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KNOWLEDGE OF PROVENANCE OF DIAMONDS AND OTHER LUXURY ITEMS INCREASINGLY IMPORTANT AMONG YOUNGER CONSUMERS

KNOWLEDGE OF PROVENANCE OF DIAMONDS AND OTHER LUXURY ITEMS INCREASINGLY IMPORTANT AMONG YOUNGER CONSUMERS, SAYS REPORT

 

According to the Merriam-Webster dictionary, “provenance” relates to the “the history of ownership of a valued object.” It relates to more than only where it came from originally, but also about to the journey it took along the way. It also happens to be an increasingly important element in deciding value in the contemporary diamond market.

New research published in this November in De Beers, in its latest Diamond Insight ‘Flash’ Report, indicates that that consumer attitudes towards provenance are definitely changing, with younger generations more likely to demand value ethics and sustainability assurances beyond simply knowing where a product originated.

The research was conducted among 1,000 consumers in the United States on De Beers behalf by 360 Market Reach. It revealed, while those aged 50 and above cited quality factors as being their most important considerations relating to provenance of luxury goods, such as French champagne or Italian cashmere, in the 18 to 34 age groups more important factors related to how the product was handled in the supply chain, with elements like human rights, environmental impact and “from a company whose values I agree with” scoring high.

Furthermore, the research also found that consumers who valued information about a product’s provenance were prepared to pay a premium for such assurances, with affluent consumers being the most likely to pay a premium.

 “It’s clear from this research that while provenance remains of high importance to luxury consumers, the meaning associated with provenance is shifting,” stated Bruce Cleaver, De Beers’ CEO “Younger generations want assurance of the positive impact a product has created beyond simply knowing where it originated. This is creating a new status in luxury, where consumers want to show the world they care through their luxury purchases and are increasingly prepared to pay a premium to do so.”

De Beers Insight Flash Report, November

Source: De Beers Insight Flash Report, no. 7, November 2021.

NOT ALL PRODUCT CATEGORIES EQUAL

According to 360 Market Reach 64 percent of all consumers and 73 percent of consumers with household income of more than $150,000 per year said they were willing to pay more for a product if its place of origin mattered to them.

At the same time, a significantly lower 14 percent said that they would not purchase a product unless they knew where it was from, while 71 percent said they would purchase anyway, but still preferred that they knew. A relatively small 15 percent said that provenance does not matter to them are all, or they simply “don’t pay attention.”

The study showed that consumer interest in provenance was related the category of the purchase, with almost 77 percent say that importance of provenance differs on what is being bought.

Food led the categories where knowledge about provenance was considered essential, with 95 percent of consumers saying they “care a lot.”, followed by cars at 84 percent and skincare at

80 percent. A considerably more modest 34 percent of consumers say they “care a lot” about the provenance of luxury products.

In the report, De Beers said the tiering of product categories makes sense, as dictated by practical health and safety considerations. But, it pointed out, consumers also increasingly think about where and how their discretionary items are made as well.

MILLENNIALS AND GEN Z LEAD THE WAY

But while concern about provenance may appear partial when it comes to luxury products in general, and diamonds in particular, the numbers are almost certainly like to rise, and relatively steeply during the coming years.

According to the De Beers report, Millennials accounted for 35 percent of consumption in 2019, but they are expected to make up 45 percent of the market by 2025.

Furthermore, the even-younger Generation Z, which currently accounts for only 4 percent luxury purchases could make up 40 percent by 2035, the report noted. It should be taken into consideration that in 2019 the Millennials and Generation Z, Generations Y and Z contributed all of the market’s growth.

De Beers Insight Flash Report, no. 7, November

Source: De Beers Insight Flash Report, no. 7, November 2021.

One more note about provenance. – while a growing number of consumers consider such information to be important, most were more skeptical about the likelihood of obtaining provenance-related information.

Only 7 percent of consumers surveyed in the De Beers study said they believed it was “very easy” to discover where their products originated from, while another 29 percent said it was only “somewhat easy.” More than half of consumers surveyed said it was “somewhat or very difficult to understand the story behind the items they buy.”

 

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