Council Post: The New Reality Of Diamonds

Founder and CEO of Forever Companies; lifestyle brands that change the status quo.

The $80-billion global diamond industry has been a tradition-bound business reluctant to change until recently. The advent of e-commerce and price transparency and the introduction of new products such as lab-grown diamonds are helping to transform the industry.

The diamond industry’s business structure, which had worked well for mining companies, intermediaries, wholesalers and retailers, was bound to be disrupted. 

E-commerce was the first body blow to the status quo, as more and more consumers, especially younger ones, began buying diamonds online. Today, millennials and Gen Z customers make up the bulk of online sales, driving revenue on new e-commerce jewelry platforms.

Shoppers are able to scan thousands of diamonds online and compare prices before making an unbiased purchase decision. And among the ever-expanding choices are lab-grown diamonds, which have the identical atomic structure, chemical composition and look as earth-mined diamonds. They sell at prices between 20% and 50% lower than their mined counterparts, depending on their size. 

Traditional diamond companies initially dismissed lab-grown diamonds, believing customers wouldn’t go for stones that didn’t echo the industry’s marketing. But as it turns out, many consumers are delighted by synthetic stones and even regard them as superior to earth-mined stones. Even traditional industry leader De Beers has launched its own line of lab-grown diamonds. 

Disruption is rippling across the industry. For consumers, diamonds have never been more plentiful or, as production costs and prices for lab-grown stones fall, more attainable. Along the supply chain, the traditional industry is worried about a glut of diamonds, and the industry change is squeezing out intermediaries and local brick-and-mortar shops.

This transformation will continue, and even accelerate, as more entrepreneurial players enter the market. As such an entrepreneur, I have observed a dramatic mind shift regarding exactly what a diamond is. The status quo was to think of a diamond simply as a crystal pulled from the earth and cut and polished into a recognizable form, such as an engagement ring. These jewels are beautiful, as always, but we have begun to envision the new future of the industry. 

Created diamonds are an engineered material and, as such, they will ultimately be able to achieve innovative forms. The latest technologies and creative applications provide new possibilities.

What will the diamond industry look like in the years to come? Diamond mining might become too unprofitable to exist. Consumers will participate directly in their diamond’s design through advanced diamond-growing technology. It could result in immersive, interactive experiences that make buying a diamond more engaging and fun for consumers. 

For instance, your diamond could contain an embedded picture, or a favorite saying or song lyric, or even perhaps your DNA. Or you may have a large rough diamond crystal, grown to your specifications, which then becomes a legacy, providing cut diamonds for generations of your family’s engagement rings and jewelry. Your diamond could be an authentic representation of who you are and what you care about.

Digital tools will further enhance online shopping, displaying a selection of rings and stones on the customer’s hand in real time on their smartphone screen. Artificial-intelligence-driven personalization and real human digital interactions such as virtual guide shops could return much of the humanity to e-commerce transactions. The personal touch that was lost with the demise of the small local jeweler can be recaptured, but at scale.

The consumer will control the process to an ever-greater degree. Value will be created by giving the customer a unique and transparent experience.

The companies that choose to be part of this evolving industry will help create a place for all stakeholders where diamonds never become commonplace or lose their significance in people’s lives.

As has always been the case, the success or failure of any retail venture will be based on customer experience. However, that experience will continue to be more virtual, personalized and based on AI-driven data filtering. In the post-pandemic world, that transformation will be accelerated. The companies that embrace this new paradigm and innovate new experiences in ways that surprise and delight customers will own this future.

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