Adapting to the tastes of millennials could be key to retail success when it comes to gold, according to the World Gold Council.
This comes following the group’s report which showed the largest fall in gold demand in two years and many millennials finding gold jewellery to be unaffordable.
Speaking to Professional Jeweller, Alistair Hewitt, head of market intelligence at the World Gold Council, explained that engaging actively with millennials could help jewellery businesses in the face of a hike in gold prices.
Hewitt advised: “Make sure gold jewellery remains relevant and that you’re targeting them in the ways and the manners in which they engage online already.
“I think that’s going to be a theme that retailers will need to think about over the course of the coming years.”
The World Gold Council carried out a study in the US which revealed 13% of respondents thought gold jewellery was totally unaffordable, while 38% said it was quite unaffordable.
Fine and gold jewellery underperforms for millennials. When offered $1,000, only 24% of those between 18–25 would buy fine jewellery, compared to 47% of those aged over 34. Luxury fashion and technology does a better job at engaging with millennials, who are increasingly focused on ‘experiential’ purchases.
And this trend is clear in data presented by JPMorgan Chase, which revealed that in 2015, on average, 34% of spend by millennials was on experiences such as travel and entertainment, compared with 28% for the nonmillennial population.
Although the study was completed in the US, Hewitt believes the data is still relevant to the UK with millennials being so connected by social media and the internet.
He said: “What I do know is that the US jewellery market and the UK jewellery market do bare striking similarities. So I wouldn’t be surprised if some of the issues that we talk about in the US would map over to the UK jewellery market.”
The report said retailers will need to tackle consumers’ price and affordability perceptions, for example by continuing to develop and market pieces at lower price points, and by developing online strategies to engage more effectively with the younger generation.
The World Gold Council’s report showed Q4 got off to a stronger footing and Hewitt noted that although it would not be a clear recovery, a recovery was still likely.