Lab-grown diamonds continue to grow in popularity and awareness with consumers, according to new research. A report issued today by MVI Marketing says the cultivated stones are “poised to reach mass market status,” with more than 50 percent of independent jewelers in the U.S. expected to stock the stones in time for this holiday season. This information comes despite the world’s top diamond mining firms’ efforts this year to promote natural diamonds through their joint lobbyist venture, the Natural Diamond Council.
MVI Marketing’s report notes that general household awareness of lab-grown stones now stands at about 80 percent, up from 58 percent in 2018. The stones are poised to take additional market share in the coming months — particularly for their value ratio.
“Consumers are most drawn to the size-to-value equation. Shopping within a budget, as most consumers do, when shown both mined and lab-grown diamonds, the bigger stone of the same quality in lab-grown diamond appears to be the winning proposition for most couples getting engaged. Eco-friendliness is the icing on their diamond cake, especially for Millennials,” said Marty Hurwitz, chief executive officer of MVI Marketing, which has tracked lab-grown diamonds since 2004.
Lab-grown diamonds offer consumers an average of 30 percent value for price and size, compared with natural stones, the survey said. Hurwitz added that 95 percent of lab-grown diamond retailers report better profit margins with lab stones than natural diamonds (between 16 to 40-plus percent) — a crucial source of revenue during this challenging economic period.
While some jewelers may feel attached to the romantic notion of naturally sourced stones, Hurwitz advised otherwise. “Jewelers have to make a profit and hanging onto one product that sells love may not be a good idea. Rather retailers should present consumers with a choice of both mined and lab-grown diamonds, and make money with the products consumers see as love,” he said.
The stones are most popular with younger consumers (aged 25 to 35) whose response to lab grown diamonds was “overwhelmingly positive,” while other age groups were more skeptical — with 46- to 55-year-olds having the lowest opinion of the stones. Hurwitz advised jewelers to pay more attention to the younger age group’s opinions, since they are the market that is getting engaged.
The survey noted a fledging interest in larger lab stones, measuring from two to three carats in weight. As told to WWD in October, Lightbox — De Beers’ lab diamond subsidiary — is now in the process of developing larger lab stones. Currently, the company only offers lab diamonds up to one carat in weight.
Lightbox’s new Oregon manufacturing facility, opened last month, is ramping up production — expected to produce 200,000 carats of polished diamonds a year. The company has teamed with Blue Nile — among the U.S.’ largest online jewelry stores — on distribution of its lab diamonds, marking one of the biggest retailers to include lab grown stones in its assortment.
“We have been thinking pretty hard about [lab diamonds], talking to consumers about how they could or would fit into our brand and our merchandise strategy,” said Blue Nile ceo Sean Kell. “We decided that the trend is not going away — these are beautiful stones and the quality and availability of stones has improved dramatically, even over the last year or so. It made sense to us to dip our toe into market.”