According to surveys taken during COVID-19 lockdown through the end of May, about 45 percent of U.S.-based consumers say they plan to make more careful purchases, opting for fewer new things of higher quality. Despite unemployment figures approaching Great Depression levels, a mostly stalled economy and forecasts that the impact of the pandemic will be felt for years, about 75 percent of survey participants said they are optimistic about their financial future over the next three years.
De Beers considers both these figures positive news for the jewelry industry — particularly diamonds, which are seen as high-ticket purchases that carry sentimental importance and investment value.
De Beers typically issues an annual insight report each fall, but decided to break with its own tradition and offer a “flash report” this month for retailers and industry experts, given that “there is a lot of interest in the sentiment of consumers having gone through this unique experience and what will it mean as we head toward the key holiday [retail] season,” said De Beers executive vice president for consumer and brands, Stephen Lussier.
It remains unknown what longer-term effects COVID-19 lockdowns will have on consumer psyche, but Lussier feels that short-term ones could be profound. The pandemic has caused a unique phenomenon with shoppers for its dual economic and psychological tolls.
“COVID-19 directly affected us and the economy, being a health crisis, but being locked down with immediate family I think also created a new sense of appreciation for people who are close to you and the idea that you should really express that,” said Lussier.
According to the group’s survey, about 90 percent of consumers hope to give gifts this holiday season that retain value over time. About 56 percent say gifts today should be meaningful, more so than fun or purely functional.
“We see people saying, ‘People and relationships are more important to me now than when I was caught up in the grind of everyday life before COVID-19. I’ve reflected on what’s important,’” said Lussier.
Some reports in recent weeks have examined how COVID-19’s lockdowns and resulting economic impact could affect Millennial consumers, who are already known to delay lifecycle events like getting married and having children. Some studies expect these events to be pushed further out, but Lussier thinks differently.
“It’s a little different this time because of the experience of being locked down together. Most young Millennials getting married in America are already living together — a lot of them were locked down together. It seems like there is a greater desire to make a commitment because I think of that emotional experience which is conflicting with the economic issue of delaying marriage,” said Lussier.
He noted that bridal ring sales in China through April and May exceeded pre-COVID-19 sales — which demonstrates a certain pent-up demand created through lockdown.
“If they do get married, we have some advantage on the diamond side because honeymoons will not be easy and we’re not sure there will be big weddings, either. There may be more money in the pot to spend on jewelry than there otherwise would have been,” added Lussier.
That said, diamond sales and production have inevitably taken a hit during the pandemic, as De Beers expects it will mine about 25 percent fewer diamonds this year than planned. The company says most of its stores and partner retailers were closed for an average of two to three months.