Columnists

Why Passing on Lab-Grown Diamonds Might Be a Risky Bet

ColumnistsAug 02, 2022

Why Passing on Lab-Grown Diamonds Might Be a Risky Bet

Retailers would be wise to embrace this growing segment of the market instead of shunning it, Peter Smith writes.

2022_Peter Smith.jpg
Peter Smith is an industry consultant, speaker, sales trainer, and author. He can be reached via email at TheRetailSmiths@gmail.com.
The year was, as I recall, 2004, maybe 2005. 

It was a diamond conference at The Plaza hotel in New York. Retailers and suppliers had gathered for a couple of days of education, speeches, and debate on the diamond business and, as it happens, the single most pressing issue of the day for many of the retailers present–online commerce. 

The retailers were having a collective conniption about the specter of online competition, devoid as it was of the geographic advantages that brick-and-mortar stores previously enjoyed, absent any guardrails on suggested retail pricing, and fraught with the uncertainty of the unknown.  

The only thing retailers seemed to agree on was that this new “competition” was going to be terrible for them, and there emerged, unsurprisingly, a mounting chorus of resentment directed at any suppliers that did business with the online retailing pirates. 

On the final day of the conference, Maurice Tempelsman, the statesman-like chairman of Lazare Kaplan and longtime companion of Jacqueline Kennedy Onassis, was taking questions from the audience after his keynote. 

I cannot for the life of me remember what Mr. Tempelsman spoke about in his address, but what followed during the question-and-answer segment is seared into my consciousness. 

One of the retailers raised his hand and, after he was recognized, didn’t really ask a question, but took his moment to make a declarative statement. 

It went something like this: “We are all livid about this selling online business and we think there should be a boycott of any company that does business with online sellers. What do you think?” 

Mr. Tempelsman considered the question for a moment before responding. 

“I see the advent of the online selling as one would a stream flowing down a mountain,” he said. “You can put a rock in its path, but the water will flow over and around the rock and continue on its journey regardless. You could, of course, pretend it isn’t happening, but you would do better to accept the inevitability of what is happening and find a way to work with it.” 

I think about that simile whenever our industry is faced with major disruptive change, and that has rarely been truer than today as we reckon with the emergence of lab-grown diamonds. 

Few issues in recent years have divided retailers like lab-grown diamonds. I’ve encountered some who are borderline militant in their opposition to lab-grown, insisting they will never sell the product. 

I know other retailers who believe lab-grown is the future and have begun to shape their diamond stories accordingly. 

The danger with seismic change is that we often get a shorter runway than we would like before having to make hugely important decisions, choices that can impact our businesses for years to come. 

It is human nature to want to keep doing what we know, to pretend that any disruption will be temporary, or mitigated in its scope. Keep on keeping on, we might say. Alas, that’s not how disruptive change works. 

“While it is easy to become trapped in moral arguments and intellectual debates about lab-grown, we would do well to pay attention to what customers are doing.” 

A cursory look across our industry shows a great many retailers already embracing lab-grown. That includes behemoths Walmart and Signet. It includes Macy’s and JC Penney’s, and online players such as Blue Nile and, of course, Brilliant Earth.

De Beers has Lightbox and we’ve recently seen LVMH, the biggest luxury goods company in the world and parent company of Tiffany & Co., invest in Israel-based Lusix, the first 100 percent solar-powered producer of diamonds. 

What is less evident, but which is becoming increasingly more of a factor, is the presence of lab-grown in the independent retail world. 

According to The Edge Retail Academy, while lab-grown diamond sales are still a small percentage of overall diamond business, independent jewelers grew their lab-grown business on a comparative basis by 45 percent in the trailing 12 months through May 2022. 

ERA estimates loose lab-grown diamonds alone accounted for nearly 6 percent of all sales.  

If we imagine that lab-grown diamonds might soon reach 10 percent of all independent jewelry sales (a conservative estimate given the growth in loose and lab-grown finished diamond jewelry), we might be looking at an $8 billion business in the United States alone before the year is out. 

And that number assumes that we retreat as an industry to about $80 billion in total sales, a number below last year’s $94 billion, but far in excess of our previous historical high of $62 billion in 2019. 

That is clearly a huge amount of business and, for me, the best evidence that the end consumer is telling us lab-grown diamonds matter to them. 

