Article by Better Diamond Initiative:
The Future of the Diamond Industry
Innovative disruption is one of the most influential business ideas. Netflix disrupted the cable and movie-rental industry by web-streaming movies and TV shows. Uber and Lyft revolutionized the traditional cab industry. The combination of innovative technology with an emphasis on consumer experience, improved entire industries. Within the diamond industry, it is the consumer who is driving disruption. To understand this disruption and its potential, we’ll break down how LGDs (Lab-Grown Diamonds) offer value, and how this will help them improve the outlook of the entire diamond industry.
Breaking the Myth of ‘Value in Origin’
The first area of disruption is in the consumer’s perception of diamonds. Successful marketing campaigns have sold the myth that a diamond’s value is linked to its rarity. Its origin. However, 150 million carats of diamonds enter the system each year—every other woman owns a diamond, and can easily buy one at the nearest mall or online.
In the last 25 years, lifestyles have evolved, and buying patterns have shifted. The diamond buyer is much more educated about the product. Many buyers are realizing that ‘rarity’ is little more than a well-marketed myth.
We have observed hundreds of stores over the last 3 years; it is clear that value is rarely associated with origin. If ‘rarity’ actually dictated decided value, diamond prices would have increased unwaveringly, year after year. Value is more about the emotional weight behind the gifting of a diamond—whether it is a gift from a father to a daughter, or someone’s promise of eternal love. This is the intrinsic value of a diamond, whether earth-created or lab-created.
The Value of Lab-Grown Diamonds to Retailers
Lab-grown diamonds are revitalizing the industry with fresh energy. A quiet revolution is taking place within retail, as sellers observe and respond to more consumers considering lab-grown diamonds every day. Margins are quite impressive even at the mid-stream level, which makes the LGD category quite lucrative and attractive for retailers.
Now, it is upon us, as captains of this industry, to ensure that we respond to this overwhelming consumer mandate. We need to build on the desire for diamonds, and not commoditize them—this will help us create sustainable value.
A Roadmap to the Future of the Diamond Industry
With new energy infused into the appeal of diamonds, LGDs are turning a once-aspirational product into attainable luxury. Technology has the power to create big disruptions and a far superior consumer experience.
Right now, created diamonds are maybe 1% of the industry, but growing at a rate where 99% of the industry seems to be talking about them. A forecast by Paul Ziminisky, a diamond industry analyst, shows that the $1.9 billion lab-grown diamond industry will grow to $14.9 billion by 2035. Our rapid growth shows that created diamonds have opened up new opportunities for the larger diamond industry, disrupting it with an innovative edge and revitalizing it to address the needs of the modern diamond consumer.