Demand for Natural Diamonds Affirmed
• De Beers ‘Flash’ reports that around or below $1,000 is what the US consumer is willing to pay for an item of lab-grown diamond jewellery
Despite the challenges experienced in 2020, United States consumer sentiment has expressed strong demand for diamond jewellery throughout the fourth quarter of the year, outstripping demand for other luxury categories and apparel, as they sought out purchases with emotional meaning and enduring value, according to De Beers Group’s sixth Diamond Insight ‘Flash’ Report, published on Tuesday.
De Beers Group’s latest Diamond Insight ‘Flash’ report highlights positive demand trends for natural diamonds over the US holiday season and how attitudes to lab-grown diamonds are evolving.
The diamond giant retailer states that interviews revealed strong consumer demand for classic diamond jewellery pieces while research undertaken by De Beers Group in March 2021 also showed that desire for quality and lasting value is expected to continue, with 88 percent of US consumers surveyed saying they believe that it is better to invest in fewer but better things than in items which are fashionable but may not last.
The same report reveals insights from the latest round of De Beers Group’s bi-annual lab-grown diamond (LGD) tracker via 360 Market Reach, with a national panel of 5,000 respondents. The study found increasing awareness of LGDs among US consumers with about two-thirds of fine jewellery consumers aware of the concept allied to a growing perception that LGDs occupy a distinct position in the category as a new trend that is modern, fun, and appealing for impulse or self-purchase.
The research showed that consumers differentiate natural diamonds from LGDs by attributing to them the key category of “authentic” (60 percent against 6 percent for LGD); “romantic” (41 percent vs. 6 percent for LGD); and “would make me feel special” (37 percent vs. 3 percent for LGD). The top US consumer concerns regarding LGDs remained that they were not as rare as natural diamonds and would not retain their value over time, with seven out of 10 consumers stating that they would not pay more than $1,000 for a piece of LGD jewellery.
De Beers has explained that at least 47 percent of consumers did not agree with the statement that lab-grown diamonds are “real,” stating that consumers will still consider acquiring them as they are perceived as “fun” and “fashionable”, cost less than natural diamonds, and are seen as good for a self-purchase item as an alternative to apparel or leather goods.
A March 2021 De Beers consumer survey highlighted similar consumer sentiment regarding the value of LGDs. In a scenario where consumers buy LGD jewellery and the price of LGDs drops by 50-60 percent over the subsequent two-year period while natural diamonds remain priced the same or higher, more than half (52 percent) of American consumers would either be less likely, or simply refuse, to buy fine jewellery from jewellers who sell them this product. This negative impact is strongest for women, at 58 percent.
Commenting on the research findings, Steve Coe, CEO of Lightbox Jewellery, stated: "We have always sold our LGDs at a fair and transparent price, derived from a reasonable commercial margin above the actual production cost, rather than hitching it to what a natural diamond’s value might be. Recent LGD price falls simply indicate that we are today where others will likely be tomorrow.”