Once the customer understands the unique story of the laboratory's cultivation of diamonds, the retailer reports a closing rate of 60% to 80%.
The laboratory jewellery market reached $1.9 billion in 2018. By 2023, the industry will grow by 22% annually, exceeding $5.2 billion.
On February 14th every year, Valentine's Day is a romantic holiday. Named after St. Valentine, the martyr who was executed by the Roman Emperor Claudius around 269 AD.
Valentin was imprisoned because he continued to secretly marry Christians after King Claudius issued a decree prohibiting marriage. Since then, he refused to convert to paganism and was therefore condemned.
It is said that St. Valentine put the blind prisoner's daughter back to light in prison and wrote a letter to your "Valentin" before he was executed. Thus, the tradition of sending Valentine's Day gifts was born.
As an official Valentine's Day, there is no doubt that Valentine's Day is the second most popular engagement day after Christmas.
Valentine's Day is also a major gift-giving festival, and NRF expects Valentine's Day gift spending to reach $20.7 billion this year. Although 52% of people buy candy and flowers to celebrate, they spend the most on jewelry, worth nearly $4 billion.
Combining these two facts, it seems that many diamonds will change hands on February 14 this year. Although the vast majority of these diamonds will come from the Earth, an increasing number of engagement diamond rings will be ethically and sustainably cultivated under laboratory conditions.
Demand exceeds supply
According to a new study published by the International Growth Diamond Association (IGDA) entitled “Diamond Selection: The Future of the Laboratory for the Diamond and Diamond Industryâ€, the demand for laboratory diamonds is growing rapidly.
The attractiveness of laboratory cultivation is obvious. When consumers buy mined diamonds, the environmental damage associated with them is high. The mined diamonds represent “the impact is seven times greater than laboratory diamonds. Soil displacement is negligible and there is no irreversible environmental damage,†the report points out Frost & Sullivan's environmental impact analysis.
Once consumers hear that laboratories are legally cultivating diamonds, they are real and chemical, visually and structurally identical to mined diamonds, not to mention cheaper, less disruptive to the environment, and people want them.
It is worth noting that the Diamond Producers Association stated that there are physical growth structural differences between laboratory-grown diamonds and mining diamonds that can be detected by commercial testing equipment.
According to the IGDA survey, nearly two-thirds (63%) of consumers chose artificial alternatives when choosing between 1.9-carat lab-produced diamonds and 1.4-carat mined diamonds at the same price. A jeweller purchaser recently conducted by research company MVI.
More millennials (66%) actively buy engagement rings, saying they would consider lab-grown diamonds, and 23% said they would definitely buy rings with lab-grown diamonds.
On the other hand, DPA provided its own recent survey and found that 44% of diamond buyers did not realize the difference in value, rarity, physical growth structure and origin. The association’s CEO, Jean-Marc Lieberherr, said in a statement to me: “When diamond buyers are aware of these differences, they are at least 71% more likely to purchase natural diamonds.â€
Although jewelry brands are trying to make diamonds a self-purchasing option for women, engagement rings are still the leader in the diamond industry.
In the United States, the diamond bridal market is estimated to be approximately $18 billion, and it is estimated that laboratory diamonds account for only 3% or approximately $540 million, although MVI's Marty Hurwitz estimates that their share will double by the end of 2019.
The market impact that hinders laboratory development is that, first of all, new technologies are just getting started to meet growing demand, especially for larger center quality gems. According to the report, “although the current limited supply level will hinder the growth rate of the industry, it is still difficult to keep up with demand.â€
But secondly, it is difficult for retailers to recognize the sales and profit potential represented by this new jewellery category. As stated in the report, the jewellery industry still adheres to tradition.
“Through the supply chain and the industry that has historically resisted change and slow adaptation, it is now working hard to develop itself and its products because of the inconsistent attitudes and demands of new consumer groups, sometimes associated with traditional diamond philosophy and business. Practice, "IGDA Secretary General Richard Garrad wrote.
