Primary Research Findings

AgencíaDos: Alexis Falci, Sara Geschke, Jaya Larsen, Ashley Obuljen, Brice Schreter, Nicolette Stern, Matt Whitney & CJ Zabat

Executive Summary

Over the course of the last month our team conducted:● 8 interviews, 1 survey, 3 ethnographies and 3 focus groups

In order to better understand:● The main purchasing motivations of consumers shopping for engagement rings● Consumers’ response to language used in current marketing and education of lab grown diamonds● People’s perception and sentiment about the lab-grown industry● Our Strategic Value Consumer

Based on this research, we found that our SVC is: ● 25-30 years old, loyal people and in a relationship

○ They care about where and who they buy this special purchase from○ They do a lot of research into their purchase ○ Money isn’t the biggest obstacle

Key Findings

Category awareness of lab-grown diamonds is much higher than we thought

● In our research, we found that 71% of people in a relationship or people who had previously purchased a diamond have heard of lab-grown diamonds.

○ “I saw a documentary many years ago about lab grown diamonds which blew my mind. The concept stuck with me because I remember thinking how cool it was that humans could imitate a process that would otherwise take over three billion years in a matter of weeks.” - Previous Soha Customer

Key Implication: Our target audience may not be as unaware of Lab Grown diamonds as we initially anticipated. Instead of focusing our customer education on WHAT a Lab Grown Diamond is, we should focus more on WHY they should buy one.

Sources: 2019 J449 Survey, Team 2, interviews

Key Implication: This validates our previous finding that more localized influencers will be key to Soha’s marketing. Soha should utilize influencers who may have a smaller reach, but a larger impact, rather than just using influencers with a large reach because people are more influenced by people they know than strangers.

When we asked a large sample size how they had heard of lab-grown diamonds, the most common response was

“word of mouth”

Sources: 2019 J449 Survey, Team 2; Survey

● People trust opinions of friends, family and people they can identify with

● People are more likely to want what their friends have

● 2:1 when compared to advertising

A “communication conundrum” exists for customized, lab-grown engagement rings

● The terms “simulant” and “synthetic” are often confused

○ “Immediately my mind jumps to think of synthetic diamonds or other fake alternatives which I would never buy for an engagement ring.” - Interview participant

● Subjects associated “lab-grown” and “lab-grown diamonds” as: ○ Artificial ○ Fake○ Manufactured

BUT

Key Implication: The connotation of “lab-grown” deters consumers from appreciating the full value of these diamonds.

Sources: 2019 J449 Survey, Team 2; Focus Group

● People described ideal engagement rings as …..○ Unique○ Special○ Rare○ One-of-a-kind

● This was the same language used to describe custom engagement rings

BUT…...

Key Implication: The ability to create a completely customized engagement ring is important to consumers who associate the purchase with something that should be rare and specific to them- this is beneficial for Soha who offers completely customized rings.

A “communication conundrum” exists for customized, lab-grown engagement rings

Sources: 2019 J449 Survey, Team 2; Focus Group

Eco-friendly and ethical aspects of lab-grown diamonds are not influential enough to encourage purchase

● Survey responses to whether ornot social impact makes a difference in high value purchasing decisions

Key Implication: A ring that’s eco-friendly and ethically conscious is an added bonus. When people are considering purchasing a lab-grown diamond, these aspects are less of a behavior driver but

after the purchase, people like to exaggerate the impact on their behavior.

Sources: 2019 J449 Survey, Team 2; Focus Group

● Viewed as a one-time purchase, overall impact not often considered

Amongst buyers, attitudes and perceptions of their shopping experience is important

● “Their little office is such a great, warm, happy place...I feel like he’s the kind of guy that as soon as you talk to him he’s got such a trusting, warm personality, all they’ll need to do is get people through the door.”- Interview with previous Soha client

● “I felt like whenever I went to the store I was patronized by the salesperson. Like, ‘Oh you need this, this is what we have’.”- Focus Group respondent who had previously bought mined diamond engagement ring

● Soha has a personalized experience that goes through the process with clients step-by-step.

● People want to feel comfortable with people who they’re buying a product from, especially if the product is something like an engagement ring, which marks a milestone in a client’s life.

Key Implication: What entices people to be loyal to a store is the experience they have with it. This is something Soha can capitalize on.

