Australia’s Jewellery Market being redefined by Shifting Consumer Preference

The entire jewellery landscape is being redefined due to shifting preference of millennial consumers applying prudence to their jewellery buying behaviour that leans towards practicality instead of traditional factors.

Australian jewellery retailers have become cautious and are reorganising inventories that mainly consist of sparkling natural diamond-studded rings, natural diamond necklaces and precious metals that have stifled cash flow due to poor sales to less pricey inventories.

Despite the fact that the jewellery market value is estimated to be close to 3 billion USD rendering the sector as the largest component of Australian accessory market base.

However, the natural diamond sphere of the industry is on a negative tangent mainly attributed to the changing preference of the younger consumer base that are frugal and prefer accessories that are developed with non-precious metals and lab grown diamonds which cost a fraction of the natural counterparts.

There are a range of business drivers or factors that have a direct influence on jewellers demand for diamonds in Australia, among which include consumer sentiment, trends, level of disposable income, and awareness about lab grown diamonds that has impacted the engagement diamond ring and wedding band demand negatively.

In essence the younger consumers or millennials regard jewellery as being a non-essential item which has resulted in retailers to constantly change offering in order to keep up with shifting consumer preferences in order to cope with the competitive landscape the shrinking number of stores.

For the most part the precious stone jewellery component which was at one time dominated by natural diamond products is experiencing revenue declines due to economic conditions and the rise of lab grown diamonds. This makes it evident that despite the allure of natural diamonds, the downturn that the industry is experiencing reflects the natural diamond segment is slowly losing its dominance.

Currently, the new age consumers lean towards demi-fine jewellery which is slowly replacing the fine jewellery segment and is effectively filling the gap between fine and fashionable  jewellery that are made of various alloys, semiprecious stones or synthetic diamonds which is considerably more affordable than fine jewellery products.

In retrospect, industry observers and analyst agree that it was the COVID-19 pandemic threw a spanner in the works within the scope of the Australian watch and jewellery retail industry which has disrupted cash flow for retailers.

The pandemic fast tracked the shift from brick and mortar to online shopping which offer not just more variety and options, but also at much cheaper rates which has become the greatest challenge for traditional retailers that experienced an approximate 1.3 % between 2023 and 2024.

However, on the bright side, the fine jewellery segment according to some analysts is expected to swell by 2025 and grow to more than $5 billion by 2029. Nevertheless, not all industry observers agree with this scenario based on the fact that the prices of diamonds have dipped and this phenomenon would continue if the current trends prevail due to online offerings and the rise in demand for lab grown diamonds.