A new report from US-based jewellery industry marketing firm The MVEye – formerly known as MVI Marketing – has found that the man-made stones have reached a new threshold of awareness and ownership among consumers.
In Gaining Critical Mass: 2020 Lab Grown Diamond Consumer & Trade Research Report, The MVEye revealed the results of its September 2020 survey of more than 1,000 US consumers aged 23-55 who had purchased diamond jewellery in the past three years.
“Lab-grown diamond is a high-margin category that consumers are reacting to positively… Every jewellery chain will have to take a hard look at this category or lose out on it”MARTY HURWITZ, THE MVEYE
The report – which was sponsored by the International Grown Diamond Association and US jewellery trade publication InStore Magazine – found that 80 per cent knew about lab-grown diamonds, compared with less than 10 per cent in 2012 and an increase of 22 per cent in two years.
Notably, 8 per cent of consumers said they already owned a piece of lab-grown diamond jewellery; lab-grown diamonds are currently estimated to represent approximately 2–3 per cent of the market.
Consumers were most drawn to the “size-to-value equation”, with environmental impacts a secondary factor.
The MVEye report estimated that lab-grown diamonds were sold by 38 per cent of independent jewellery retailers in the US. Companies including Signet Jewelers – which owns the Zales, Jared, James Allen, and Kay Jewelers chains – have also begun offering lab-grown diamonds within the past 12 months.
Marty Hurwitz, CEO The MVEye, said, “Lab-grown diamond is a high-margin category that consumers are reacting to positively. Now that Signet is in it, every jewellery chain will have to take a hard look at this category or lose out on it.”
As part of the report, The MVEye surveyed 154 retailers, of which approximately two-thirds sold lab-grown diamonds.
Of those that did stock lab-grown diamonds, 87 per cent indicated that they were satisfied with their choice; 95 per cent stated that their margins were higher for lab-grown diamonds compared with natural diamonds, and the closing rate for lab-grown sales was estimated at 60–80 per cent.
Approximately half of these retailers said that lab-grown diamonds “absolutely” detract from their natural diamond sales.
A similar proportion of retailers who stocked only natural stones indicated they were happy with their current diamond business, with one third saying “nothing could change their mind” about stocking lab-grown diamonds.
Hurwitz said, “Consumers already accept lab-grown diamonds in all channels. The roadblock to the success of this category has never been the consumer, it has been the trade.”
He added, “It doesn’t matter what consumers have assigned that emotion [of love] to, jewellers have to make a profit on it – that’s the goal. Hanging on to just one product that sells love may not be a good idea.”