How to Tap the Diamond Buying Potential of Millennials
“Millennials shop in a very next generation way for things like cars or tablets. But buying a diamond engagement ring is a tradition-bound, emotional purchase, which makes it unique. So Millennials’ shopping process becomes blended – 50 percent is ‘new age’ and 50 percent is tradition.” Rich Pesqueira, Vice President Sales and Business Development, Hearts On Fire
For each succeeding generation, or at least since 1947 when DeBeers’ told consumers that “A Diamond Is Forever,” buying an engagement ring has been a rite of passage in adulthood. Today’s prime target market for diamonds and bridal jewelry are the Millennials, the leading edge of which turns 35 this year. Yet shopping for that diamond in a jewelry store today is not all that different from the way it was for their parents’ Baby Boomer generation in the 70s and 80s or their grandparents’ generation in the 50s and 60s. Even in the best-of-the-best jewelry stores – whether it is Tiffany’s or Cartier’s or the local family-owned jewelers down the block – jewelry stores are more similar than different. They are caught in a time warp.
And to make matters worse for the diamond buyers, they have to do a significant amount of research before they even dare to approach the retail counter to look at rings and stones. Like their grandfather and father before them, today’s Millennial diamond buyer must get indoctrinated into the mysteries of the 4Cs used to grade diamonds – carat, cut, clarity and color. The whole diamond buying experience, while it should be a joy that celebrates the coming wedding, can be such an ordeal for the customers that it can turn them off from crossing the threshold of a jewelry store ever again.
The traditional, and largely negative, jewelry-shopping experience gave online retailer Blue Nile an‘in’ to disrupt the diamond engagement ring business. Blue Nile plays to the strengths of computer technology to catalog its massive collection of diamonds’ 4C ratings and let the buyer compare the specifications of each side-by-side, along with the price. The net/net is that Blue Nile, just like the traditional jewelers before them, have made customers think that the only difference between one rock and another is to be found on the specs sheet – how it measures on the 4Cs grading scale. Thus the Blue Nile process of shopping for and buying a diamond engagement ring largely becomes a left-brain, rational decision, like the one used to buy a television, a lawnmower or a power drill. Nonetheless, Blue Nile, is successful as an exclusively online retailer, designed for and appealing to how the Millennial generation seemingly prefers to shop.
But let’s face it. A rational, left-brain perspective for buying a diamond engagement ring makes no sense at all. At its heart, buying a diamond engagement ring is a totally emotional decision. So the left-brain-dominated jewelry retailing strategy, especially perpetuated by brands like Blue Nile, is disconnected from customers’ ultimate romantic intentions.
Blue Nile gets disrupted!
Seeing the disconnect between the rational focus of diamond shopping with the customers’ emotional intentions, Hearts On Fire (HOF) founders’ Glenn and Susan Rothman recognized the opportunity to transform the entire diamond retailing process around its customers’ emotional needs. At the time, Hearts On Fire was already a well-established diamond jewelry marketer, with its brand positioning “The World’s Most Perfectly Cut Diamond.” Because of the HOF unique cutting process and the company’s careful attention to the quality of the uncut stone, a customer doesn’t need to read the specs for a diamond they are considering; all the have to do is see it and fall in love with it.
“Our diamonds are remarkably brighter and more lively,” explains Rich Pesqueira, Hearts On Fire’s vice president of sales and business development. “Our diamonds are cut to play with the light so it has the perfect balance of intense white reflections and beautiful rainbows. The magical, mystical property of the HOF diamond are especially noticeable in low light environments, like a candlelit restaurant. Customers tell us that they’ve had strangers come up to them and ask about their ring. They have never seen a diamond act so differently. That is the life of our brand.”
Selling the Hearts On Fire diamond, while it can be and is being done online, really requires that the customer have a literal hands-on experience, to touch, feel and see the diamond ring in different lighting conditions and at different distances. While the company has extended its reach though over 500 independent specialty jewelry retailers in more than 30 countries and supported those retailers with extensive sales training, including a bi-annual Hearts On Fire University, the Rothmans decided that the brand needed a totally new way to tell the customers the story of the Hearts On Fire diamonds and to show them how truly unique and different they are.
They needed a Hearts On Fire jewelry store experience as different as the HOF diamonds were. So in 2012, the company opened its first Hearts On Fire concept store in Las Vegas at The Forum Shops and expanded to the east coast with a store next to Neiman Marcus and across the way from Tiffany’s at the King of Prussia Mall, outside of Philadelphia. That is where I experienced the transformed jewelry retail HOF experience firsthand.
