por\u00a0Pamela Danziger<\/a> dentro\u00a0Joalheria<\/a>,\u00a0Lab-grown diamonds<\/a><\/p>\n\n\n\n By all accounts Holiday 2020 was a strong one for diamond jewelry sales, especially for lab-grown diamonds (LGD), which offer shoppers bigger stones for less money.<\/p>\n\n\n\n When it comes to buying diamonds<\/a>, those are the two factors that matter most. For men, the cost of a diamond takes precedence in the purchase decision for an engagement ring, followed by the design. For women, it\u2019s design first followed by the carat size, which goes hand-in-hand with cost. And for both men and women the quality of the diamond comes in third, according to a survey by Beyond4Cs.<\/p>\n\n\n\n The diamond jewelry industry desperately needs this year\u2019s peak-selling season to be strong because 2020 was a disaster.<\/p>\n\n\n\n After reaching sales of ~$80 billion in 2018 and staying about level in 2019, the global diamond jewelry market dropped to ~$64 billion in 2020, according to the latest \u201cGlobal Diamond Report 2020-2021\u201d<\/a> by Bain & Company and Antwerp World Diamond Centre, the world\u2019s diamond-trading hub.<\/p>\n\n\n\n Full recovery of the diamond jewelry market isn\u2019t expect until 2022-2023 in the U.S. and other developed markets, though it is expected to recover faster in China. However, the U.S. diamond jewelry market is about as large as China, Europe, Japan, India and the Gulf markets combined.<\/p>\n\n\n\n That prediction may be optimistic since Bain confirms that its diamond jewelry statistics don\u2019t include sales of lab-grown diamonds.<\/p>\n\n\n\n As a result, details of lab-grown\u2019s penetration into the diamond jewelry market are sketchy in the 2020-2021 report, other than the finding that LGD production reached between six to seven million carats in 2020 compared with 52 million carats of natural mined diamonds in accumulated inventory, the highest level since 2013. <\/p>\n\n\n\n However, in its 2019 report, Bain gave more specifics<\/a>, noting the lab-grown market grew 15% to 20% in 2019, following a similar trajectory in 2018.<\/p>\n\n\n\n That increase is credited to \u201cthe widening price differential of lab-grown diamonds versus natural ones and campaigns that leveraged the \u2018green\u2019 benefits of manufactured stones,\u201d the report states.<\/p>\n\n\n\n \u201cSelect jewelry designers and retailers are beginning to use lab-grown diamonds, signaling their acceptance and driving lab-grown jewelry sales,\u201d the report continued.<\/p>\n\n\n\n In the most recent Bain report, the analysis effectively tries to commoditize lab-growns as being the lesser alternative to natural stones highlighting the \u201ccontinued divergence of natural and lab-grown diamond markets.\u201d<\/p>\n\n\n\n In a particularly telling word cloud illustrating some 1,500 consumers\u2019 response to the question \u201cWhat comes to your mind when you think about lab-grown diamonds?\u201d, the terms \u201cArtificial\u201d and \u201cFake\u201d generated the largest font size among U.S. consumers.<\/p>\n\n\n\n But the latest report admits that \u201cthe lab-grown segment is developing rapidly due to technological advancements and rising acceptance across the value chain.\u201d The value chain Bain is referring to is largely in the fashion jewelry segment where lab-growns are more \u201caccessible to a wider range of price-sensitive consumers.\u201d<\/p>\n\n\n\n As much as the mined diamond interests try to position lab-growns for the \u201cmasses\u201d and natural diamonds for the \u201cclasses,\u201d with DeBeers leading the way with its fashion-focused Lightbox brand, the consumers aren\u2019t necessarily buying it.<\/p>\n\n\n\n \u201cConsumer education has created consumer acceptance,\u201d says Amish Shah, president and founder of ALTR Created Diamonds which claims to be the world\u2019s leading lab-grown diamond company. His company is owned by R.A. Riam Group, which has its feet in both mined and lab-growns over its 85 years in business. <\/p>\n\n\n\n \u201cConsumer confidence in the product has been growing on a consistent basis, leading to where the industry is today,\u201d he continues.<\/p>\n\n\n\n Acknowledging that diamonds of all kinds are an aspirational product, with offerings from luxury brands out of reach for about 95% of consumers, he believes the attention lab-growns are getting in the market and the excitement they are generating will only be good for the entire industry.<\/p>\n\n\n\n \u201cThis reduction in cost and increased availability to a wider audience is going to increase the width of the consumer base,\u201d he believes. \u201cIt opens a new category for the customer and the industry. That is a beautiful thing.