Sensational effect
One of the main drivers of IDGA research is the positive impact that the laboratory can produce on diamonds in the retail industry. “Many people in the industry need survival lines to survive, especially at the retail level,†Garrad shared with me. “We believe that the laboratory provides a lifeline for cultivating diamonds. Laboratory cultivating diamonds provides customers with a positive value option at a lower price, while retailers are less profitable.â€
The appeal of this new diamond to consumers is convincing. “Consumers are attracted by the environmental and social responsibility elements of the laboratory-bred diamond story, but the most visible is their ability to trade diamond size and quality at the same price as small-scale diamonds,†the report noted.
Jewelry retailers are in desperate need of such popular rock to serve customers, but few will wake up. The MVI survey found that 54% of the engagement ring shoppers surveyed said they did not show the diamonds produced by the lab when they shopped. However, more than one-third (34%) said they would buy one, and if available, 47% said they would consider it.
Being able to end sales on the spot will give jewellery retailers a powerful opportunity. The industry trade study cited in the study found that “when customers understand the unique story of diamonds in the lab, retailers report a closing rate of 60% to 80%.â€
According to Beth Gerstein, co-founder and CEO of Brilliant Earth, this is the story of cultivating diamonds to customers' sales labs, especially those in the comfort zone tradition of millennial, a ethical source of laboratory growth jewelry. The main participants are online and seven exhibition halls nationwide.
“Many of our customers are attracted to laboratory-grown diamonds because they represent forward-looking technological advances, but they are also a sustainable and cost-effective option,†she said.
“We have seen more and more of the larger, higher quality diamond choices, including more than two carats of diamonds, with higher color and sharpness characteristics and fancy shapes,†Gerstein said, adding that these qualities Engaged in engagement sales, her company used a laboratory to cultivate diamond rings.
Lovers preferred
Today, it is still difficult for customers to find lab diamonds at retail stores, and only about 25% to 35% of independent retailers carry these diamonds. But things are starting to change, because MVI's trade research shows that more than 50% of independents will offer this alternative to customers before the end of the year.
In addition to independents, major players are just beginning to tap their potential. Swarovski and DeBeers now offer a range of diamond jewelry products produced in the laboratory. Berkshire Hathaway's Helzberg Diamonds has more than 200 retail outlets and currently sells lab-produced loose, bridal and fashion jewellery. Its Richline Jewelry Manufacturing Company is testing the Grown with Love Bridal Collection at Macy and JC Penney.
Michael Milgrom, senior vice president of product development at Richline, said in an interview with industry trade publication JCK: "I have been in this business for many years, and I have never seen such a novel and fresh category." "The jewelry industry is OK Predicted. This is unpredictable."
In addition, the report states that Signet Jewelers, the world's largest diamond and jewellery retailer, has more than 2,900 stores in the US, including Kay Jewelers, Jared and Zales, and is expected to test the concept of laboratory planting in 2019, although "no official announcement has been announced "
Bill Koefoed, chief financial officer of online diamond retailer Blue Nile, told JCK, “We sell what our customers want to buy. We are evaluating it. At this point, we don’t do any laboratory breeding diamonds, but for us, shifting It is not too complicated."
Unique direction
While the IGDA report provides dazzling market size and growth forecasts from many reliable sources, I believe the report from independent diamond industry analyst Paul Zimnisky provides the most operational assessment.
Zimnisky estimates that the actual jewelry market reached $1.9 billion in 2018. By 2023, the industry will grow by 22% annually, exceeding $5.2 billion.
According to Bain & Company's “Global Diamond Report 2018â€, the global diamond jewellery market has grown by 2% in 2017, and diamond jewellery spending has remained stable relative to GDP over the past five years.
The diamonds produced in the laboratory are a fresh, bold concept in the jewellery industry that fits perfectly with the spirit of the millennial era and seeks more ethical, sustainable and environmentally friendly choices in the products they buy.
“Diamonds are diamonds, whether they are grown in the laboratory or underground. The biggest difference is in their origin story and consumer values,†said Diamond Foundry CEO Martin Roscheisen.
Note: The Diamond Producers Association's comments were added after the release. Milgrom and Koefoed's statements in the report are from JCK.
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