The introduction and acceptance of lab-grown diamonds (LGDs) constitutes the biggest change to the fine jewelry since the early 1990s when the Argyle diamond mine opened. There was fear then also—fear that Argyle’s enormous production of 40 million carats per year of small size diamonds would lower the growth of sales volume of wholesalers and retailers. And fear that the mine’s champagne diamonds would cannibalize the white diamond category.
What happened instead was the birth of price-pointed diamond fashion jewelry. Tennis bracelets went from selling hundreds of $7,000 retail units to selling millions of $700 units annually. With lab-grown diamonds, we’re looking at a similar pattern of disruption leading to change in the market. Both upheavals greatly expanded the number of diamond jewelry customers.
A new study I undertook through my market research firm, THE MVEye, revealed significant consumer interest in lab-grown diamonds, and unprecedented sales and margins for businesses that embrace them.
The study was sponsored by GIA, the International Grown Diamond Association, and Lusix, and its goal was to gather global voices in jewelry retailing and jewelry consumers to corral and analyze their opinions. Participants in the research came from Australia, Canada, EU, New Zealand, United Kingdom, and the United States.
The consumers polled don’t know about the recent drop in wholesale lab-grown diamond prices or about the industry’s collective angst over LGDs, the category’s current grower consolidation, or even where lab-grown diamonds come from.
But they’re excited about a new, lower-priced diamond category. They know that they can spend a bit more and double the weight of their diamonds; they know that lab-grown diamonds now come in fancy colors. They know that a nearby retailer is offering a beautiful selection of lab-grown diamond jewelry, complete with grading certificates, insurance, upgrade offers, credit, gem education.
Not all retailers or jewelry customers want lab-grown diamonds. Steve M., 55 years old from Southern California, looked at lab-grown diamonds at a few retail stores but he just wasn’t comfortable with LGDs to upgrade the center diamond of his wife’s engagement ring. In this research, retailers shared that they are worried the price could fall out of the bottom of the category leaving their inventory worthless and their customers upset.
But for a ballooning number of retailers are bullish on the category. Seventy-two percent of retailers polled for the study sell lab-grown diamonds, and 28% don’t (but half of that cohort is considering it). Retailer Doug Meadows of David Douglas Diamonds in Marietta, Ga., said, “This category is just going to continue to grow and explode. We have just loved it. It’s been the perfect storm for us.”
Check out some fascinating stats and facts from the MVEye 2022 International Lab-Grown Diamond Consumer and Trade Market Research Report, below. Readers of The Zing Report can download the full report for free using the promo code gv100.