Rapaport Magazine - June 2020

VOL.43 NO.6 JUNE 2020

SP

T H IG

T LN O

WHAT DO TODAY'S YOUNG WHAT DO PEOPLEYOUNG WANT IN TODAY’S JEWELRY, AND IN HOW PEOPLE WANT CAN WE GIVE IT JEWELRY, AND HOW TO THEM?

CAN WE GIVE IT TO THEM?

REFLECTIONS SOME THINGS NEVER GET OLD: VINTAGE-STYLE DIAMOND CUTS ARE BACK IN FASHION

R E TAI L

ST Y LE

DESI GNER

ADVICE FROM THE EXPERTS ON HOW TO BUILD A GREAT WEBSITE FOR YOUR STORE

THE TOP TRENDS IN THIS YEAR’S SWISS WATCH OFFERINGS

MEET THE RISING TALENTS WHOSE CREATIONS SHOULD HAVE DEBUTED IN VEGAS

CONTENTS VOL. 43 NO. 6 JUNE 2020

44 PAGE

IN-DEPTH

RETAIL

8 NEWS

24 RETAIL PROFILE

A new natural diamond voice; Back to business, but keep your distance; Inventory-rich Alrosa slashes production.

Online retailer Gem Breakfast is eschewing the “highfalutin” messaging of traditional jewelers for an experience millennials can sink their teeth into.

COVER

12 GROWING UP WITH GEN Z

Marketing to the under-25 crowd is a challenge, but companies that can serve up accessible, relatable products via digital media will have the best chance of tapping into this demographic.

16 FIRST-PERSON

26 RETAILRAP Top tips on how to create a stellar website.

30 PAGE

STYLE & DESIGN

28 JEWELRY CONNOISSEUR Men and women alike are rocking the single-earring trend on the red carpet.

30 STYLE Swiss watch brands overcame obstacles this year by deciding to debut their 2020 models digitally. Here’s a look at some of the trends.

34 DESIGNER These 16 up-and-coming talents were supposed to showcase their works for the first time at the Couture show in Las Vegas.

MARKETS & PRICING 47 TRADE REPORT Industry inches toward recovery.

PERSPECTIVE

40 LEGACY

What do today’s young adults think about diamonds? Three Gen Z-ers weigh in.

John Nels Hatleberg creates precise replicas of the world’s most iconic diamonds — and once made a line of chocolates shaped like the Hope.

48 USA

Teens are looking for ways to mark milestones now that proms, graduations and other seminal events have been canceled. Jewelers should be stepping up.

43 ESTATE JEWELS

55 HONG KONG

Specialist Jeff Russak explains the finer points of selling branded vs. non-branded pieces.

56 DIAMOND DATA

22 REFLECTIONS

GEMSTONE

78 DIRECTORY

Lapis lazuli, mother-of-pearl and malachite are a few of the popular alternatives to the Big Three.

82 CALENDAR

19 FILLING THE GENERATION GAP

Old-style diamond cuts are seeing a resurgence among those who desire a distinctive elegance.

2 JUNE 2020

DIAMONDS.NET

44 COLORED

52 INDIA 53 ISRAEL 54 ANTWERP

61 PRICE LIST 73 RAPNET PRICE LIST

84 THE FINAL CUT

N OTE FROM TH E P U B L I SHE R

O N S I LV E R L I N I N G S A N D LO C K D OW N S

John Costello PUBLISHER

IMAGE: BEN KELMER

J O H N .COST E L LO @ D IA M ON DS.NET

T

he sweeping views along the bay are breathtaking. The cool blue of the sea; the razor-thin strip of yellow sand; the rolling green expanses, blossoming across the land until they meet the foothills of the grey-blue mountains in the distance. This is the view along the coast from Dalkey, a small village in Ireland, where actor Matt Damon found himself in lockdown during the COVID-19 outbreak.

The jet-setting Hollywood star had been about to film there when the pandemic struck.

“In the lockdown, they say you have to stay within 2 kilometers of your house,” he told a local radio station during his time in this idyllic setting. “I mean, within 2 kilometers from here, there’s trees, there’s forests, woods and ocean. I can’t think of any place [else] you would want to be during a lockdown.”

However, it was Damon’s interactions in a local coffee shop that showed how both businesses and consumers can find a silver lining in this changed reality.

“There was a lovely coffee place that stayed open, and I was talking to the barista who works there,” said Damon. “And you know, you stand 2 meters apart and only one person at a time goes into the shop and orders a coffee. And she said, which I found very interesting because I used to work a counter for one of my first jobs, that ‘normally the place is buzzing, and I actually have gotten to know all of my customers because they each come in for three to five minutes and we chat.’ And she’s like, ‘Normally, I see them all. These are all the faces I know, but now I actually know all these people. I know their families and I know what is going on with them.’”

