Demand for diamond jewelry could increase as consumers turn away from travel as a result of the coronavirus pandemic, according to a new study.
De Beers Group recently released the third instalment in its Diamond Insight Flash Report series, which looks at the consumer perspective in the U.S. and how it continues to evolve as the country deals with COVID-19.
The latest report includes a focus on consumer discretionary spend, including the potential for diamonds to capture luxury market share in light of the current reduction in travel spending. Travel has been the key competitor to diamond jewelry in recent years, particularly among millennials.
The report is available here.
The research, conducted among 500 Americans aged 18 and above, found that 44% of consumers had more disposable cash due to the cancellation of travel, dining or other experiences during the year. When it came to travel specifically, more than two-thirds of Americans had canceled travel plans for 2020 and of those, 55% found themselves with extra money as a result. In the absence of travel, one in eight consumers said they would instead choose diamonds to mark a special occasion.
The report also looks at how consumer confidence has changed since De Beers Group started the research in March. While consumer confidence was relatively fragile on the whole compared with previous research waves – largely due to the increased spread of the virus and uncertainty regarding the upcoming presidential election – the latest research found that almost half (46%) of consumers had an optimistic outlook on life overall for the next three months. More than 60% said the pandemic had not affected their personal finances. In addition, 46% said their jewelry spending was back to normal, with a further 25% expecting it would normalize in the next six months.
“As some consumers find themselves with additional discretionary income as a result of spend in other areas such as travel being cancelled, there is potential they will allocate this to alternative purchases, creating something of a unique opportunity for diamonds,” said Bruce Cleaver, CEO, De Beers Group. “As a product that can be both experiential and meaningful, diamonds fill the temporary void left by travel in the way few other luxury products can. Diamond marketing themes that highlight these attributes are likely to be particularly well received by consumers who have additional money to spend due to their lack of spend on travel, and are looking to create a special gifting experience this holiday.”