Millennials have been a major target group for the Lab-grown diamonds industry, fuelled by the eco-conscious nature of millennials, which is proving to be a boon for Lab-grown diamonds. In past years, this nature of millennials has resulted in major drop in market share of many mined Diamond jewelry retailers including Signet Jewelers, Tiffiany & Co., Blue Nile et al.
According to an estimation by Morgan Stanley, Lab-grown diamond industry represents less than 1% of the global market for rough diamonds. The sales are estimated to be between USD 75 to USD 200 million only. However, it also predicts that by 2020, Lab-grown diamonds market would grow to 15% for gem-quality melee diamond and 7.5% for the larger diamond market.
Millennials would be the reason for these increased sales and market share of Lab-grown diamonds, according to a study by MVI Marketing. It says, about 70% of millennials would consider buying a Lab-grown diamond while buying an engagement ring.
MVI Marketing conducted a survey consisting of 1,000+ American consumers aged between 21 and 40 years. The sample size was across all income ranges, half of them being from the household income of USD 50,000 or higher. With the 70% of them saying ‘Yes’ to buying a Lab-grown diamond over a mined, it represents an increase of 13 percentage points compared to last year, where only 57% millennials agreed. In 2016, only 55% respondents said they would buy Lab-grown diamonds in a similar survey by MVI.
Marty Hurwitz, CEO of MVI Marketing says, “Millennials are telling the jewelry industry this is a product they are interested in and will come into the store to look at it. To ignore that opportunity, which is both profitable to the trade and valuable to the consumers, is a huge mistake. For an industry struggling to get millennials in the door, the answer is right in front of their eyes.”
Millennials prefer buying larger stones, grown in a laboratory of the same price as a smaller mined stone.
Hurwitz says, “Lab-grown diamonds have a very attractive value proposition. Jewelers can either position them at a discount or offer the bigger-stone value proposition. They are doing both. But the ones that are offering the choice are selling a growing number of lab-grown engagement rings relative to mined diamonds. If you are a retailer and consumer come in with $5,000 budget and you have both products, you don’t want to reduce their budget. Just let them spend the same amount for a bigger stone”
When it comes to bigger diamonds, WD Lab Grown Diamonds just announced that it grew a 9.04 Carat I Color, VS2 Clarity, IDEAL cut, Round Brilliant CVD diamond this March at the company’s Washington DC area Lab. This by far is the world’s biggest gem-quality CVD diamond. WD grew a 6 Ct. Lab-grown CVD diamond in January and with this recent feat of 9 Ct. CVD diamond, the company broke its own record. WD Lab Grown Diamonds has the exclusive license for The Carnegie Institution of Washington’s single crystal CVD diamond growth tech.
Many millennials also believe they would rather save money and buy a gem that is both sustainable and ethical in nature than a stone mined from the ground having negative impact on both environment and humans. According to Kathryn Money, Vice President of Strategy and Merchandising at Brilliant Earth, Google searches for Lab-grown diamonds have tripled in the last decade.
Vishal Mehta, CEO of IIA Technologies in Singapore, commenting on the influencing factor of Lab-grown diamonds said, “We are creating a new industry. Consumers today really resonate with the idea of an eco-friendly and a conflict-free choice for diamonds. That’s been a sticking point.”
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