“Embracing lab-grown diamonds is not a repudiation of your business ethics, traditions, or customs. It is not a statement of disloyalty to all those customers who have purchased, and will purchase, mined diamonds from you.” 

Furthermore, the more people buy lab-grown diamond products, the more the psychological barriers to entry diminish, as the social-proof of friends and family members buying lab-grown gives license to others to buy a product they might have harbored some trepidation about in the past. 

While it is easy to become trapped in moral arguments and intellectual debates about lab-grown, we would do well to pay attention to what customers are doing. 

If, as is likely, the 5.8 percent of loose lab-grown diamonds being purchased in independent jewelry stores are being bought disproportionally for engagement rings, that is—pardon the pun—a ringing endorsement from our newest and future customers about what they think. 

That first, and hugely important, first major jewelry purchase will set the tone for their views on lab-grown and opting out of that conversation is not a decision that should be taken lightly. 

Embracing lab-grown diamonds as an option is not a repudiation of your business ethics, traditions, or customs. It is not a statement of disloyalty to all those customers who have purchased, and will purchase, mined diamonds from you. 

 Related stories will be right here … 

While we’ve all been consumed in the COVID economy for the past couple of years, the landscape has changed, and things won’t ever go back to how they used to be. 

Having a lab-grown offering that complements your natural diamonds, adopting the same standards of curated stories, training your teams on the benefits of mined and lab-grown, and presenting your customers with both options would seem, to me, to be a smart business move. 

Having both options ensures that you won’t be perceived as defensive when a customer asks, as they will increasingly do, about lab-grown diamonds. You will have the credibility to speak to the benefits of both in a way that simply won’t be possible if you fail to provide both options to your customers. 

More importantly, as we return to a more challenging retail environment, opting out of a potential $8 billion business feels like an awfully risky bet.   

The Latest

Stafford’s Diamonds closing ad
IndependentsMar 14, 2025
Stafford’s Diamonds in Ohio to Close After 40 Years

The Dayton-based jeweler, which has been in business since 1985, was formerly known as Stafford Jewelers.

Alan Zimmer
Events & AwardsMar 14, 2025
JVC Reveals Recipient of Stanley Schechter Award

Reeds Jewelers CEO Alan Zimmer will be presented with the honor at JVC’s annual luncheon.

Sorellina’s Aries Zodiac Pendant
CollectionsMar 14, 2025
Piece of the Week: Sorellina’s Aries Zodiac Pendant

The piece, celebrating birthdays from March 21 to April 19, debuted with Sorellina’s new line of astrological pendants.

Supplier Spotlight -Recorded-Webinar.png
Brought to you by
Watch: GIA Field Gemology at the One-Hundredth Expedition: A Look Back and to the Future

Supplier Spotlight Sponsored by GIA

Tanishq Atlanta store
MajorsMar 13, 2025
Tanishq Opens 2 New Stores in the U.S.

The Indian jewelry brand recently opened stores in Atlanta and Seattle.

Weekly QuizMar 14, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Woman wearing Brilliant Earth jewelry
FinancialsMar 13, 2025
Brilliant Earth’s 2024 Sales Struggled Amid Engagement Recovery

CEO Beth Gerstein shared its most popular price points, what’s trending in non-bridal fine jewelry, and its holiday performance.

Chopard Insofu emerald collection
CollectionsMar 13, 2025
Chopard Unveils High Jewelry Collection Created From 6,225-Carat Emerald

The 15 pieces were crafted from the “Insofu” emerald, discovered in Zambia in 2010.

Facets-of-Fire-Difference-You-Can-See.jpg
Brought to you by
Natural Diamonds Should Mean More

Natural diamonds mean more than lab-grown, but when every cut is ideal, they all look the same. Customers want more—Facets of Fire delivers.

Chris Anderson
MajorsMar 13, 2025
Jewelers Mutual Names New CFO, Treasurer

Chris Anderson is joining the insurance provider as the new chief financial officer and treasurer.

Jewelers of America’s new natural and lab-grown diamond brochure
Lab-GrownMar 13, 2025
JA Offering Some ‘Counter Intelligence’ on Diamonds

Jewelers of America is distributing a brochure for retailers to use when discussing the differences between natural and lab-grown diamonds.

A rough diamond and a polished diamond
SourcingMar 12, 2025
5 Factors That Will Impact the Diamond Industry in 2025

The industry is changing as it grapples with new realities around distribution, supply, and the need for consistent, effective marketing.