This is something all businesses should cherish as we reopen our doors — this unique opportunity to build deeper, more personal and engaging relationships with each of our customers.

DIAMONDS.NET

JUNE 2020 7

COVER

G ROW I N G U P W I T H

Marketing to the under-25 crowd is a challenge, but companies that can serve up accessible, relatable products via digital media will have the best chance of tapping into this demographic.

B Y R AC H A E L TAY L O R 18 JUNE 12 MAY 2020 2020

DD I AI A MM OO NN DD S .SN. N ET ET

espite all the nights of lost sleep over whether millennials will still want to buy diamond jewelry, it turns out this group is not so dissimilar to previous generations. Generation Z, though — now aging into relevance — is a different beast entirely.

The World Gold Council (WGC) interviewed 18,000 consumers across the globe for its Gold Retail Market Insights 2019 report, including members of Gen Z — those born in 1995 or later, who will represent 40% of global spending power by the end of this year, according to analysts at McKinsey & Company. When asked if they intended to buy gold jewelry in the next 12 months, only 11% of 18- to 22-year-olds in the US said yes.

“Gold jewelry suffers from some perceptual misgivings among the youngest audience,” reads the WGC report. “It faces particular challenges around style and a lack of emotional connection with Gen Z consumers. They have bought, and intend to buy, significantly less gold jewelry than their parents.”

While this is a disheartening read for fine jewelers, it’s worth noting the subject group’s age. Not many teens have the budget to buy gold jewels, after all, but they very well may once they become adults.

IMAGE: SHUTTERSTOCK IMAGES: SHUTTERSTOCK

“They want to be fluid. One thing today, and tomorrow, maybe, something different”

They’re still interested New York designer Marla Aaron — known for her customizable line of precious “locks” that mimic climbers’ carabiners — is more positive about the prospects for Gen Z. She is one of only a few luxury jewelers that already have a confident foothold in the market, and in her opinion, “young people are as into jewelry as any generation.”

The secret to her success is the Baby Lock. While her jewels can retail for up to $75,000, she also has an entry-level silver design for $85. This is what has drawn in the Gen Z crowd, she says, particularly in the south at stores such as Cicada and Maison Weiss in Mississippi, and ETC in Birmingham, Alabama.

Here, teens as young as 13 are discovering Marla Aaron online and buying in, often graduating to diamond-set versions as they grow older.

“I think they love the convertibility of it,” says Aaron, who consciously avoids using models in her photography so as not to pigeonhole the brand to a particular age group.

The Diamond Producers Association (DPA) has also been researching Gen Z’s attitude toward jewels, holding 12 focus groups with 13- to 18-yearolds across the US. While it found that diamond

Carolina Bucci Forte Beads rainbow bracelet with flower beads.

jewelry made teenagers feel “confident,” and that they considered it more special than other types of jewelry, there was a “but”: With malls full of diamond designs and many of their older family members owning diamonds, teens struggle with the “rarity” marketing message.

The more authentic, the better Authenticity is a concept tightly linked to this generation. Gen Z-ers are looking for it in all things: They want ethical product provenance, social responsibility, diversity acceptance, financial stability (having learned from the recession that rocked their parents), and trustworthy, relatable businesses. Indeed, Aaron points to her brand’s authenticity as a reason for its success, noting that “we are very unvarnished on Instagram and in our communication with our customers.”

This means much of the current diamond jewelry marketing won’t land with Gen Z — the illusion of rarity, the perfectly polished models, the luxury status symbols, the complicated ethical messages.

Ripping up these tropes and starting over is the direction that Clemence Devaux and other members of the Young Diamantaires group — which started in 2016 at the World Diamond Congress in Dubai — are advocating.

“We are actively trying to rebuild the oldfashioned diamond industry,” says the 31-year-old ▶

40%

Gen Z, born in 1995 or later, will represent 40% of global spending power by the end of this year, according to McKinsey & Company

DIAMONDS.NET

JUNE 2020 13

COVER

Parisian, who launched minimalist diamond brand NYF Jewellery with her 22-year-old Gen Z brother.

“It has not been truthful, transparent. We always have Gen Z in mind and how we connect with them.”

She believes the diamond industry should lay all the facts of mining bare — the good, the bad and the ugly — and simply allow Gen Z-ers to make up their own minds, without preaching to them.

“I think the reason I might have avoided jewelry in the past is that it can feel quite aged [or] irrelevant to me,” says Holly Friend, a 26-yearold writer and youth expert based in London.

“Perhaps this is the association with luxury and precious metals, which I don’t care so much about.

Under-styled marketing is key, as I value simplicity when it comes to jewelry and accessories. Any campaigns that feature real people — or relatable, approachable models — would also attract me, as I associate jewelry marketing with icy-looking supermodels.”