Sources: 2019 J449 Survey, Team 2; Interviews

Cost & quality are key drivers of diamond purchases (for both mined & lab-grown)

● Consumers responded that cost and quality are (more) important than being eco-conscious in their purchasing behavior

- “I spent a lot of time on their (Brilliant Earth) website ‘creating my perfect ring’ and didn’t really understand what lab diamonds were.”- Focus group member

- “Maybe people (who would buy a lab-grown diamond) would rather have a large diamond with less quality than a real diamond with higher quality.”- Focus group member

● Quality = the four Cs, durability, longevity

Key implication: When people are considering making a purchase, the “green” factor is not a strong influencer, but after the purchase, people tend to overstate its influence.

Sources: 2019 J449 Survey; Interviews, Focus Groups

Online shopping is a key factor in everyday life, but for high value purchases, it seems to be the initial step and

eventually ends in person

When respondents were asked to rank their preferred method of shopping whenlooking to make a HIGH VALUE purchase, IN-STORE was far and away the most common response

Data: 74 Respondents● 45 people said in store was their preferred shopping method● 21 people said a combination of in store and online was their preferred shopping method● 8 people said that online was their preferred shopping method

Key Implication: Soha is at an advantage with their consumers because of their in store, one-on-one appointments an may even look to expand and improve upon that personal in store experience.

Source: Survey, Focus groups

SVC & Key Influencer Recommendation

Our Recommendation: “Engaged Loyalists”

● Our research revealed that the strategic value consumer for Soha Diamond Co. was between 25-30 years old, loyal to their friends and family, in a relationship and preferably living with their partner.

● Balance between unconventional and intentional○ They’re willing to try new things…

■ 30% more likely to agree that they’re the first among friends to shop at a new store■ “My engagement ring was with a black stone in the middle because I didn’t want to go the

mainstream route. I think if I knew about lab-grown diamonds, I definitely would’ve taken them into consideration.” - Focus group member

○ ...but they care about where and who they buy this special purchase from■ “I do research online before making an expensive purchase. Google, reviews. Or I’d try to talk to

people who had purchased something like that before and be like how’d you find it, what did you prefer” - Focus group member

■ “If I could do anything differently, I would have shopped around a little more. I still think I would have come to the same ring, but I probably should have done more research.” - Interview

Source: Simmons, Survey, focus groups, interviews

● Not only are they fiscally fit, confident spenders…○ 27% more likely to purchase a “medium-ticket” item such as small appliances or electronics

within the next 30 days○ 71% more likely to say they are significantly better off financially than 12 months ago ○ 85% more likely to say they will be significantly better off in the next 12 months

● ...they would rather get exactly what they want○ “I wanted something that was more specific than just a general mass produced item. I didn’t want

something that like was super generic I wanted something that would kind of sing to both me and my wife’s personality and the kinds of the things we like.” - Interview

Source: Simmons OneView, Interviews

Our Recommendation: “Engaged Loyalists”

What They Do

Key Behaviors● 17% more likely to agree they are doing more shopping on the internet than ever before● Shops with friends and partners● Very adventurous: will travel the unbeaten path, enjoy outdoor activities● Significantly more likely to try new things (such as food) before their friends● More inclined to shop online

○ Browsed for engagement rings online but also went in store

Source: Simmons OneView

How They Feel

Key Attitudes● Not as focused on the environment as we presumed● Optimistic about money

○ Even though, 59% more likely to be renting their current place of residence○ 71% more likely to believe they are significantly better off financially than 12 months

ago● More likely to care about getting exactly what they want rather than the price of an item● It is important to women that their spouse/fiancé likes their ring → it is “their ring”

○ Customization○ Enjoy shopping with their partner

Source: Simmons OneView

The environment is secondary

This SVC of 25-30 year olds living with a partner are…○ 19% more likely to agree companies should help consumers become more environmentally

responsible○ 23% more likely to agree eco-friendly products are higher quality

...but no significant differences for many other environmentally-driven factors○ Companies should be more environmentally responsible○ Each of us has a responsibility to what we can to be environmentally responsible○ It is important that others see me as environmentally conscious○ I often use transportation methods that are friendlier to the environment○ “I don’t make a huge effort to choose eco-conscious products, when I get the option, I choose that

one.” - Interview○ Mixed results across the entirety of primary research; not clearly pro- or anti-environment

Source:Simmons OneView and Interviews

Why the “Engaged Loyalist?”