New Gem & Jewellery Export Promotion Council Chairman Kirit Bhansali
SourcingMar 12, 2025
Q&A: New GJEPC Chairman Kirit Bhansali

Bhansali discusses the potential impact of U.S. tariffs, demand for diamonds by market, and the “cautious confidence” in India right now.

Limelight Lab Grown Diamond store in India
Lab-GrownMar 12, 2025
Beyond Jewelry: Possibilities in the Lab-Grown Diamond Sector

As lab-grown diamond brands pop up across India, academics are researching how to grow demand outside of the jewelry industry.

Diamonds Do Good honoree Govind Dholakia at medical camp
SourcingMar 12, 2025
Indian Leader, Retailer Among 2025 DDG Honorees

Govind Dholakia and Tanishq will be recognized for their contributions to the industry at the Diamonds Do Good Awards in Las Vegas.

Marla Aaron Liberty London Shop-in-Shop
IndependentsMar 12, 2025
Marla Aaron Migrates to London

The New York City-based brand has opened its first U.K. location with a permanent shop-in-shop at Liberty in London.

Medieval sapphire bishop ring
AuctionsMar 12, 2025
A Medieval Bishop’s Sapphire Ring Is Going Up for Sale

A metal detectorist discovered the ring that is believed to have belonged to a bishop in the late 12th to early 13th century.

JA New York sign
Events & AwardsMar 12, 2025
JA New York Announces Education, Live Demo Lineups

Organizers looked to new partnerships and interactive experiences to enhance the spring show, set for March 16 to 18.

Jewelers Vigilance Committee annual luncheon 2025 logo
Events & AwardsMar 12, 2025
Bogolo Joy Kenewendo to Speak at Annual JVC Luncheon

Kenewendo, Botswana’s minister of minerals and energy, will discuss the future of diamonds.

Jaythan Lawrence Gilder and body scan
CrimeMar 11, 2025
Man in Florida Swallows Allegedly Stolen Tiffany & Co. Jewelry

The suspect allegedly stole almost $800,000 worth of diamond jewelry from a store in Orlando and then swallowed it during a traffic stop.

Marco Bicego 25 Years Campaign Isabeli Fontana
CollectionsMar 11, 2025
Marco Bicego Celebrates 25 Years With Collection, Campaign

Founded in 2000, Marco Bicego is commemorating its milestone anniversary with a “25 Best” collection and campaigns honoring its heritage.

Hill & Co The List
TechnologyMar 11, 2025
Hill & Co. Launches New B2B Buyer Database

Those attending the company’s upcoming Zoom workshop will receive early access to “The List,” its new resource for finding buyers.

Amy-Elise Signeavsky GIA
Events & AwardsMar 11, 2025
JSA to Honor GIA Employee at Annual Luncheon

The organization will present an award to Amy-Elise Signeavsky, law enforcement and diamond recovery manager at GIA.

Picture of Terry Chandler, president and CEO of the Diamond Council of America
MajorsMar 10, 2025
Terry Chandler to Retire After 24 Years as Head of DCA

Chandler started his jewelry career at Michelson Jewelers, joining the Diamond Council of America as president and CEO in 2001.

MaeVona King of the Mountains Torc
CollectionsMar 10, 2025
MaeVona Co-Founder Debuts 3D-Printed ‘Tùsaire’ Collection

Scottish American designer Maeve Gillies collaborated with Platinum Guild International on jewelry created by direct metal 3D printing.

The Jewelry Symposium 2025 Scholarship Winners
Events & AwardsMar 10, 2025
The Jewelry Symposium Announces 2025 Scholarship Winners

Ahead of its trade show in May, TJS awarded free registration and accommodations to five up-and-coming jewelry industry professionals.

Gem Awards New York City
Events & AwardsMar 10, 2025
These Designers, Journalists, and Retailers Are Up for a Gem Award

The 2025 Gem Awards are set to take place Friday at Cipriani 42nd Street in New York City.

Jane Fonda, America Ferrera, Mariska Hargitay, Laura Harrier, Mattia Furlani, Gianvito Martino, Sabina Belli in Pomellato International Women’s Day campaign
MajorsMar 07, 2025
Jane Fonda, Mariska Hargitay Star in Pomellato’s IWD Campaign

The annual star-studded campaign for International Women’s Day encourages collective action against domestic violence.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy