Swarovski recently reported a substantial increase in sales over the past financial year, driven by the popularity of lab-created diamonds. A recent study from the US found that 52 per cent of couples purchased an engagement ring featuring lab-created diamonds in the past year.
In contrast, while sales at Signet have declined in recent months, the company has reportedly prioritised a more apparent distinction between natural and lab-created products.
In an interview with JCK Online, diamond industry analyst Paul Zimnisky said that many jewellery retailers need to review strategy around diamond jewellery sales.
“I can definitely feel the narrative changing. There’s been this incessant narrative that lab-grown diamonds are God’s greatest gift,” Zimnisky said.
“There’s nothing wrong with them, but I think the industry is putting itself in a difficult position given how heavily it’s promoting lab-grown. A customer comes into a store looking to buy a diamond, and in their mind, it’s a mined diamond, but the salesperson tries to steer them to lab-grown.”
He added: “Salespeople are convincing guys to spend less and get a bigger diamond, that they’re dumb if they don’t. The tricky part is the actual price is falling, and it’s starting to affect the top line.”
Signet CEO J.K. Symancyk recently detailed plans to reorganise the company’s brands to target specific groups of consumers better. He suggested that lab-created diamond sales have improved by 60 per cent across three key brands.
In recent months, Pandora has been another major brand reporting strong demand for lab-created diamond jewellery.
Zimnisky suggests that creating a more precise understanding among consumers about the differences between the two categories is critical.
“The industry is doing itself a disservice by conflating the two and telling customers they’re the same,” Zimnisky continued.
“I’m concerned about longer-term implications. It’s not too late to address this. It’s extremely important to delineate the two products. I tell retailers, ‘Sell one or the other. If you’ve traditionally sold natural and want to sell lab-grown, open another store, segregate it.’”
He added: “There’s been deflation in the entire category — natural prices are down, lab prices are down. It’s enough to wake up the entire industry.”
Interestingly, Zimnisky predicted that in five years, the widespread availability of large, high-quality lab-created diamonds would be so widespread that, broadly speaking, the industry would gravitate back to natural.
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