Sherry Smith: Shattering the Illusion of the ‘Either/Or’ Diamond Market

For years, the jewelry industry has treated the lab-grown diamond disruption as a standard cyclical turf war. We built our defense around legacy messaging, convinced ourselves the trend would fade, and waited for consumers to return to the status quo.

That never happened. Instead, the market has divided into two distinct segments, each serving a different consumer need.

Independent jewelers need to stop treating lab-grown diamonds as a temporary disruption and start adapting to the reality of a permanently bifurcated market.

The conversation surrounding lab-grown diamonds has reached an exhausting stalemate.

On one side, traditionalists continue to rely on decades-old talking points, attempting to dismiss laboratory-created diamonds as somehow less legitimate.

On the other side, rapid consumer adoption has demonstrated that many consumers simply do not share the industry’s resistance.

By continuing to frame the conversation as a battle between right and wrong, retailers risk alienating the generations that will drive jewelry sales for decades to come: Generation Z and the emerging Generation Alpha.

We also must face an even more uncomfortable reality.

It’s not simply that our messaging hasn’t evolved. For much of the past decade, there has not been the kind of sustained consumer marketing that once created widespread desire for natural diamonds.

Previous generations grew up surrounded by iconic campaigns that made natural diamonds aspirational long before they ever walked into a jewelry store.

“A Diamond Is Forever,” and the expectation of spending two months’ salary on an engagement ring.

Those messages were part of popular culture.

Today’s engagement consumer didn’t grow up with any of that.

They entered adulthood during a period when the industry largely had stopped creating consumer desire for natural diamonds. So, they’re approaching the category with fresh eyes, and asking a very reasonable question: Why should I spend that much on a natural diamond?

During the JCK Las Vegas show this year, a respected industry colleague posed a question that has stayed with me: Did the natural diamond engagement ring industry lose an entire generation?

It’s a provocative question and one that’s worth asking, not because younger consumers reject natural diamonds, but because many were not given the same emotional reasons to desire them as previous generations, who were marketed to for decades.

Even more problematic is the industry’s long-standing tendency to position natural diamonds as financial investments. While there certainly are some exceptions, most consumers will never experience a financial return that resembles a traditional investment.

Consider a common retail scenario.

A client purchases a $20,000 natural diamond engagement ring. Five years later, due to a major life event such as divorce or financial hardship, they attempt to sell it.

The amount they are offered in the secondary market often is dramatically lower than what they originally paid. In that moment, the perception of the diamond as a financial asset quickly dissolves.

Today's consumer is informed, digitally connected, and has unprecedented access to information.

They understand markups. They research pricing. They compare options before ever walking into a store.

If retailers continue to promote natural diamonds using financial arguments that fail to align with reality, they risk damaging something far more valuable than a sale: consumer trust.

The Reality By the Numbers
To understand why the old playbook no longer works, we must examine the generations currently shaping the market.

Members of Gen Z, who range in age from 14 to 29, are entering their prime bridal years and rapidly expanding their purchasing power. 

Unlike previous generations, many members of Gen Z came of age in a period of economic uncertainty, rising housing costs, student debt burdens, and growing concerns about job security in an AI-driven economy.

According to The Knot’s 2026 “Real Weddings” study, 61 percent of engagement rings purchased by couples who married in 2025 featured a lab-grown center stone. 

That growth has coincided with substantial price declines.

According to industry analyst Edahn Golan’s Q1 2026 Lab-Grown Wholesale Price List, wholesale lab-grown prices contracted an additional 14 percent to 15 percent year-over-year, pushing many products closer to production-cost levels.

Today, a premium 1-carat lab-grown diamond may retail between $800 and $1,200, while some direct-to-consumer providers offer entry-level options for only a few hundred dollars.

When a Gen Z couple walks into a jewelry store, they are often balancing the dream of a beautiful engagement ring against the realities of homeownership, inflation, and competing financial priorities.

If a sales associate attempts to convince them that a smaller natural diamond is somehow the smarter financial decision, many simply will choose another retailer.

This economic reality helps explain why lab-grown diamonds have captured significant unit share within the bridal category.

For retailers, however, the challenge extends beyond deciding whether to sell natural or lab-grown diamonds. The more pressing issue is maintaining profitability as lab-grown prices continue to decline. Inventory purchased six months ago may already be worth significantly less today.

