The Federal Trade Commission recently amended its Jewelry Guides to help prevent deception in jewelry marketing. With new guidance for the jewelry industry, its wide-ranging ruling is a welcome relief to the man-made diamond industry and a migraine-sized headache for the mined-diamond industry. At the end of the day, it’s consumers who will benefit most from the new ruling.
The FTC based its decision in favor of scientific facts, not the mined-diamond industry lobby, giving consumers real information on which to make informed diamond purchasing decisions.
As in many aspects of their consumption, young diamond buyers are socially conscious and value quality and integrity. They want natural stones that are conflict-free and will happily choose laboratory-grown diamonds too.
Last year, when Britain’s Prince Harry proposed to Meghan Markle (now the Duchess of Sussex) he chose a conflict-free diamond from Botswana in southern Africa.
Jerry Singh started his search for a diamond ring with $5,000 and a link to his girlfriend’s Pinterest page.
“Honestly, I had no idea what to look for,” he said. “I was clueless.”
But the 30-year-old software developer quickly narrowed his search to lab-made diamonds. His girlfriend had voiced concerns about “blood diamonds,” he said, and it was clear that his money would go a lot further if he opted for a gemstone that had been shaped over a few weeks in a lab instead of a billion years underground.
Synthetic diamonds provide an alternative for those who question the ethical practices and environmental impact from mining naturally forged stones
Real, or natural, in the vernacular of diamonds, isn’t always better.
While the spectre of conflict and “blood” diamonds have largely faded in recent years thanks to ethical mining practices, international monitoring, and improved certification, diamond mines still leave big holes in the ground and pose a threat to the environment.
Synthetic diamonds are marketed as a solution to customers who are turned off by natural diamonds, all while providing pristine product — and typically priced at 15 per cent to 30 per cent less than similar, naturally forged stones.
The recovery in diamond prices is leaving out the smallest and lowest-quality gems.
For the smallest diamonds, prices are down 15 percent this year, data compiled by Bloomberg show. That compares with an average 7 percent increase for all stones yet to be cut and polished. The overall market is recovering after De Beers and Russia’s Alrosa PJSC cut supply in 2015 to boost sales.
Lab-grown diamonds are not new but their adoption among the consumers and retailers both has only risen significantly over the last few years. This has been primarily fueled by two major reasons. One, growing demand from new age consumers especially millennials owing to the unique appeal of Lab-grown diamonds being eco-friendly, conflict-free, socially conscious, ethical and affordable, qualities that mined diamonds unfortunately fail to provide. Second, technological progress of Lab-grown diamond production and numerous entrants in the arena.
Diamonds grown in the lab have matured enough in size and quality to compete against traditionally mined gems. At stake is the $14 billion rough diamond market.
In its elemental composition, diamonds are just carbon, the fourth most common substance in the universe. A lump of coal is probably its humblest form: brittle, flammable, and entirely unsuitable as a promise and proposal of undying devotion.
But part of the allure of diamonds is how they are forged and transformed by monumental terrestrial forces over eons. Bury pure carbon 100 to 300 miles underground, subjected to extreme heat and pressure over millennia, then wait for volcanic and seismic activity to bring it closer to the surface; now, mine, cut, and polish it to brilliance, and we have—bling!
Can synthetic stones solve the jewelry industry’s problems?
Every morning for decades, the scene on 47th Street between between Fifth and Sixth Avenues in Manhattan has pretty much looked the same. At around 9 a.m., clusters of Hasidic Jews with their long black coats and white beards walk briskly towards their offices, black leather suitcases in hand, past jewelry storefronts that are slowly starting to open for business.
Seen through store windows, employees take out diamond rings, bracelets, earrings, and pendants from the plastic boxes they’ve been safely stored in for the night. Armed policemen patrol around and some stores have security teams of their own — big muscle in dark suits guarding doors and checking the IDs of diamond cutters, polishers, gemologists, and salesmen before anyone enters a building. There are also inconspicuously-dressed bystanders pacing the area, giving the impression that the whole area is being carefully surveilled by undercover cops.
While clearly better than last year’s show, the recent JCK Las Vegas trade show proved that the fine jewelry industry is still far from being out of the cold. Diamond booths were surprisingly busy, and it seems that generally the industry is making strides to combat some of its main issues: generic marketing and lab-grown goods.
Exhibition Business – Jewelry
According to exhibitors at the higher-end venues, Couture and Luxury, business was “good.” Traffic was not high, but those that were there were there with the intention, or at least the willingness, to buy.
For several years, the diamond industry has been grappling with the introduction of gem-quality lab-grown goods to the consumer market. However, even with all the talk, one essential component seems to be missing – hard numbers. Just how many such items were bought by consumers, in what sizes and shapes, in what sales patterns, and most importantly, what do they represent in terms of share of market?
These are essential questions that need to be answered because otherwise how would the natural diamond industry know what it’s facing? If we are to accept it as a given that lab-grown gems are here to stay (and that is indeed the case), then diamond miners, manufacturers, jewelry makers and retailers need to have some basic numbers on hand to understand and plan ahead for this new consumer product.