Individuals aged 25-30 are:○ 101% more likely to be engaged○ Men were 37% more likely to be at employer mainly for money○ Women were 59% more likely to buy clothes they don’t need○ 71% more likely to be making between $50-59k, 33% more likely to be making between $60-$75k

...and they truly care about getting their “forever ring”● “I don’t want to sound bratty, but I wanted a decent sized ring because I wanted this to be my forever

ring. A lot of people say to start small and upgrade later (which a lot of my friends have done), but I wanted to get a ring I would be happy with forever.”- Interview

● “It was also really important to me that my husband loved the ring too, and I considered it to be ‘our’ ring, not just mine.” -Interview

● “Yes, of course. I’m a deal shopper, [but price is] also not the deciding factor. I would say that quality is most important.” - Interview

Source: Simmons OneView and Interviews

Secondary research confirmed how millennials shop: together● Spouse/partner as joint-decision maker on purchasing…

○ Clothing: 19% between 22-30○ Household furnishings: 16% for 25-29, 39% for 30-34

● 65% more likely to prefer shopping with friends

● Word of mouth as key for diamonds○ Interviews had multiple instances of people visiting specific stores because of

friends and influence of parents ○ Potential focus on localized influencers

The “Engaged Loyalist” trusts those close to them

Micro-Influencers

Dana Bronfman

Verena Erin

Jessica Hamm

Anna Mieke-Anderson

Pamela Kieck

Insights

Education is key

● When observing a group of respondents who had never heard about lab-grown diamonds before, 57% of subjects replied that they would guess they were of lower quality (Survey)

● 71% of survey respondents replied that they had heard about lab grown diamonds○ Majority of those answered that they heard through word-of-mouth

Key Implication: Consumers who are educated and aware of lab-grown diamonds are more likely to purchase them-important to establish them as not being a “substitute”

Source: Survey, Interviews

“I learn about products from friends.”

I am heavily influenced by opinions of friends and family. I trust people I know.

● I follow influencers and prominent figures on social media platforms, but their opinions do not influence me as much as people I know personally.

● My friends and family do not have vested interests in companies selling the products they use, so I can trust their honest opinions about the products they use.

● I view what my friends have as trendy and desirable.

● “Yes, I have heard of them. My married friend has one (lab-grown diamond engagement ring) and I think they’re super cool.” - Interview

Key Implication: I take note of what influencers post about, but word-of-mouth is the most impactful method of influencing my decisions.

Source: 2019 J449 Team 2; Interview

Trust, Patience and Comfortability

Key Implication: The attention to the customer is the deal breaker for why customers who visit Soha choose Soha in the end.

Source: Interview

What was the aspect that made your final decision for the ring end up in lab-grown diamonds?

“While I did like the fact that artificial gemstones are more sustainable, Soha and Aubree's attention to detail and willingness to create something special with me was what did it. I never felt like I was wasting their time and they never rushed me even though we probably put in more than 20 hours into designing Kristie's ring.” - Previous Soha customer

“As far as Soha Diamond Co. goes, I think they have a great business concept. They provided me with all the attention I could ask for and make a product that I respect quite a bit for it's sustainable aspect.” - Previous Soha Customer

High Praise Reviews

Category

ConsumerBrand

SWEET SPOT

Consumers who are educated and aware of lab-grown diamonds are more likely to

purchase them. Education is important in order to establish LGD products as equal quality and

not a “substitute.”

The attention to the customer is the deal breaker for why customers who visit Soha choose them in the end. Customer service and experience is truly a make-or-break component.

I take note of what influencers post about, but word-of-mouth is the most impactful method of getting my attention. Often times brands are recommended by friends and family.

Trust, patience and comfortability are key for me when making a

large purchase

Education is key when I am looking at my options

I learn about products from

friends

Communication “Sweet Spot”

After hearing about LGD, it was important to me to find an attentive shopping experience that had the options of personalization services that

Soha Diamond Co. offers to me.

- Given that we know word-of-mouth is the most prominent way that people learn about lab grown diamonds, increasing education (via professionals and peers) about the market will help promote sales and growth for SDC

Thank you, Soha & Aubree!

AgencíaDos

Bibliography

● Simmons Oneview● 8 Interviews● 3 Focus Groups● 1 Survey● 3 Ethnographies: Goodmans and Soha