pandemic through our e-commerce channels.”

Hostovsky mentioned he ended up shopping for his fiancee’s engagement ring on-line solely as a result of he was bombarded by so many manufacturers’ advertisements following his preliminary web inquiries about diamonds. He’s already begun procuring round on-line for an additional piece of jewelry to give her over the vacations.

“A few of [my fiancee’s] friends who are now thinking of proposing have reached out to me and been like, ‘Where did you get that? What was your process?'” he mentioned. “I had a really good experience.”

— CNBC’s Melissa Repko contributed to this report.