This year is shaping up to be the most significant year yet for the lab-created diamond market.
From the early days of the debate between lab-created diamonds and mined natural diamonds, the discourse has evolved while an inexorable wave of lab-created diamonds hit the marketplace.
With a global recession predicted for halfway through the year and international political consternation still widespread, discretionary consumer spending may soon tumble.
This will be evidenced by lower grocery spend, struggling brand items and declines in purchasing of smaller lifestyle ‘treats’.
Inevitably such global trends will impact jewellery sales and the lab-created diamond sector, although if the pandemic taught us anything, it’s that consumer interest in jewellery remains high even in troubling and uncertain times.
Though it is important that lab-created diamonds maintain their rightful status as high-value luxury products with an aspirational price point, consumers will inevitably be looking to restrict their budget.
When that occurs lab-created diamonds will be a competitive choice as consumers aim for a doubling of carat size for the same price they would have spent on a mined product.
With all of the above in mind, consider the following as predictions for the year to come.
Improved retailer confidence
Lab-created diamonds and natural diamond inventories will increasingly co- exist in arguably different aspects of the customer demographic and market.
Retailers will respond by becoming more confident in presenting lab-created diamonds head-to-head with mined diamonds.
In the future the role of industry organisations such as the International Grown Diamond Association will be to
support retailers in presenting lab- created diamonds honestly.
With this increased focus on transparent, accurate information and education, consumers are better placed to make an informed purchasing decision.
Increasing demand for certification
As lab-created diamonds develop stronger recognition consumers will become more demanding as they travel up the educational and experiential curve.
According to the latest research by MVI Marketing, a boutique luxury goods consulting firm on gemstones and jewellery, consumers increasingly desire, and in many cases expect, certified goods.
This will be important in terms of consolidating the legitimacy of the category in the eyes of the consumer and fostering trust.
Maintaining pricing integrity
Pricing is always a vexing subject within which everyone has an opinion.
My sincere hope for the industry is that there is not a race to the bottom for pricing as this will benefit no one - deleteriously impacting both diamond categories and perceptions of value.
In socio-economic theory, diamonds along with expensive lawyers are classic examples of Veblen goods – whereby demand is inextricably bound with perceptions of high price.
The lab-created diamond segment must stand confidently in its own power and pricing must reflect this. Comparison only ever seems to devalue us.
Pricing, quality, and marketing should reflect that neither lab-created diamonds nor natural diamonds are the ‘right’ or ‘correct’ choice – however, both are valid.
Emergence of a secondary market
An oft-quoted disparagement of the lab- created diamond market is that there is poor resale value. Diamonds of any category, unless in the My sincere hope for the industry is that there is not a race to the bottom for pricing as this will benefit no one - deleteriously impacting both diamond categories and perceptions of value.
‘Magnificent Jewels’ league should never be construed as an investment!
Whether they are a commodity is another debate. People buy diamonds for a range of reasons, almost always driven by emotions.
Thankfully few people are purchasing diamonds with the hopes of a profitable resale, but undoubtedly, perceptions of value will be affected by their ability to hold their value long-term.
Substantiation and peace
Finally, there have been various overtures within the lab-created diamond industry to promote a quantification of quality and most pertinently, sustainability standards.
Arguably, the topic of sustainability is near the top of every corporate agenda these days.
Many have moved to align their business with best practices in regard to sustainability however more can be done with specific regard to our sector and environmental claims.
The mud-slinging between the lab- created diamond and mining sectors in regard to environment ‘credentials’ will hopefully, one day, cease as it is both unproductive and unedifying.
That however is more of a wish rather than a prediction, to be sure.
In the same way that the mining industry worked hard to establish a positive legacy and promote best practices on provenance and human rights, my hope is that the lab-created diamond sector also holds itself up to scrutiny.
Developing an industry-wide quantification of sustainability claims which are legal and evidence-based will be one path to taking lab-created diamonds to a higher level.
Name: Joanna Park-Tonks
Business: International Grown Diamonds Association (IDGA)
Position: President
Location: UK
Years in the industry: 5