Retailers must pay close attention to inventory turn, margin dollars, and pricing strategy rather than relying on the inventory models that worked in previous decades.

Reframing the Natural Diamond Story
Another conversation from JCK reinforced this point for me. 

One of our clients attended nearly every natural diamond presentation during the show. Her takeaway was surprisingly simple: “I didn’t hear anything new.”

I couldn’t help but agree.

Much of the discussion continues to recycle the same messaging we’ve relied on for years. Yet we’re speaking to a generation that never heard the original campaign. 

If we’re going to reconnect consumers with natural diamonds, we can’t simply repeat yesterday’s story. We need new messages that resonate with today’s engagement consumers while preserving what historically has made natural diamonds special.

Encouragingly, some parts of the industry are beginning to recognize that attacking technology is not a winning strategy.

A notable example is De Beers’ recent effort to differentiate natural diamonds through storytelling and rarity rather than direct comparison to lab-grown products. 

Rather than focusing exclusively on traditional colorless diamonds, the company has increasingly highlighted the uniqueness, individuality, and natural origin of diamonds with warmer color characteristics and distinctive features through its “Desert Diamonds” beacon program.

This represents the kind of strategic evolution the industry desperately needs.

Rather than competing on perfection, consistency, or technical specifications—areas in which laboratory production excels—the focus moves toward authenticity, rarity, and individuality.

That is a conversation many younger consumers may find far more compelling than traditional messaging built around obligation or financial value.

In many ways, the diamond industry is beginning to reposition characteristics once viewed as weaknesses into points of differentiation.

Predicting the Horizon: Enter Gen Alpha
If Gen Z disrupted the product mix, Gen Alpha may redefine the very concept of luxury.

Born between 2010 and 2024, Gen Alpha is the first truly digital-native generation; the eldest members of this generation are already old enough to drive. 

Many have grown up purchasing digital assets, customizing virtual identities, and interacting seamlessly between physical and digital environments. 

For this generation, technology is not separate from reality; it is part of reality.

As a result, a diamond created through advanced scientific processes is unlikely to be viewed as “fake.” Instead, it may be viewed as an impressive example of human innovation.

At the same time, widespread availability creates a new challenge: exclusivity.

As lab-grown diamonds become increasingly accessible, some consumers may begin to view them less as luxury goods and more as fashion products. 

Industry data already suggests consumer demand can soften once sizes reach certain thresholds, as big diamonds become more attainable and therefore less exclusive.

This may ultimately reinforce the distinction between natural diamonds and lab-grown diamonds, with each serving a different consumer purpose. 

Lab-grown diamonds may continue to dominate categories driven by value, size, and accessibility, while natural diamonds may strengthen their position as the luxury option within the category.

In a world increasingly filled with AI-generated content, synthetic materials, and digital experiences, there may be growing appreciation for products that are finite, naturally occurring, and impossible to replicate exactly.

Navigating the Dual-Mindset Counter
The retailers who thrive over the next decade will be those who learn to speak two entirely different emotional languages while remaining unbiased guides throughout the buying process.

1) The Lab-Grown Narrative: Utility & Modernity
This conversation focuses on visual impact, smart allocation of resources, customization, and technological innovation.

It acknowledges the realities of today's consumer while providing an accessible path to luxury and self-expression.

2) The Natural Diamond Narrative: Rarity & Heritage
This conversation focuses on scarcity, individuality, natural origin, and emotional significance. The diamond becomes a unique artifact of Earth’s history, something finite, unrepeatable, and deeply personal.

Retailers must stop viewing these narratives as competitors. 

Lab-grown diamonds are a permanent fixture of the modern jewelry landscape. Natural diamonds remain a luxury product defined by scarcity and uniqueness.

Our role is not to decide which option holds greater value. Our role is to create a transparent, educational, and judgment-free environment in which consumers can determine that for themselves.

The future of fine jewelry retail belongs to the retailer who can serve as an agnostic guide.

Consumers are no longer asking us to define value for them; they are asking us to help them determine what value means to them.

The future of our industry isn’t about proving one category superior to the other. It’s about recognizing that consumers purchase for different reasons, celebrate different milestones, and define value in different ways. 

Natural diamonds and lab-grown diamonds can both thrive when we stop asking consumers to choose our narrative and, instead, help them discover the one that best reflects their own.