In September 1938, a 29-year-old Harry Oppenheimer, the son of De Beers chairman Sir Ernest Oppenheimer, traveled to the United States for meetings with the N. W. Ayer advertising agency. Thus was put in a motion a process that was to change the diamond business forever.
Oppenheimer was coming to the United States at a time when diamond jewelry sales seemed to be mired in a prolonged slump. In Europe, which was hurtling toward war, the diamond was still considered by many to be the exclusive property of the wealthy and the noble classes, and in America, while about 75 percent of the diamonds sold were set in engagement rings, the average price paid was $80 an item. To make matters worse, since the end of World War I the volume of diamonds sold in the United States had declined by 50 percent. The Asian diamond market at that time, for all practical purposes, did not exist.
N. W. Ayer suggested to Oppenheimer that a carefully designed advertising and public relations campaign could influence social attitudes in the U.S. market. More specifically, it urged the strengthening of the association of diamonds with romance. Since diamonds were a gift of love, N.W. Ayer felt, it stood to reason that the more valuable the diamond, the greater the expression of love.
The campaign devised by N.W. Ayer set the tone for De Beers’ consumer advertising for the next 60 years. Reinforcing the link between diamonds and romance, it delivered a message, as stated in the advertising agency’s 1951 policy review, “that only the diamond is everywhere accepted and recognized as the symbol of betrothal.”
The association of the diamond with love and marriage was a master-stroke on a number of levels. Bridal jewelry and other gifts of love rarely enter the resale market, meaning that most diamonds are sold only once. Also, since love and marriage never really go out of fashion, diamond jewelry has remained a constant, decade after decade.
Furthermore, since people hitch up all throughout the year, the bridal jewelry business, although stronger during some months than others, is not seasonal. Marriage is a year-round business, although the frequency of wedding rises somewhat in the summer. The highest number of weddings take place in August, at 11 percent, while the lowest number are recorded in January and February, at 6 percent each.
The bridal business is worth a great deal of money. The current value of the U.S. bridal market is worth about $74 billion, of which about 17.5 percent or $13 billion is made up of jewelry. Other estimates have put the figure at $11 billion. Roughly $22,000 is the average amount spent on a traditional American wedding.
About 75 of first-time brides will receive a diamond engagement ring, as will 67 percent of repeat brides. According to the XO Group, the average cost of an engagement ring is today $5,200, although about 12 percent of couples will spend more than $8,000. The wedding band will cost on average $1,126 for brides and $491 for grooms.
Each year some 2.4 million weddings are performed in the United States, with the average age for first-time brides being 25 years and for grooms 27.5 years. The mean household income of a newly married couple is $60,000 per annum.
In its 2011 Engagement & Jewelry Study, Knot Market Intelligence provided a detailed picture of the bridal jewelry market in the United States. Knot Market Intelligence is the research division of the XO Group, which is a global media company that owns two of the leading wedding websites, TheKnot.com and WeddingChannel.com. The study included 10,000 brides and 1,000 grooms, of mixed ethnicities, education and income levels, in all 50 states.
The study demonstrated how resistant bridal jewelry is to market fluctuations, with only 14 percent of grooms claiming to have downsized the engagement ring due to the current economic climate. In fact, one in four grooms spent more than he originally budgeted. On average, couples are today spending about $600 below the $5,800 they were prepared to pay for a diamond engagement ring in 2008.
The study shows that round diamond cuts are the most popular cut for brides overall. Indeed they are even more popular at the higher-end of the market, with what the study refers to as “luxury ring brides." In that market sector 57 percent prefer round cuts, compared to 53 percent of “non luxury brides.”
Cushion-cut diamonds are a favorite among luxury ring brides – 8 percent versus 3 percent for the non luxury segment. The luxury segment – which currently pays on average $13,500 for a diamond engagement ring, tends to be older, lives in the Northeast and is more traditional.
According to the 2011 Engagement & Jewelry Study, some 39 percent of grooms purchased at least part of the ring from a local or independent jeweler, while 35 percent purchased at least part of the ring from a national jewelry chain. Interestingly, 9 percent purchased from an online retailer.
The majority of brides – indeed 65 percent – were involved in the ring selection, with 31 percent being “very involved.” Some 21 percent of brides surveyed said that they actually visited the jewelry retailer in-person without her fiancé. This was down from 30 percent of the brides who were engaged in 2008.
The study indicated a new trend, which might suggest further growth in the bridal jewelry market. Brides aren’t the only ones with engagement rings these days. Grooms are now opting to wear “man-gagement” rings. Indeed, 5 percent of the grooms polled said that they wear an engagement ring along with their brides.