Diamonds are seeing surging popularity in nations that are emerging from lockdowns with the rollout of vaccines.
Large-volume retailers like Blue Nile are reporting strong diamond sales with average purchase prices increasing by double-digits. And auction houses like Sotheby’s and Christie’s, which in the years before the pandemic had struggled to sell white diamonds, are now doing so at record numbers. Last week, Sotheby’s set a record when it sold a 100-plus-carat flawless diamond for more than $12 million — fully paid for with cryptocurrency.
All in all, it seems that the global demand for diamonds — at least among shoppers of certain affluence — is reaching a new high.
Natural Diamond Council chief executive officer David Kellie, who leads the industry group responsible for promoting the virtues of naturally sourced stones, particularly among young consumers as lab-grown stones see increased popularity — says much of this new demand is the result of emotions experienced during the crises of the last 18 months.
“All areas of the diamond jewelry market seem to be very strong. They have been really since first coming out of the first lockdowns last May,” he said.
“We spent a lot of research and time looking into why it’s so strong in order to predict whether this is just a short-term reaction or longer-term trend in the market. A few things firstly around the value of diamonds, there is a much heightened sense of emotional connection between people and diamonds that is different from luxury goods. It’s based on a long-term connection. I do think people see diamonds as an investment of long-term value rather than a short-term endorphin rush that one gets when they are normally purchasing products.”
Now with reopenings seen widely across North America and Europe, as well as parts of Asia, the NDC is betting on the second half of the year to continue fueling momentum around diamonds.
“We will have a new campaign that is celebratory about the value of diamonds. We think people will be in celebration mode. Last year was about relationships and we would like to believe that the rest of this year will still be about relationships, but now in the context of travel, excitement and fun. The mood of the global audience is that now is the time to come out and love life and celebrate what we’ve been through the last 18 months,” said Kellie, who thinks this general climate will strongly benefit the diamond industry.
“I think our industry includes a strong personal connection that is backed by brick-and-mortar stores and traditional methods of marketing with strong, independent retailers that have relationships with clients. Now what COVID-19 has done is accelerate how we compliment that with enhanced digital expertise,” said Kellie of strengthened retail infrastructure in the diamond industry coming out of the pandemic.
The NDC is looking to push two new initiatives over the next six months. There will be a focus around promoting recycled diamonds as well as a campaign featuring designers who participate in the NDC’s Emerging Designers Diamond Initiative program.
When companies that sell lab-grown diamonds tout their products as a more eco-friendly alternative to mined stones, the NDC has strongly pushed back — as was the case when Pandora made the switch to an all-lab-grown agenda in May. While the NDC says that mined diamonds provide important economic benefits for the areas in which they are found, recycled diamonds could perhaps be the most sustainable option.
“We are seeing a lot more activity around recycled diamonds, which for us is something we do want to promote because it reinforces the eternal value of diamonds,” Kellie said. “Whether it’s an individual stone from a collection that has to be remodeled or a diamond that’s been passed down — people want to hold onto the value and sentiment of the stones. For us this is a strength that is unique to diamonds.”
But Kellie added not to expect a diamond market trading app similar to Poshmark or eBay anytime soon because recycled diamonds “are more about people wanting to keep the stones around and pass them through generations. So it’s more about creating a new piece of jewelry from a family stone than it is acquiring diamonds or jewelry on the secondhand market.”
Kellie says the NDC is committed to diversifying the design community that works with diamonds. The high level of capital required to jump-start a fine jewelry line has long been a barrier for entry. In January, the NDC started the Emerging Designers Diamond Initiative with Lorraine Schwartz that provides mentoring and underwrites diamond supplies on credit for designers of color in order to help them minimize jewelry business costs.
“We know the strength of our industry is how it’s multigenerational and that means experience — but that’s both a strength and a weakness. It’s not as accessible to people without those connections. The more we can encourage and develop talent, the better. Diamonds speak to different audiences all around the world and diversity is critical to our long-term success,” he said.