The jewelry industry is writing its own “Fievel Goes West” gold rush tale.
In 2018, according to Forbes, the state of California was the recorded home of 144 billionaires — a tally higher than any country besides the U.S. and China. A large majority of this wealth is attributed to the tech industry. San Francisco — now rated as the world’s fourth-wealthiest city — has become the new hub from which jewelry and other luxury categories look to mine loyal, deep-pocketed customers.
It won’t be easy. The land of hoodies and hackathons is notoriously unfazed by fashion.
“It’s a very interesting crowd; I wouldn’t call them fashion-forward in the way they dress, but nonetheless there is a lot of wealth floating around,” said jewelry designer Stephen Webster, who is making a push in the region. “It’s such a giant hub for everything that disrupts life as we know it. If you are not paying attention to that crowd, it’s probably a mistake. I’d say especially for companies growing at the moment, looking to attract Millennials with money.”
“There is no question that as wealth is created in the tech space, they are an increasingly important target customer for all of us in the jewelry field,” concurred Fred Leighton and Kwiat chief executive officer Greg Kwiat.
He noted, though, that tech-moneyed consumers require a new approach. “You have to understand their mind-set to sell to them, though. You have to understand how their approach to purchases might be different than typical clients. Any field that is growing wealth is important to the jewelry industry and tech is the most prominent and fastest growing in the country,” Kwiat said.
Jewelry designers, luxury brands and retailers are on a mission to sell tech scions on finer elements of the good life. In the last two years, jewelry and luxury houses have invested heavily in the Bay Area — betting on bricks-and-mortar retail. Harry Winston opened a jewelry salon in San Francisco’s Union Square in March. Cartier unveiled a remodeled maison there just weeks later, and in April chose San Francisco as the strategic location to fete its latest watch design — also hosting three days’ worth of educational panels to coincide with the launch. Tiffany renovated stores in the Bay Area last year, while Hermès opened its own Palo Alto outpost earlier this month.
Christie’s has recently allotted extra resources toward strengthening its San Francisco presence, having identified the region as a “growth market.” There, its luxury department is pushing the development of rare wine collectors as well as fine watches, jewelry and cars.
“I think it has evolved [here] over time. I think people have focused on their [tech] businesses for a long time and now they have begun to appreciate other things around them,” Christie’s San Francisco head Ellanor Notides said, noting that local museums are also mining the tech community for fund-raising — efforts that have recently proven “tremendously” successful.
Tech titans’ increasing interest in luxury goods comes at a crucial time for jewelry, with some dealers reporting that longtime U.S. collectors are aging out of the market.
“The older crowd — do they need jewelry? Probably not. They are at the end of their [collecting cycle], if they have not already ended. Now it’s about catering to the younger crowd,” said Webster.
The new generation of American collectors, though, is not particularly interested in giant rocks and diamond wreath necklaces. They look for wearable items that speak to an individual aesthetic.
“Clients are getting older and they are aging out of the market and stopped collecting — they feel like they have enough,” said Kentshire’s Carrie Imberman. “There is a trend away from conspicuous consumption and lifestyles have changed. There was a time when I was growing up when my aunt and mom were going to black-tie events. Now people do not dress as formally — people are not collecting jewelry to have it sit in the safe.”
Casualization — a cultural shift that arguably began in the tech industry — has since permeated many broader aspects of American life.
In the Bay Area, relaxed trends remain strong — with tech-moneyed consumers preferring understated looks. Jewelers say they see little price sensitivity from tech-y shoppers and that their preferences skew toward precious stones that are small in size but valuable for their rare color or clarity.
“The age of people who have money and how they spend it has changed. Historically people who had wealth wanted to display that wealth because it relayed your place in society. Now there is a new moneyed class of young people,” Imberman added of shifts in consumption.
Kwiat said that tech’s taste in jewelry has a larger impact on the type of antique pieces he stocks at Fred Leighton. “I would say the idea of a casual lifestyle that might have begun in tech has spread. The world has gotten more casual and that absolutely influences how we buy for Fred Leighton and the pieces we create for Kwiat. Pieces have to be wearable first and foremost,” he said.
Wilkes Bashford, the luxury specialty store with locations in San Francisco and Palo Alto, has seen success with its jewelry assortment — which now accounts for 20 percent of sales. “They are interested in a combination of high-quality materials with a higher level of design aesthetic, and more importantly, a lifestyle look to the piece that could be worn every day with any kind of wardrobe,” the stores’ coceo Bob Mitchell said, noting that the majority of his customers are somehow related to tech, including investors or corporate lawyers working within the field.
The manner in which this audience is consuming, though, is at times indicative of their disruptive nature. Christie’s Notides said the auction house is focusing on bolstering awareness of its online auctions in the Bay Area, rather than hosting physical auctions in San Francisco. “We see a lot of activity online — a lot of people who are tech-savvy are bidding online or looking at our catalogues on the Internet,” she said.
Webster noted that the tech community appears primed to be the first adopters of lab-grown diamonds, with Diamond Foundry — the leading company in the sector — located right in San Francisco.
“I wouldn’t be surprised in the slightest that they will be among the first communities to take to lab-grown diamonds — it’s not for a generation of jewelry buyers that exists, it’s for a new buyer. It’s got technology involved, it’s modern, and it’s 100 percent traceable and sustainable. It makes sense,” he said.
But what is the turning point, where unfashionable entrepreneurs suddenly take an interest in finery?
Kwiat says that engagement rings or life cycle mementos are often a gateway. “They are starting to understand things like art and wine and jewelry. The wearability and investment aspects are appealing,” he said.
Education, sources say, is key to building relationships with the tech consumer. “As they gain knowledge, they gain education. They are interested, on the clothing side, why a Kiton jacket is priced at what it is. When they buy into it, they are very passionate about it,” Mitchell said.
“I have observed that there is a great degree of education that needs to take place but also a strong desire to learn about something that’s unfamiliar,” Kwiat said. “A lot have backgrounds as engineers and they are often curious, not only about how the stone was made in the Earth, but also how it was mined and the manufacturing process. Jewelry people understand the technical details and that this is a true art form, and that appeals to tech people because of the engineering involved.”
Added Mitchell: “It’s like the first time you get a great bottle of wine and you enjoy it — it’s the same thing with clothing and jewelry, there is slowly an educational process and we are seeing people gravitating toward an appreciation for quality items they are wearing.”