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Can Old-School Fine Jewelry Brands Woo Fickle Millennials?

Faced with shifting shopping habits and new competitors, heritage luxury jewelry companies are scrambling to get younger customers.
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Olivia Wilde plays ping pong at the new TiffanyBlue Box Cafe. Photo: BFA

Olivia Wilde plays ping pong at the new TiffanyBlue Box Cafe. Photo: BFA

Heritage luxury fashion brands have been pretty slow to get on board with digital. But in the past couple of years, several fashion companies have worked hard to get their acts together: Houses like Burberry and Gucci have been particularly successful in engaging people on social media and delivering seamless e-commerce experiences, while Dolce & Gabbana and Fendi have made plenty of targeted efforts as well. Now, another group is trying to figure this out: Luxury heritage fine jewelry companies, whose images are perhaps even more tied up in a concept of exclusivity and legacy than fashion brands.

As a whole, the jewelry market is healthy: It's expected to grow at a rate of five-to-six percent per year over the next three years, and fine jewelry, which now makes up four-to-five percent of the overall market, is expected to make up 10 percent of it by 2020. And yet, some of the industry's most storied brands have been struggling — and will continue to struggle if they don't capture the attention of the 18-to-34-year-olds who are set to become "the most important cohort for diamond jewellery purchases" according to an in-depth 2016 study on the diamond industry by DeBeers. And with increased competition from fashion brands and newer jewelry companies as millennials near their maximum earning potential, it won't be easy.

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Tiffany & Co., for instance, saw net sales decline 3 percent and comparable sales decline 5 percent in fiscal 2016; so far in 2017, things have improved slightly with comparable sales down 1 percent. Despite being considered one of the most iconic brands, period, let alone in fine jewelry, Tiffany has struggled to attract younger shoppers, and it's not alone, because when you look at what millennials care about and how they tend to shop, heritage fine jewelry companies have traditionally embodied the opposite; they cater to those who shop in-store, for engagement or marriage-related gifts, and choose brands based on status. Millennials are not about that life. In a report on the luxury jewelry and watches category from earlier this year, L2 wrote: "Watches and jewelry brands must arm themselves with the right tools and strategies to win in the new digital world or run the risk of losing the brand equity that took decades to build."

The New Jewelry Shopper

"Traditionally fine jewelry would be given as gifts, but I think there's much more of a move towards self gifting," explains Ella Hudson, Senior Editor, Accessories & Footwear at WGSN, adding, "The challenge is appealing to this younger consumer who does have that disposable income that [is] not necessarily buying status in the same way those brands have traditionally depended on. Younger consumers are more concerned with expressing individuality." DeBeers also pointed out the rise of female self-purchasers in its study: "As women in the U.S. continue to make gains in the labour force, the self-purchase trend offers one of the clearest opportunities for future growth. Having a selection of diamond jewellery which appeals to the woman looking to celebrate a personal milestone, or to buy something special to reward herself, should become as much a focus for jewellers as bridal and other relationship milestone-related jewellery," it notes.

And where previous generations purchased things to connote status, millennials care more about self-expression, preferring to align themselves with a brand or style they feel represents them, rather than say, the latest Tiffany T or Elsa Peretti line. DeBeers found an "increase in the proportion of people acquiring diamonds simply because they like a particular design," concluding, "Combined with trends of single women acquisition, self-purchase and the younger woman’s desire for self-expression, design appeal is expected to become more important in attracting new and repeat customers to the category."

And on top of who's shopping and what they're looking for, the way in which millennials shop is also, as we've covered, different. Long treated as a purely in-person purchase, fine jewelry is increasingly being shopped for online, even if the final purchase takes place in a store. "They will often compare prices online, search for product information and look for discount coupons and promotions online," notes the DeBeers study, referring to millennial shoppers. 

Tiffany & Co.: A Case Study

Aware of its troubles, Tiffany & Co. has spent the past couple of years aggressively going after millennials and shifting its retail and marketing efforts to appeal to modern jewelry shoppers, and it's starting to pay off. L2 ranked it number one in its watches & jewelry "digital IQ" index this year, taking into consideration its aptitude with its site, digital marketing, social media and mobile.

Last spring, it embarked on an unprecedented partnership with Net-a-Porter to sell a selection of styles online, making Net-a-Porter the first retailer to sell Tiffany online outside of its own channels and greatly expanding the number of countries with access to the brand. "Tiffany has been a renowned house of luxury for 179 years, and brand collaborations with innovative businesses like Net-a-Porter help ensure that Tiffany's timeless designs reach a new generation of customers, wherever they are,” said Philippe Galtie, senior vice president of international sales at Tiffany & Co, in a statement at the time. Tiffany also sells through (and advertises on) Editorialist, a luxury accessories-focused e-commerce site and online magazine.

Last summer, the brand tapped celebrity faces for the first time to market a more affordable collection, and went onto launch a number of celebrity- and influencer-driven campaigns with various components for print, online and social media starring people that would presumably appeal to a young, modern consumer, like Elle Fanning, Lady Gaga and Zoe Kravitz. It's also tapped millennial favorite Alexa Chung to host events. According to Preen.Me, an online strategy and influencer marketing firm, the Lady Gaga partnership was its most successful celebrity partnership, garnering 827,493 likes and comments.

Alexa Chung at the opening of a Tiffany & Co. boutique at Selfridges. Photo: Nicky J Sims/Getty Images for Tiffany & Co.

