There’s a relatively new demographic showing up at fine jewelry stores: younger women and couples who recently (within two-three years) bought a diamond engagement ring who’ve decided they want a bigger diamond for it.
These shoppers spent good money on a mined diamond originally but are seeing and hearing about lab-grown diamonds through their friends and on social media—and are coming into stores (and logging on to websites) looking to purchase a heftier stone.
This is a significant new growth opportunity for fine jewelry retailers, as every upgrade offers an upsell opportunity, not only to a larger lab-grown diamond (LGD) stone, but also to a more expensive ring. And of course, every positive interaction works toward long-term relationship building with a younger customer.
CNN Business reported on this trend recently and retailers we’ve spoken with are experiencing it first-hand. Some have already begun marketing LGD upgrades to their recent mined diamond engagement ring customers.
Lindsay Reinsmith, co-founder of San Francisco-based lab-grown diamond jeweler Ada Diamonds, says, “Not only is this a common occurrence, but we’re also seeing a significant increase in clients coming to us for a lab diamond who are getting married a second time, they may have had a mined diamond for their first marriage, but they opt for lab grown for their second.”
Customer acquisition—as compared to lifetime value of that customer—is the critical equation that all retailers use to define the efficacy of their marketing spends (and their product development). If a repeat customer is coming back to a jewelry store or jewelry ecommerce site, for any reason, it’s an opportunity to increase their lifetime value to the store. It may be for a repair, an exchange, a gift and/or an upgrade. It may even be to complain—but it just doesn’t matter. A return visit is worth a great deal to a jewelry retailer.
The additional opportunity of these new, young LGD upgraders is that they will respond well to upselling to a larger stone and a more elaborate (even a custom) mounting. Once this upgrade is completed, the lifetime value of this customer goes up, and their word-of-mouth marketing (to friends and family) begins. They will certainly be showing this new larger diamond around and inevitably will be asked, “Where did you get that?”
If your store name is the answer they give, then you’ve become part of the lab-grown diamond viral marketing cycle and the new, young LGD upgraders have brought significant balance to your customer acquisition cost vs. lifetime value. —Marty Hurwitz