‘Diversity in all its forms’ Diversity has been creeping into jewelry marketing.

Brands like Blue Nile and Taylor & Hart have run same-sex ad campaigns. Tiffany & Co.’s “I Take You, Until Forever” campaign celebrates varied types of commitment, not just marriage. Jewelers including Chanel and Swarovski are addressing race with box-ticking black-white-Asian model trios, while designers such as Fernando Jorge, Shaun Leane and Julien Riad Sahyoun have launched genderless jewelry collections. But has it gone far enough?

“Gen Z is most probably the most genderaware and gender-diverse population in human history,” writes Jonathan Kendall, president of the World Jewellery Confederation (CIBJO)’s Marketing and Education Commission, in a paper titled “Deconstructing the Next Great JewelleryConsuming Generation.” He stresses that “members of Gen Z don’t want to be classified. They want to be fluid. One thing today, and tomorrow, maybe, something different.”

Jewelry marketing should “celebrate diversity in all its forms” by using models who vary in size, shape, color, age and clothing style, Kendall advises. “The more you reflect the melting pot of life, the better.

And the models do not need to be perfect. Indeed, in general, perfection is considered to be artificial.”

From WhatsApp to TikTok The report dedicates much of its focus to the online segment. Gen Z-ers are digital natives who have never known life before the internet, and while research has shown that this consumer group enjoys brick-and-mortar retail experiences, online is where jewelers need to capture their attention. Kendall recommends engagement on social media apps 14 JUNE 2020

DIAMONDS.NET

Shay Dot-Dash diamond hoops.

“Any campaigns that feature real people... would also attract me, as I associate jewelry marketing with icylooking supermodels”

like WhatsApp, as retailer Threads Styling has successfully done (see box); WeChat, which brands such as Bulgari and Cartier have used to win over Asian shoppers; and Instagram, which has revolutionized direct-to-consumer sales.

However, it is video-sharing platform TikTok where the real potential lies.

The TikTok app has been downloaded 2 billion times — 165 million in the US alone — and currently has 800 million active users, who seem to have a keen interest in jewelry. Posts on TikTok with the hashtag #jewelry already have 1.1 billion views and counting; #jewellery has an additional 315 million views. The subjects of these short videos vary, ranging from jewelry making and cleaning demonstrations to testing the authenticity of heirloom jewels, unboxing engagement rings, and celebrity jewel round-ups.

Most of these are set to energetic pop soundtracks.

While some brands are harnessing TikTok, it is a relatively underutilized space for jewelers and is therefore an opportunity for early adopters. About 40% of TikTok users are between the ages of 16 and 24, but the number of older users tuning in has skyrocketed, particularly in the US. A penchant for simplicity What’s selling within this consumer group? Outside of Gen Z luxury hotspots like Threads Styling, this generation generally isn’t financially mature enough for what fine jewelry has to offer — but it will be, and soon.

Marla Aaron Stoned Large Lock with diamonds.

Self-purchasing among under-35s has increased from 21% to 30% since 2013, according to De Beers Group’s 2019 Diamond Insight Report, with diamond necklaces, bracelets, halo earrings and stud drops growing in popularity. The DPA’s Gen Z research ranked earrings as the most popular diamond jewelry category for teens, followed by necklaces, then rings and bracelets (the focus group members described the latter two as impractical).

It also showed a leaning toward “classic” white gold and “on-trend” rose gold, shunning the yellow gold that has exploded in popularity among millennials.

What Devaux at NYF Jewellery has learned through trial and error is that Gen Z-ers want simplicity. “I don’t think they are thinking Elizabeth Taylor is their idol,” she says — and indeed, the DPA research identified singer Rihanna as the number-one jewelry style icon for this age group.

“They want something they can wear all the time without worrying, and as soon as they come into some money, [they] want to put their money into something that will last.”

Of course, Gen Z is still evolving, both in its fluid attitude toward everything from sex to style, and in its changing relationship to luxury jewelry as its members get older. As CIBJO’s Kendall advises in his report: “If you really want to keep up...it might be best to have a 20-year-old mentor. In today’s disruptive environment, turning mentoring upside down might be the one way to keep your finger on the pulse of the market.” ◼

IMAGES: SHUTTERSTOCK

NYF Jewellery campaign.

30%

Self-purchasing among people under 35 has increased from 21% to 30% since 2013, according to De Beers’ 2019 Diamond Insight Report

SELLING

BY SOCI AL

I

t has no shops, no transactional website, no app. Yet luxury retailer Threads Styling is arguably the hottest retail concept out there. With an army of personal shoppers making sales of branded luxury fashion and accessories via WhatsApp, it is geared toward a younger clientele and gets a boost from its vibrant social media presence. Tech-savvy shoppers in 100 countries have been snapping up the 300 brands it hypes on Instagram and Snapchat, with sales rising 75% in 2019. The personal relationships Threads has cultivated with its following also give it a keen understanding of younger luxury consumers.

