The diamond industry is highly complex and varied. The presence and development of technology have supported this cause at every stage of the diamond production and their journey to the customer. There are very far impacts of these changes in the industry for all those involved in the dealing of jewelry such as cushion cut engagement rings. Below is a discussion on the various opportunities and challenges of the industry in the year 2019.
Lab-Grown Diamonds
As technology improves, the lab-grown diamonds became easy to manufacture. This means they are cheaper than ever before. In contrast to imitation diamonds, lab-grown diamonds are similar to natural ones in both structural and chemical way.
At present, the lab-grown and natural diamonds are separated by their perceived value and costs.
• Cost: the reduction in the production cost of lab-grown diamonds means that retailers get t use new price points for comparable products. As for consumers, the costly diamond rings may be difficult to purchase while the lab-grown diamond of comparable parameters and equivalent properties must be very much affordable. Therefore, the purchase of a diamond is not a luxury anymore. Furthermore, customers who used to settle for smaller diamonds would now be able to buy larger diamonds.
Apart from these, note that natural diamonds market has become matured a long time ago. This means that their margin is reduced as compared to earlier. On the other hand, lab-grown diamonds are trending and are highly popular. This gives the retailers a better margin to sell their diamonds. This has opened new opportunities for several retailers.
• Consumer Perception: customer perception plays an important role in determining the sales of the diamonds. It has been observed that many people consider that natural diamonds have a negative impact on the environment and for the communities and countries where the mines are located. Meanwhile, there is a perception that Lab-grown diamonds are environment-friendly and a positive alternative to diamonds.
Rising Demand for Diamond Certification
For the average consumer, the varying prices are very confusing and difficult to adapt to. For instance, diamonds that look very similar to the eyes may be entirely different when it comes to the price range. There might even be a difference of thousands of dollars.
Diamond certifications are issued by an unbiased, professional third-party lab. It mentions about the grades, features, and key parameters of the diamond. The price determination takes place based on the information given in the certification.
Earlier the diamonds were very small in size. Otherwise, they were of low value and could not be sold without the presence of certification. It was required only for the sales of larger diamonds. This is not accepted anymore. Nowadays, even the smaller diamonds are sold with certification. This is due to the added demand for transparency and assurance of the diamond’s quality.
Furthermore, the overwhelming presence of lab-grown diamonds in the market has also led to the rising demand for certification. This is mainly attributed to the fact that customers who buy natural diamonds are demanding a guarantee that their diamonds are natural. Similarly, customers of lab-grown diamonds are also demanding proof that they own a diamond and not a CZ or imitation diamonds.
Increase in Melee Supply
At present, the availability of melee diamonds including those of lab-grown and natural diamonds is more than demand. This additional stock has stopped the manufacturing process. Besides, it has brought down the profit of the diamond producers when it comes to the smaller diamond segment.
Meanwhile, the lab-grown melee diamonds are gaining popularity among retailers. Several retailers are not willing to enter the lab-grown diamond market since the cheaper prices of the lab growns cause a decrease in overall revenue. As a result, certain retailers are deciding to choose a natural diamond for the center stone of jewelry pieces. This is supported by lab-grown melee diamonds which are used as the side stones. This has the dual benefit to the retailers that it helps them to keep the revenue up while enjoying the benefit of the reduced total cost to the customers.
Diamond Provenance
The diamond provenance has emerged a long time ago and it is not confined to the diamond industry. The common trend today is that people seek more transparency in the products they buy than ever before. This demand is met by the diamond industry too.
Today’s consumers seek access to the total history of the diamond and its origin. If they are provided verifiable assurance, the happier they are. They want an assurance that the diamond is not a CVD. As a result, the retailers of the story are obliged to provide the same.
The above area few of the key challenges faced by the diamond industry as a result of technological advancement.