Sally Morrison's Key Points • Lab-created diamond prices have plummeted, shifting opportunities toward fashion jewellery and emerging high-tech applications. • Declining prices are challenging retailer profitability, prompting a focus on consumer education and natural diamond differentiation. • The De Beers Group is committed to strengthening consumer confidence through verification and transparency initiatives. |
The lab-created diamond market has changed rapidly over the past few years, and in many ways has reflected the same trajectory that we have seen in man-made colour gemstones, for example, emeralds and rubies.
This price evolution in lab-created diamonds has been charted by industry analyst Edahn Golan, who recently highlighted the consolidation of prices around $USD100 a carat, or lower, across sizes up to three carats.
The implication is clear: The market has changed and lab-created diamonds are in a new place.
To date, lower lab-created diamond prices have provided retail jewellers with new opportunities, particularly in affordable, fashion-forward jewellery, which can now be bigger, bolder, and offer inventive design at very appealing
prices for customers.
However, even more exciting are the opportunities in the high-tech field, where current production costs make lab-created diamonds for technical applications an economic reality.
Already, we have seen a number of growers shift focus to that new market with an eye towards industrial applications, including quantum computing.
In the US, these changing economics have had implications for retailers. While margins on lab-created diamonds have remained sizeable, they have not been able to keep pace with the large drops in base prices. As a result, retailers have seen pressure on topline sales, and shrinkage in overall profit.
As the average cost of lab-created diamonds continues to drop, this situation is set to become ever more challenging. Retailers will have to sell even more diamonds to maintain profits, with the additional risk of having returning customers ask why something they purchased not long ago has dropped so significantly in value.
Additionally, broader industry trends point to key entities changing the way they approach lab-created diamonds. The GIA recently announced it will no longer grade lab-created diamonds using the 4Cs traditionally used to grade natural diamonds. HRD Antwerp will cease grading lab-created diamonds altogether.
All of these changes are leading retailers to pivot their focus back to natural diamonds; however, many are uncertain how best to do so. From my point of view, education and staff training will be crucial.
While consumers are increasingly aware that natural and lab-created diamonds are different, making sure that they understand what the differences are and how those differences translate in terms of value is critical. Our research highlights that most consumers arrive in stores planning to buy natural diamonds.
At the point of sale, however, many have been converted to buying lab-created diamonds because sales associates have implied that the two products are exactly the same, with lab-created diamonds being less expensive.
Such an approach is not economically sustainable for jewellers. For retailers interested in investing in natural diamond training, there is an excellent range of resources available on the Natural Diamond Council website and the De Beers Group’s Education App.
Additionally, another effective way to educate consumers is to clearly demonstrate that lab-created diamonds and natural diamonds are fundamentally different and that this difference can be verified with confidence.
At De Beers, we have leveraged decades of expertise in diamond verification and innovation to develop DiamondProof: a state-of-the-art diamond verification instrument explicitly designed for use at the retail counter.
With a 0 per cent false-positive rate, DiamondProof ensures that no lab-created diamond is mistaken for a natural one, delivering accurate results within seconds.DiamondProof is already being used in key retail environments to empower consumers with real-time information, reinforcing trust in the diamond-buying experience.
Finally, we all have a role to play in telling better stories about natural diamonds. De Beers Group has recently launched ORIGIN, a new branded polished diamond offering. It is designed to enable retailers to tell the individual stories of natural diamonds sourced by De Beers, strengthening the connection between
a diamond and the individual who wears it.
Each ORIGIN diamond is ethically and responsibly sourced, polished to perfect symmetry, and fully traceable from the place it was discovered to the lives it helped transform. Powered by Tracr, De Beers’ industry-leading blockchain platform, ORIGIN offers end-to-end transparency.
We are also investing significantly in category marketing, including launching the first beacon in more than a decade, Desert Diamonds. Launched in October, this campaign has been informed by a shift in consumer desire, where more people are seeking jewellery that expresses individuality.
With that said, it’s clear that the diamond industry is navigating an evolving market. Above all else, these challenges have highlighted the enduring value of natural diamonds and the importance of education, transparency, and responsible sourcing for long-term consumer trust.
THE GREAT DIAMOND DEBATE III
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