It has launched a new channel, @threadsgen, which focuses on the under-25s with “luxury fashion, streetwear & drops.” Here are three Gen Z-friendly jewelers that feature on that channel.

CAROLINA BU CC I Carolina Bucci’s Forte Beads — beads of hard stone such as tiger’s eye, turquoise, rhodonite and rock crystal — are the perfect blend of playful and luxe. Strung onto bracelets or necklaces, they have a childlike charm; indeed, the inspiration behind them was Bucci’s childhood seaside holidays. But the materials, which include textured 18-karat gold charms, elevate the concept. Forte Beads are available either as ready-made bracelets — some designed by fashionistas including Man Repeller’s Leandra Medine Cohen and M Missoni’s Margherita Missoni — or in a DIY box. The latter contains a selection of beads and a signature Carolina Bucci lurex cord tipped with gold.

F RY POWER S “Unicorn rainbow stacking rings” is how New York brand Fry Powers touts its super-bright enamel and silver jewels. With price points mostly under $300, its rainbow-hued rings and ear cuffs — which the brand likes to intersperse with diamond-set jewels — are accessible and pack an aesthetic punch. Pricier pieces include gold rings with heart-cut colored gems. Fry Powers also has a strong ethical message: All its jewels are handmade in New York, and the brand encourages clients to send in their preowned pearls, promising to “turn them into magic.”

SHAY Streetwear and athleisure are key product categories for Gen Z shoppers, and nothing adds a tough-luxe edge to these looks like a stack of curb-link chain jewels. Few do this as well as mother-daughter duo Ladan and Tania Shayan, founders of cross-generational brand Shay in Los Angeles, California. Their 18-karat gold and diamond designs can be stacked, layered, mixed and matched for what their website calls “a jewelry wardrobe that seamlessly transitions from coffee to meetings to a night on the town” — or in this generation’s case, from TikTok to a socially responsible restaurant. instagram.com/threadsstyling DIAMONDS.NET

JUNE 2020 15

COVER

FAC T S FIGURES AND

$143 b Consumers between the ages of 15 and 25 were expected to spend an estimated $143 billion in 2019, according to a World Jewellery Confederation (CIBJO) report.

9 The average luxury consumer in the 16-to-34 age bracket owns nine luxury fashion items from the accessories, apparel and footwear categories, according to a recent report by NPD Group and Stylitics.

85 % ONLY 6% OF MILLENNIALS AND GEN Z-ERS SURVEYED

BY LUXURY FASHION SITE HIGHSNOBIETY LAST YEAR PURCHASED HIGH-END GOODS OUT OF A DESIRE TO EXPRESS WEALTH, WHILE 85% BELIEVED IN THE BRAND’S IDEALS AND AUTHENTICITY.

China

67 %

FASHIONABLE DESIGNS ARE IMPORTANT TO 67% OF GEN Z-ERS, VISION CRITICAL HAS FOUND.

8 s e co n d s

The average Gen Z attention span is eight seconds — four seconds shorter than that of millennials — according to research by Vision Critical.

CONSUMERS BETWEEN THE AGES OF 18 AND 30 MAKE UP 42% OF CHINA’S LUXURY SALES, RESEARCH FIRM GARTNER REPORTED LAST YEAR

Nearly half of US “postmillennials” — 48% of six- to 21-year-olds — are racial or ethnic minorities, according to recent data from the Pew Research Center, making them the most diverse generation yet.

CHINESE GEN Z-ERS ARE THE “SEGMENT TO WATCH,” ACCORDING TO BAIN & COMPANY. THEY’RE PROUD, EMPOWERED IMPULSE BUYERS, WHICH MAKES THEM A SIGNIFICANT SPENDING FORCE.

66% OF GENERATION Z CONSUMERS SAY PRODUCT QUALITY IS A TOP CONSIDERATION FOR THEM WHEN MAKING A PURCHASE, REPORTS THE IBM INSTITUTE FOR BUSINESS VALUE.

Q u i c k a n d co n v e n i e n t Gen Z shoppers are heavily influenced by social media and buy impulsively. They want quick and convenient: If delivery times are too long, they will look elsewhere. These were among the findings in a recent report by consumer research firm Accenture.

DIAMONDS.NET

AUTHENTICITY & EXPERIENCE

Gen Z-ers want “an interactive and personalized approach focused on authentic, original brand stories,” according to Luxe Digital.

They’re less interested in the product itself than in how it can impact their lives.

JUNE 2020 21