With Millennials set to be the highest-spending generation globally from 2020 and Gen Z already making up 35% of the world population, it is no surprise that building relationships with these demographic groups is front of mind for watch and jewelry retailers.
Capturing the attention of these consumers, their share of wallet, and continued loyalty in today’s experience economy will require a strong understanding of their needs, views, and values. In an effort to discover techniques for connecting with younger customers, WatchPro spoke to global retail consultant Pragma for advice on how to inspire meaningful relationships between brands millennials (age 21 – 39), and Generation Z (age 0 – 20).
1. Be authentic
The watch business is well aware that stories sell, and the more unique and authentic the story, the better. We find that there has been a recent shift from interest in the mass-produced to the curated, and younger customers often want to know the story behind what they’re purchasing. Retailers can emphasis the sourcing and craftsmanship behind the piece, as well as tell the story of the consumer that ultimately wears it in order to build a more emotional connection among consumers.
2. Be ethical
Research suggests that the ethical standards of a brand are important to 42% of millennials. There is increasing pressure, particularly in the fine jewellery sector, to place emphasis on the ethical credentials of raw materials. There is an opportunity to take this further by encouraging purposeful purchasing. Chopard, for example, not only sources materials responsibly but has also partnered with gold mining communities in South America to boost social and economic development. Championing a cause such as this creates brand appeal and resonates with the millennial and Gen Z desire to ‘give back’.
3. Be innovative
It is suggested that 70% of millennials will consider a lab-grown diamond engagement ring. Being more environmentally-conscious, younger consumers are buying into brands that are building their identity on being anti-conflict and environmentally conscious. Contemporary jewelry brand Kimai centres pieces around lab-grown diamonds and delivers products in recyclable packaging. With the lab-grown small diamonds market predicted to grow rapidly, and the likes of Meghan Markle wearing pieces from brands such as Kimai, jewelry retailers will need to innovate in order to not lose out to upstarts gaining traction in the fine jewelry space. The first watch brand to go public with the use of lab-grown gems is likely to get publicity that will appeal to millennials.
4. Be sustainable
With the rise of both the circular and sharing economy, the luxury rental market has emerged. Glitzbox, a London-based start-up, is a subscription service for jewelry rental. America’s Watchgang offers new watches through a subscription similar to a wine club. Although this may not be the obvious answer for retailers, as millennials and Gen Z purchase fewer high value items focusing on the mantra of quality over quantity, they may look to reuse raw materials in the future. Retailers could potentially offer additional services such as the melting down of gold or resetting diamonds to encourage customer lifetime value.
5. Be transparent
As digital natives, we know that millennials and Gen Z are constantly browsing online. A report by De Beers suggests that around 60% of millennial and Gen Z women search the internet prior to purchase to learn about diamond designs, quality, and pricing. Being transparent about what they are buying and at what price-point is a useful tool to build trust. This transparency is often where retailers lose out to players such as US brand Mejuri whose tagline is ‘everyday fine jewelry minus the traditional markups’. On each product they provide the ‘estimated traditional retail price’ against their Mejuri price to land the messaging around fair pricing.
6. Be personal
Through our work we have found that younger customers have expectations around high degrees of curation when it comes to customer service, and technology is being adopted by many retailers to respond to these ever-increasing needs. In the US, millennials are considered more likely to be comfortable using chatbots, and 70% that have used them reported a positive experience. deGrisogono unveiled social media campaigns with chatbots that gave purchasing advice via Facebook based on personalized queries by customers. Watch and jewelry retailers should be increasingly looking to purposeful technology to solve customer needs and provide on-demand interaction.
7. Be social
Social media is redefining the celebrities of today with 46% of Gen Z’s following more than ten online influencers. Gen Z have demonstrated more interaction with brands through social media than millennials and prefer to interact via Instagram rather than the millennial’s preference of Facebook or Twitter. Jewelers need to enable shopping functionality on Instagram, and incorporate user-generated content in-store and online. For example, Missoma allows customers to shop the look through Instagram posts.
8. Be accessible
Though women remain the predominant customer for jewelry, millennial’s and Gen Z are driving men’s jewelry sales. A brand that is tapping in to this potential is UK-based Astrid & Miyu, which has released its first unisex range of jewelry. Among young women, jewelry is no longer only for celebrations, nor do women feel that they must be gifted it by their partner with more than 51% of millennials purchasing jewelry for themselves. In an era of gender empowerment and higher disposable incomes among younger consumers, brands have the potential to respond with more accessible campaigns.
9. Be data-driven
In our work we find that with the growth of online retail, web analytics is a key driver to determining how to appeal to younger customers. Some jewelers are already starting to use data-driven decisions to drive sales; after observing spikes in sales of its Love bracelet among young consumers, Cartier re-released its Panthère watch on Net-a-Porter, younger customers bought the entry-level pieces (from $4000), rather than the priciest item ($170,000). Tiffany & Co. and Chopard have also launched on Net-a-Porter to broaden their customer base from the traditional boutique shopper, having identified potential in the shopping behaviors of younger consumers and their increased propensity to spend on luxury jewellery.
10. Be fun
The experience of buying jewellery, particularly in stores, is still often associated with long queues and locked cabinets. Younger customers are expecting brands to be reflective of their lifestyle and attitudes. Brands are responding with exclusive events in-store where shoppers can enjoy free food and drink, engage in talks attended by influencers, and explore the range on a more accessible level with added perks such as free engravings and personalization. We believe there is a further opportunity for partnerships whereby multiple brands which resonate with young consumers create an environment that isn’t just about the sale, but the experience, leaving a more meaningful and lasting memory in the mind of the young customers of today and the future.
Article by Aman Kaur Paul, Consultant, Pragma Consulting – firstname.lastname@example.org. Pragma is a leading consultancy which helps retailers enhance growth and profits through applying customer and market insight and practical solutions.