\u201d<\/p>\n\n\n\n Jewelers and retailers need the extra margin that lab-growns offer and he sees the next five to ten years as a pivotal time as costs continue to decline.<\/p>\n\n\n\n Right now the margins remain good for lab-growns and demand continues to grow, especially among younger consumers who are increasingly concerned about environmental, social and corporate responsibility (ESG).<\/p>\n\n\n\n The only thing holding lab-growns back is that demand exceeds supply. \u201cEvery prime lab-grown diamond grower is sold out for 2021 already,\u201d relates Marty Hurwitz of MVI Marketing and publisher of the MVEye. \u201cSome of them are already taking advanced orders for 2022 and they\u2019re getting cash up front for those orders.\u201d<\/p>\n\n\n\n Hurwitz notes that Signet, the world\u2019s largest diamond jewelry retailer<\/a> and the jewelry retail leader in the U.S., is one of the world\u2019s largest buyers of lab grown diamonds in rough and polished.<\/p>\n\n\n\n \u201cSignet is aggressively expanding to lab-grown bridal in all its retail brands as quickly as they can purchase inventory of bridal-sized center stones,\u201d he says.<\/p>\n\n\n\n The most popular center stones for rings are in the two to two-and-a-half carat range. \u201cEvery one wants a bigger store,\u201d Shah declares, but these choice stones are in the shortest supply.<\/p>\n\n\n\n That may be about to change, however, as WD Lab Grown Diamonds, the leading lab-grown diamond producer in the U.S., has just acquired J2 Materials<\/a>, which is a pioneer in single-crystal Chemical Vapor Deposition (CVD) diamond growth. <\/p>\n\n\n\n In the world of lab-growns, there are two primary technologies used to produce them: HPHT (high pressure and high temperature) and CVD<\/a>.<\/p>\n\n\n\n HRTP was the first diamond-growth technology introduced in 1954 but is more costly and energy intensive than the recently-developed CVD method.<\/p>\n\n\n\n Rather than using intense pressure and heat to replicate how natural diamonds form, the CVD process imitates the way diamonds are formed in intersteller gas clouds, similar to how snowflakes form. It uses less extreme temperatures and pressure than HRTP and requires more compact and less costly equipment.<\/p>\n\n\n\n While both produce chemically and structurally real diamonds, the CVD process is noted for its ability to produce the most chemically pure Type IIa diamonds, which are extremely rare in nature.<\/p>\n\n\n\n Through careful controls of its CVD production, WD Lab Grown Diamonds was just granted a Certification Standard for Sustainable Diamonds<\/a> by the global audit and standards firm SCS Global Services. The first certificate of its kind granted, it gives WD the authority to use claims of \u201cCertified Sustainable\u201d and \u201cCertified Climate Neutral\u201d for their as-grown diamonds.<\/p>\n\n\n\n \u201cWe believe the Grown in the U.S., Certified Climate Neutral and Certified Sustainable stories will become more central to the consumer\u2019s decision-making,\u201d says Brittany Lewis, WD\u2019s chief marketing officer.<\/p>\n\n\n\n MVEye\u2019s Hurwitz concurs: \u201cWD is bringing a better quality, bigger diamond with a sustainable and made-in-USA brand story to the market. WD is changing things dramatically. In acquiring J2 Materials they are bringing in two of the leading scientific minds in the diamond growing world [i.e. Jonathan Levine-Miles and John Ciraldo].\u201d<\/p>\n\n\n\n Hurwitz explains that J2 has specialized expertise in repeating growth capability, which other growers have yet to master.<\/p>\n\n\n\n \u201cSo if a customer wants to repeat a run of 500 pieces of two-carat stones or even larger, they can do it. J2 materials was a strategically valuable addition for WD because now they will be able to take orders on specific shapes, sizes and quality and do them at scale,\u201d he continues.<\/p>\n\n\n\n WD will be cashing in on this new capability soon by introducing a consumer-facing diamond brand called Latitude to more directly speak to the consumer, educate them on the lab grown diamond category, and highlight the premium offerings available through WD partners, all the while continuing to sub-license its growing technology<\/a> to companies such ALTR.<\/p>\n\n\n\n In trying to differentiate natural diamonds from the lab grown alternative, the Natural Diamond Council<\/a> quite truthfully underscores natural diamonds rarity.<\/p>\n\n\n\n \u201cNatural diamonds are finite and rare. Diamonds are becoming rarer every day because no new significant deposits have been discovered in about 30 years,\u201d it states. \u201cHowever, lab-grown diamonds can be manufactured in potentially unlimited quantities similar to any manufactured product, thus they are not finite and cannot be considered rare.