More lab-grown diamond jewelry in stores and a wedding boom in 2022 is the formula for explosive growth

0


2022 will be the year of marriage. According to the marriage report, some 2.5 million couples will marry next year, after a two-year lull when only 1.3 million people were married in 2020 and 1.9 million in 2021. This will break a previous record of marriages set in 1984.

Not only will a historic number of couples marry next year, but they will spend more on their weddings. The average cost will reach $ 24,300, up 8% from the $ 22,500 spent in 2021. This will be good news for the many businesses that rely on the wedding business, such as venues and caterers, photographers. , planners, florists, bridal wear, tuxedos and limousine rentals.

But especially jewelers will benefit from the wedding boom, as couples spend more on their engagement ring – $ 5,500 in 2020 plus $ 900 for a woman’s wedding ring and $ 500 for a man – than any other category after direct reception costs, such as venue rentals, food and drink, according to The Knot.

Unlike other service companies serving the bridal market, jewelry retailers won’t have to wait until 2022 to take advantage of the largesse. Their season will begin this fourth quarter, as December is the best month to get engaged. This means that couples will start shopping for their engagement ring and wedding jewelry in October and November.

Another choice this year

Buying a diamond engagement ring is often approached with trepidation. Understanding the complexities of 4Cs – Cut, Color, Clarity, Carats – and translating that into price is confusing for an individual or couple buying a diamond for the first time.

And deciding where to make that life-changing purchase adds even more complexity. While online jewelry retailers like Blue Nile and James Allen have captured a greater share of the diamond engagement market, only 11% of couples bought their engagement ring online last year, according to The Knot. . The vast majority still prefer to go to a jewelry store and make their purchase there.

When they show up at the jewelry store counter this year, they’ll have another decision they wouldn’t have faced just two years ago: buy a natural diamond mined or grown in a lab.

For years, lab-grown diamond jewelry has existed in an alternate online universe. Traditional jewelers and brands shunned the category, so the only place to buy them was online, out of sight. But the tide is turning.

Transition to physical retail

More and more digitally focused jewelry brands are now entering brick and mortar retail, such as Brilliant Earth now with 14 showrooms and Diamond Foundry jewelry brand VRAI has just opened its doors. first storefront in the United States in Los Angeles.

And by the way half of the country’s independent jewelers will stock them this year, according to Marty Hurwitz of MVEye, including major regional chains like Michael’s and Reeds.

But more importantly, Signet, the country’s largest jewelry company with its Kay, Zales and Jared stores and the world’s largest diamond retailer, now also offers lab-grown diamonds, having first tested the attraction of the online category under its James Allen banner from 2020.

“As a consumer-inspired company, we bring both natural diamonds and lab-created diamonds to our new and loyal Signet customers. We have expanded our offerings at our Kay, Zales and Jared sites, ”explains Tonia Zehrer, senior vice president and chief merchandising officer.

“While natural diamonds continue to have great appeal to customers, lab-created diamonds offer an additional popular choice with customers looking for larger, quality stones at fantastic prices,” continues Zehrer.

Signet’s decision to sell lab-grown diamonds in its stores is a turning point in industry acceptance of this emerging category.

“Now that Signet is in it, other jewelers will have to take a close look at this category or lose it,” says Hurwitz. “There are still a lot of die-hard diamond traditionalists, like Tiffany and Cartier, who continue to resist it. But who wouldn’t want the most requested thing in their store? “

Seeing is believing

The shift from the digital world to physical retail is a natural progression for an innovative product, like lab-grown diamonds, for an expensive and emotional purchase, like engagement rings.

“Consumers are looking for an experience and jewelry is an experiential product. A beautiful piece of jewelry is sold over the counter, not by a picture. It all depends on how he or she feels when wearing it, ”says Amish Shah, President of ALTR Created Diamonds, part of the RA Riam Group, a family business specializing in natural and lab-grown diamonds.

“When you buy a $ 5,500 engagement ring, you want to have someone to return to for the service. The consumer wants to walk in the door and feel taken care of, ”Shah continues.

It’s in the store where the customer can see in person how even further their $ 5,500 budget goes to buy a lab grown vs. mined diamond that the decision becomes easier.

All the boats rise with this tide

Dollar for dollar, a customer can get a larger, comparable, if not better, stone with a lab-grown diamond, which is exactly the same chemically and structurally as a natural diamond.

This is more significant when consumers consider an engagement ring where the center stone is the star, but the greater accessibility of lab-grown products also expands the overall diamond jewelry market.

“Today, retailers can offer four-carat lab-grown diamond earrings that would have been prohibitively expensive before. And that further expands the bracelets and necklaces business, ”Shah says. “Cultivated Labs have expanded the bandwidth of the jewelry market, and their market share is growing several times faster than the jewelry market as a whole. ”

Brittany Lewis, Marketing Director for WD Lab Grown Diamonds, one of the country’s leading diamond producers, believes adoption of lab-grown diamonds by traditional retailers will allow the category to grow even faster in the future. .

“It’s about educating consumers and adoption by retailers is the main driver of growth there,” she says. “Consumers are also intrigued by the story of sustainability, but not all are cultivated to the climate neutral level certified by WD. As consumers learn more, compare the price-value relationship, and understand the sustainability certification we offer, this becomes the deciding factor. Consumers want to buy from a retailer they trust, where they have established a relationship or are part of a community.

MVEye research confirms the comparative appeal of cultured laboratories. Jewelers who sell lab-grown products report a close rate of between 60% and 80% once customers learn more about the product.

To date, the only limiting factor for lab-grown growth has been limited supply, especially for larger carat and better quality chemical vapor deposition (CVD) stones. Lewis shares that his company just completed a large research study that found that 70% of the jewelers surveyed faced constraints in first-hand sourcing of lab-grown diamonds. His company responds to this by increasing production and efficiency through its Washington, DC plant.

“There is so much more demand than any diamond producer can supply,” says Lewis. However, MVEye’s Hurwitz reports that the industry is quickly overcoming its supply limitation with more than a dozen large, leading producers, like WD, working overtime to meet demand.

All aboard

For the remaining 50% of independent jewelers still on the verge of wearing lab products, Hurwitz has one final fact that should make the decision easier: better margins. More than three-quarters of jewelers surveyed by MVEye said the margins of lab-grown diamonds were 16-40% higher than those of mined diamonds.

“It’s not a choice either / or, but both,” he says. “There’s not a lot of cannibalization going on. Instead, lab growers are cultivating all the jewelry diamond pie, expanding the market and attracting new customers. “

Even though awareness is high – 80% of jewelry consumers have heard of lab-grown diamonds – until this year, they have had little opportunity to see and experience them in real life. On the contrary, they had to rely on the often inadequate displays on the computer screen.

Comparing lab-grown diamonds side-by-side with mined diamonds could trigger an even bigger boom in lab-grown sales, especially as the wedding jewelry market takes off from this fourth quarter.

“Products grown in the lab are quickly becoming mainstream,” Hurwitz reports. “It’s not against each other, just a new category for consumers to choose from. Plants grown in the lab have a very appealing history to consumers. This fourth quarter is where we start to see the category really evolve.


Share.

Leave A Reply