Everything about the Hearts On Fire store says this is not your ordinary, everyday jewelry store. It starts with the sheer curtains that hang on the inside windows and the studied use of shade and lighting to create a mood inside the store. There are no overhead florescent lights in the store, but area lighting that the store’s staff can control depending upon the lighting needs and feelings they want to create for the customers. The store features several full length mirrors that give customers the chance to model the jewelry they try on from head-to-toe. And because Millennials largely shop for bridal jewelry as a couple, according to Pesqueira, there is a separated quiet area with a couch where couples can retreat in order to discuss this most important of purchases.
Most distinctive, however, there is not a long glass-fronted jewelry display case to be found. Rather there are eye-level ‘Jewel Box’ display cases that spotlight a carefully curated selection of designs that guide the customers’ eye to each special piece, reminiscent of a museum rather than a store with row-after-row of look-alike jewelry with which we all are familiar. Access to the Jewel Boxes is from the front, not the back, as Pesqueira explains, “It’s the biggest principle in our retail concept. It creates a collaborative environment where the sales person and the customer work side-by-side to experience the beauty of perfectly-cut diamonds together, as opposed to the traditional model where you have sales person on one side of the counter and the customer on the other. We wanted to change the entire texture of the way that contact takes place.”
To top off the totally different jewelry shopping experience, each HOF store has an Apple-esque high-tech edge with keyless access to the Jewel Box cases and a ‘Knowledge Wall’ that digitally displays information about the brand, the diamond cutting process that creates the brilliance in the Hearts On Fire diamonds, and models and celebrities wearing its distinctive pieces.
Technology enhances the customer’s emotional experience of HOF diamonds
Hearts On Fire in-store experience resonates on many different emotional levels aimed to enhance the customers’ total experience of the diamonds. It shifts the focus from the traditional diamond 4Cs spec sheet to how the diamond comes alive in their hands with technology that actually enhances the customers’ emotional experience. Much of that technology is used in subtle ways to control the environment of the store and how the customer sees and experiences the diamonds. Yes, there are computer screens on display and yes, the customer gets a high-tech vibe upon entering the store, but the essence of how HOF uses technology is to enhance the customer’s interaction with the jewelry. The ‘medium becomes the message’ is an apt description.
By reimaging what jewelry shopping can be and by challenging all the assumptions about the way the jewelry sales process should be done, Hearts On Fire has found a formula for attracting both high-tech and high-touch Millennials in search of the perfect engagement ring.
Ultimately the success of the Hearts On Fire store will hinge on how it appeals to the tech-savvy Millennial diamond buyer by offering a buying-decision process based on the emotional quotient of how the diamond will look on her hand and how it will make her feel. Pesqueira sums it all up, “For the same amount of money they can have a choice of a very ordinary offering, but trying to do it as big as they can within certain parameters that they decided are acceptable, or for that same amount of money, they can have the most beautiful, most lively, colorful diamond in the world without spending one penny more. Our challenge is helping the customer see that is the choice they are making when the whole industry has taught them that they need to nail down the specs, get the largest offering they can for the price and to save money. In the end they are not as fulfilled as they would be if they spent the same amount of money on the most beautiful diamond they can get.”
High-tech, high-touch Millennials are going to challenge retailers across all sectors of retail – Get ready to disrupt and be disrupted
What retailers need to take away from the Hearts On Fire story is that just as soon as one competitor thinks they’ve nailed down the next-generation Millennial shopper, like Blue Nile did, another competitor will discover that there are still unmet, underserved needs that can ultimately be tapped. As high-tech as this generation is, they also demand real, meaningful emotional experiences. Hearts On Fire discovered how to use technology, not just as a shopping tool that allows a customer to compare and contrast numbers on a 4Cs spec sheet and get the cheapest price, but to deliver an emotional experience to the customers who are anxious about making a huge emotional investment in their future.
The HOF store isn’t selling technology, like Apple, or selling through technology, like Blue Nile, but selling with technology in subtle, behind-the-scenes ways that gives the customer confidence that he or she is in both a high-tech and high-touch world where they feel comfortably in charge and in command. So HOF is poised to disrupt the original jewelry disruptor, Blue Nile, by bringing back the emotion in buying diamond jewelry in a real-world touch-feel-see way. By studying what HOF has done, other retailers can learn new ways to marry the two worlds – technology and emotion – that their customers already inhabit.