\u201d<\/p>\n\n\n\n To which, the NDC adds, \u201cNatural diamonds obtain their value from their scarcity as a natural, billion-year-old precious gem and have shown over decades to grow in value as they become more rare.\u201d<\/p>\n\n\n\n Some diamonds and diamond jewelry are proven to increase in value<\/a>, but hardly all or even most.<\/p>\n\n\n\n \u201cIt\u2019s the greatest marketing story ever told and the myth that has sustained the industry: that mined diamonds have investment value,\u201d Hurwitz exclaims. \u201cIt couldn\u2019t be further from the truth. A diamond devalues as fast as a car leaving the showroom and nobody talks about the truth of that. It\u2019s just like gold. The scrap value is nothing compared to what you paid for it.\u201d<\/p>\n\n\n\n People don\u2019t buy diamond jewelry for its investment value. It\u2019s an emotional purchase and that is where its true value lies.<\/p>\n\n\n\n \u201cThe industry has consistently sold diamond jewelry based on the concept that the diamond is consistently appreciating. That is absolutely false,\u201d ALTR\u2019s Shah states. \u201cIt\u2019s the emotional value. That value is retained in the individual piece of jewelry and it is not the sum of the individual parts.\u201d<\/p>\n\n\n\n To consumers, there is no visible difference between a mined or lab-grown stone in terms of quality. The only observable difference is in size and cost and lab-growns beat natural in that regard.<\/p>\n\n\n\n Perhaps the mined diamond industry has nobody to blame but itself that consumers perceive the bigger the stone, the greater the emotional investment. And that is why more jewelry retailers are carrying lab-growns and more consumers are looking for them.<\/p>\n\n\n\n \u201cJewelers need to give consumers the choice. And retailers should make money on whichever one the consumer wants to buy,\u201d Hurwitz affirms. \u201cThere\u2019s no question consumers are asking for this more and many more retailers are carrying it now.\u201d<\/p>\n\n\n\n He adds that at least 50% of independents and nearly all the major retailers now offer lab-growns and many high-end and premium brands will be selling them soon. \u201cThat\u2019s because they are a great value for the consumer and more margin for the retailer,\u201d he concludes.<\/p>\n\n\n\n Pamela N. Danziger is an internationally recognized expert specializing in consumer insights for marketers targeting the affluent consumer segment. She is president of Unity Marketing, a boutique marketing consulting firm she founded in 1992.View all posts by Pamela Danziger \u2192<\/a><\/p>","protected":false},"excerpt":{"rendered":" This year Valentine\u2019s Day fell nearly smack dab in the middle of the peak period for diamond jewelry sales. by\u00a0Pamela Danziger in\u00a0Jewelry,\u00a0Lab-grown diamonds By all accounts Holiday 2020 was a strong one for diamond jewelry sales, especially for lab-grown diamonds (LGD), which offer shoppers bigger stones for less money. When it comes to buying diamonds, those […]<\/p>","protected":false},"author":2,"featured_media":790,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":{"0":"post-788","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-luxury-jewelry"},"_links":{"self":[{"href":"https:\/\/www.luxurymarketreview.com\/pt\/wp-json\/wp\/v2\/posts\/788","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.luxurymarketreview.com\/pt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.luxurymarketreview.com\/pt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.luxurymarketreview.com\/pt\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.luxurymarketreview.com\/pt\/wp-json\/wp\/v2\/comments?post=788"}],"version-history":[{"count":0,"href":"https:\/\/www.luxurymarketreview.com\/pt\/wp-json\/wp\/v2\/posts\/788\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.luxurymarketreview.com\/pt\/wp-json\/wp\/v2\/media\/790"}],"wp:attachment":[{"href":"https:\/\/www.luxurymarketreview.com\/pt\/wp-json\/wp\/v2\/media?parent=788"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.luxurymarketreview.com\/pt\/wp-json\/wp\/v2\/categories?post=788"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.luxurymarketreview.com\/pt\/wp-json\/wp\/v2\/tags?post=788"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Diamond jewelry sales crashed in 2020<\/h3>\n\n\n\n
Less-than alternative to natural diamonds<\/h3>\n\n\n\n
Consumers want an alternative<\/h3>\n\n\n\n
Lab-growns supply shortage to change<\/h3>\n\n\n\n
Newly sustainable alternative<\/h3>\n\n\n\n
Natural is rare, but does it matter?<\/h3>\n\n\n\n
Emotion trumps economics<\/h3>\n\n\n\n
About Pamela Danziger<\/h3>\n\n\n\n