In terms of faceting, the distribution is similar to the distribution for natural diamonds

What would you say if you were asked about what, in your opinion, will be the trend of consumer behavior in relation to diamonds grown in the laboratory among American consumers? Do they buy synthetic diamonds consciously, or are these stones so small that they pay more attention to the jewelry, and not to what is inserted into it?

You might be surprised that 32 percent of all lab-grown diamonds sold in the United States have a weight of 1-1.49 carats, judging from data gathered by nearly 4,000 specialized jewelry retail stores in the US by NPD, a retail research firm. Another 26 percent weighed from 0.70 to 0.89 carats. This is 58 percent of the total, and it seems that this is not about small inserts in the jewelry, but, most likely, about the central stones. Taking into account that a number of these products existed in the form of uncontrolled stones in retailers' warehouse stocks, we can conclude that retailers kept them in reserve for customers.

Thanks to successful marketing, consumers are already aware of laboratory grown diamonds, and it is not unusual for them to go to a retail store and ask about them or ask for them. Since the beginning of 2015, many American retailers, who were previously determined against the diamonds grown in the laboratory, changed their minds and now follow the example of their customers.

Growth in market share

During 2015, the volume of purchases of diamonds grown in the laboratory showed steady growth. In January 2016, sales in units increased sharply by 230% compared to January 2015. In the first six months of 2016, sales increased by another 80%, and in July consumers bought twice as many products as they sold in January 2016. Based on the most recent data, the uptrend only increased, as seen in the following chart.

But, despite a sharp increase in sales, you should pay close attention to the trend of changes in the market share for months. In February, May, November and December, there was an increase in sales of diamonds. This period of "romantic" holidays (Valentine's Day, Mother's Day and the holidays at the end of the year), when buying wedding decorations and to celebrate wedding anniversaries. But note that the volume of sales of laboratory-grown diamonds became comparatively less during these periods.

This shows that when buying important jewelry, buyers prefer natural diamonds, they want genuine things and consider laboratory-grown diamonds less romantic. This is a clear opportunity for differentiation, for which the diamond industry as a whole must seize and widen the gap between the purchases of fashion jewelry, which are made from time to time, and those purchases that are made on important occasions. Simply put, positioning diamonds again as luxury goods and bringing the diamonds grown in the laboratory to impulsive, seasonal and inexpensive products.

Since the sales of diamonds are cyclical and since the growth in sales reflects only a certain period - for example, the increase in December means the total demand during the holiday season, not necessarily the peak of interest in the diamonds grown in the lab. From this point of view, it is worth studying the market share in order to understand how a niche of diamonds grown in the laboratory supersedes other diamonds.

In January 2015, sales of laboratory-grown diamonds were less than a quarter of a percent of total sales of unallocated and set diamonds, achieved by specialized retail jewelry stores in the United States. After such a modest start, relatively more products were bought by consumers in the following months.

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In January 2016, this small share of the market grew fourfold and for the first time stood at around 1 percent. The trend for growth continued, and in July 2016, the market share of diamonds grown in the laboratory reached 1.6 percent. Based on the most recent indicators, it can be assumed that the market share will again double by the end of this year.

In terms of faceting, the distribution is similar to the distribution for natural diamonds: 76 percent are round cut diamonds, and 19 percent are princess cuts. The remaining 5 percent of diamond-grown diamonds sold in the United States include several cut diamonds "kushon" and "emerald" (only 2 percent), and several other stones of other cuts.

A lot can be said about the presence of diamonds grown in the laboratory in the middle part of the diamond pipeline. Most of the talk concerns the disclosure of their prosizhdeniya, a test to identify and to what extent a traditional diamond pipeline should or should not participate in the trade of diamonds grown in the laboratory. Most believe that "synthetic diamonds" must be blocked at any cost, but it is clear that the train has already left.

This analysis is based on presentation data held on October 20, 2016 on the Indian Diamond Exchange (Bharat Diamond Bourse, BDB) in Mumbai on behalf of NPD, a retail research firm that collects data on specialized retail jewelry stores in the United States regarding actual performance Sale of diamonds. This presentation includes the demand in the US for natural diamonds.

https://www.gemkonnect.com/blog/americans-buying-more-lab-grown-diamonds-only-real-rocks-romance