Diamonds have not died in popularity. Five years ago, many diamond sellers were terrified of millennials being in the wedding age as they expected this generation to be much less interested in diamonds.
They were proven wrong. The demand for diamonds has increased and so has the demand for custom gems, especially in the US which accounts for over 50% of the worldwide sales. But the industry is changing for sure – the mines have an oversupply of rough diamonds thanks to more effective tools, competition in retail is becoming more fierce, etc.
As people have more unique weddings and try to stand out in how they show commitment to their partners, diamonds are changing with the cultural shifts.
Lab-grown Synthetic Diamonds
Lab-grown diamonds were introduced and have steadily continuously growing in interest and popularity. Now synthetic diamonds make up about 15% of the diamond sales and the industry is expected to reach $27 million by 2023. To meet the skyrocketing demand, companies like Kentucky Advanced Materials Manufacturing (KAMM) built facilities to produce 1,000 lab-grown diamonds per month.
Since its introduction in 2016, the lab-grown diamonds have decreased over 50% in prices year over year. The growing environmental and social responsibility awareness among consumers also contributes to their growing popularity.
What’s surprising is that only 10% of lab-grown diamonds sales are from fine jewelry. Majority of their sales actually are attributed to industrial, medical, and scientific uses. Such versatile usability is the reason why traditional diamond miners are now lining up to win a market share in the synthetic diamonds market.
Diamonds More Affordable w/ eCommerce
While the demand for diamonds have been growing, diamond prices have fallen steadily, dropping by 6 percent in 2019. As more customers (the millennials who are now at the average age at which Americans marry) seek customised gemstones, they are turning to brandless diamonds. While the branded diamonds jewelry accounts for 30% of diamonds revenue globally, today’s consumers are looking for a diamond in the rough in the sea of unbranded diamonds.
Only a handful brands can compete in the branded jewellery market. But thanks to a huge market share of mom and pop retailers and diversified unbranded sellers in this market, buyers don’t seem to mind the brand value as much. They want to find the right cut, clarity, and shape and customise based on their unique tastes.
Diamond industry was not immune to the digital revolution. Now about 87% of shoppers actually search for products online to do their due diligence the way they do for most other products today. And 10% of diamond purchases occur online, which is not as high as other retail industries as diamonds are a luxury commitments. However, this trend is only expected to grow, really reducing the barrier to entry for new players. End -to-end diamond eCommerce sites like Rockher are now available, offering highly improved accessibility and affordability.
Demand for Ethical Sourcing of Diamonds
Environmental and social awareness is becoming a distinct priority for the new generations of diamond buyers. They demand the diamond sellers and miners to ‘prove’ that the diamond is conflict-free, forcing the players to improve transparency of their supply chain.
Colored stones are associated with violence and unethical methods so the industry is now pushing the Responsible Jewellery Council to create a certification process to verify the ethical sourcing of the highly luxurious gems.
Consumer expectations for ethical diamonds now stretch beyond conflicts. They want minimal environmental damage and alluvial mining that forces laborers in Africa into back-breaking work. Currently, 24% of diamonds are mined via alluvial sources and alluvial mining is mostly unregulated.
Customers can find out about the brands’ commitment to these ethical obligations within seconds nowadays so diamond suppliers have to actually invest to make their supply chain not only more ethically responsible but also verifiably eliminate any contribution to environmental damage or human plight.