Alexa Chung at the opening of a Tiffany & Co. boutique at Selfridges. Photo: Nicky J Sims/Getty Images for Tiffany & Co.

When millennial-focused branding and digital marketing agency Metier Creative began working with Tiffany & Co., the jewelry brand's goal was to shift its perception as a gifting brand to a self-purchasing brand that millennials would be interested in, founder Erin Kleinberg and Stacie Brockman explain. "The millennial set had a storied history of knowing Tiffany as a bat mitzvah gift or when they had a baby," says Brockman. "It was about reinventing their business so it wasn't thought of as just a sterling silver business." They describe their role as that of "cool hunters," helping the brand align with the right influencers, taking into consideration more than just follower and engagement numbers. One examples was Kelly Oxford, an author, activist and social media influencer whose connection to Tiffany felt authentic, Kleinberg and Brockman say, because she genuinely loves the brand and goes to a lot of red-carpet events but isn't "too celebrity."

Last month, Tiffany & Co. opened the Blue Box Cafe in its New York flagship, inviting a group of influencers and celebrities to promote the opening of the highly 'grammable space, which is, of course, covered in the brand's signature hue.

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Influencer and Celebrity Marketing

David Yurman's fairly new CMO Carey Krug is also discerning when it comes to influencers. "It works if it's authentic," she says. "We have a lot of influential people that love and wear our brand and it's a matter of making those partnerships better; thats the only way it will work. The millennial and consumers in general can see a pay-for-play endorsement from a mile away." (Speaking of digital savvy, David Yurman also recently launched a Facebook chatbot.)

Influencer campaigns, big and small, can be seen across the fine jewelry landscape. You might find Danielle Bernstein of We Wore What shilling a Forevermark diamond piece, Christie Tyler of NYC Bambi sporting an array of DeBeers baubles or, on a bigger scale, Rihanna and Bella Hadid hosting events for and posting sultry Instagram photos in Chopard and Bulgari jewels, respectively. Preen.Me found that Hadid generated nearly 2.2 million likes and comments for Bulgari this year. Rihanna also embarked on a collaboration with Chopard, pictured below.

Alison Levy, CMO at Launchmetrics, emphasized the effectiveness of events when it comes to promoting jewelry, using Chopard's Cannes Film Festival sponsorship as an example of a "more natural" environment for "more exclusive brands" to activate. By comparison, gifting is less of a viable strategy. "When you think of fine jewelry, it's so expensive to do gifting, you don't know how likely the influencer is to wear your product if your'e not paying for play," she says.

The Competition

While these brands figure out what works on the influencer marketing front, they face competition from all directions. There are the growing plethora of cool, young jewelry brands that are still high-end, like Gaia Repossi, Alison Lou, Delfina Delettrez, Monique Péan, Ana Khouri, Foundrae, Jennifer Meyer and Maria Tash; as well as an emerging category called "demi-fine" that offers more accessible entry price points, thereby appealing to younger consumers. 

"Fine jewelry brands are evolving faster and creating new collections more often to appeal to a younger customer. They are also attuned to addressing trends more such as stacking of rings or dressing the ears with ear cuffs and creepers," explains Elizabeth von der Goltz, Global Buying Director at Net-a-Porter, which has been at the forefront of online jewelry retail. "We have developed and grown a demi-fine department that is mainly 14K gold and diamond trend product at more accessible prices. The demi-fine category includes trends and allows our customers to access them at a more affordable price point." 

Brands include Catbird, Grace Lee, Wwake and more. A recent crop of direct-to-consumer fine jewelry brands would also likely qualify as demi-fine. These brands, like The Last Line, Kinn and Aurate, are literally using social media as their launch pads and only selling online while these older brands struggle to reposition themselves and get a handle on digital marketing. Editorialist also sells fine jewelry online — according to Business of Fashion, the category makes up half of its sales.

Another oft-discussed millennial trait is caring about a brand's social responsibility, which comes into play in a unique way with diamonds, which can often be sourced in ethically murky ways. According to the DeBeers study, more than a fifth of U.S. engagement-ring shoppers cared about the responsible sourcing of diamonds 2015, and this is especially important to millennials. "Consumers will continue to become more knowledgeable and push for ethical products with known provenance," the study notes. "These observations point to the need for coordinated actions across the diamond industry to ensure full visibility of diamond provenance." 

Newer startup brands have been much better about transparency than older brands, regarding everything from pricing to sourcing. Another trend that some brands hope will appeal to environmentally conscious millennials, and that could also pose a real threat to the diamond industry, is lab-grown diamonds. A Silicon Valley-based producer of these stones, Diamond Foundry, recently acquired direct-to-consumer brand Vrai & Oro, which has been expanding rapidly, offering relatively affordable, lab-grown diamond engagement rings among other products and preaching about their sustainable production.

Already, the (mined) diamond industry seems to have organized its counterattack on the lab-grown phenomenon. This year, the Diamond Producers Association — which, according to its website "aims to encourage best practice and sustainability across the industry and to protect the integrity of the diamond" — launched a marketing initiative called, "Real is rare. Real is a diamond," the sentiment of which is pretty self-explanatory.

Clearly, the traditional fine jewelry world is not afraid to tackle its competition head-on, and it has the resources to do so. This space is also likely poised for a branding revolution with smaller brands ripe for acquisition by bigger companies. Suffice it to say, this is only the beginning of a radical shift in fine jewelry branding. Will Kith x Tiffany or Cartier x Supreme be next? We wouldn't be too surprised.

Homepage photo: @badgalriri/Instagram

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