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THE DIAMOND MARKET

PHYGITAL MARKETING AND SALES STRATEGIES

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‘PHYGITAL’ MARKETING AND SALES STRATEGIES ESSENTIAL
FOR OPTIMAL SUCCESS IN DIAMOND SPACE, SAYS REPORT

 

The indication on Black Friday Adobe Analytics that general retail sales in the United States were outpacing those recorded on the same day of the year both in 2021 and 2019, matched what De Beers research reported in the recent Diamond Insight Report, which indicated an increasing readiness of consumers to purchase diamond jewelry online.

While consumers were known to be using the Internet to research intended diamond purchases before the onset of the before the pandemic, it was lockdowns that sent online buying really into overdrive.

According to the De Beers report, in 2021 online sales of diamond jewelry in the United States held a quarter of the total market in terms of value, and 31 percent by volume. In 2015, the figures had respectively stood at 14 percent and 18 percent.

Unsurprisingly, the research showed, online acquisition was higher among Gen Z acquirers, where they equaled 42 percent of acquisitions; self-purchasers, where online accounted for a 40 percent share, and single women, where 37 percent bought their diamond jewelry online. Some 54 percent of online purchasers in the United States were also first-time buyers.

Still, the average value of pieces purchased online in the United States increased by a significant lower rate than offline purchase. It stood at 17 percent from 2019 to 2021, compared to a 50 percent increase in average value for goods bought the traditional way, in stores.

Share of online diamond jewellery acquisitions in the us

A UNIFIED COMMERCE EXPERIENCE

But the De Beers’ report does not predict the imminent demise of brick-and-mortar shopping. What is more likely to develop, it says, is the growing frequency of what is now being called a “phygital” experience, where the physical and digital blend seamlessly into an all-encompassing shopping experience. With the growing use of the metaverse, this is likely to become even more pronounced.

In 2021, Gartner Futures Lab forecasts a potential increase in total revenues of 20 percent by 2025 for organizations offering a unified commerce experience. The short-term impacts of such an approach, it said,  would be more robust remote customer experience and the creation of new digitally enhanced physical customer environment.

De Beers research confirms that people seeking to acquire natural diamond jewelry increasingly include digital elements in their journey, with 49 percent of all acquisitions researched online compared with around 29 percent in 2015. This compared with 18 percent of pieces are researched by visiting physical jewelry stores, just up from 17 percent six years earlier.

The importance of all jewelry retailers having a strong Internet presence is underscored by the fact that for 16 percent of the jewelry acquired the purchaser even uses an online search to find a jewelry store.

Still, even while 60 percent of shoppers are happy to buy diamonds online without seeing the physical product, 54 percent say that the possibility of seeing the product in-store gives them greater confidence to buy online. This, the De Beers report suggests, implies that a digital-physical strategy is the recipe for optimal success.

AGE A FACTOR IN ‘PHYGITAL’

Age is definitely factor. According to the De Beers report, while 30 percent of all diamond jewelry pieces were purchased online in the United States in 2021, only 4 percent of total purchases were through online-only retailers, but among Gen Z consumers it was 16 percent.

Younger generations tend to use online methods for diamond jewelry research more than older consumers, the report add.  In China, 49 percent of the total pieces acquired by Gen Z consumers were researched online, compared with an average of 39 percent of pieces for all consumers.

Chinese Gen Z consumers are likely to conduct research via social media, using shopping sites and apps less in this respect than Millennials, although American Millennials are the biggest users of online and social media for researching diamond acquisition. Either way, it shows how critical it is for jewelry companies to incorporate social media into their phygital marketing and sales strategies.

Researching and buying diamonds

Gen Z consumers are also likely to use a digital search to preselect a design, the report states, with 23 percent of pieces acquired this way.

Looking to the future of online diamond jewelry sales in the United States, the report noted that 68 percent intend to continue buying diamond jewelry online.

“The proportion of online purchases of diamond jewelry remains much larger than pre-pandemic and is a feature that’s here to stay,” the Diamond Insight Report states. “A compelling, user-friendly and seamlessly integrated omnichannel experience is therefore essential for all diamond jewelry brands and retailers to meet the needs of their end-clients in the new diamond world.”