NPD Group data also shows that falling diamond prices don’t necessarily help retailer margins
Everyone in this industry bemoans the lack of reliable statistics. Now, market research firm NPD Group is exclusively sharing with JCK some intriguing data about diamonds at retail and, in particular, how lab-grown diamonds are selling at retail.
NPD’s stats show that while lab-grown diamonds are still having only a minor impact at retail, their sales have tripled:
Lab-Grown Diamonds, Percentage of Total Sales
2016 0.3 percent
2015 0.1 percent
Source: NPD Group Diamond Tracker
“The adoption rate is tiny, but it is growing,” says Chris Casey, the former National Jeweler publisher who is now managing director of diamonds for NPD. “Does it matter now? Not really. But it’s something to pay attention to. It has tripled its adoption rate in a year. Of course, that is off an awfully small base.”
NPD’s data also show which lab-grown diamonds are selling at retail. They appear to be the same kind of diamonds that jewelers typically use in engagement rings: rounds, between 0.7 cts. and 1.49 cts.
Lab-Grown Diamonds Retail Sales by Shape
Round 81%
Princess 18%
Other 1%
Measure: Total units sold at retail, first quarter 2016
Lab-Grown Diamonds Retail Sales by Carat Weight
0.5–0.69 cts. 11%
0.7–0.89 cts. 19%
0.9–0.99 cts. 18%
1–1.49 cts. 37%
1.5 cts. and up 15%
Measure: Total units sold at retail, first quarter 2016. Source: NPD Group Diamond Tracker
“It certainly implies that [lab-grown companies] are targeting the bread-and-butter category,” he says. “There has always been discussion: Do they go small? Do they go big? They seem to be going for the volume play rather than the fringe play.”
On another subject, last year saw decreases in diamond prices. Yet NPD’s data shows that many retailers cut their own prices, rather than pocket the extra margin:
First Quarter 2016 vs. 2015
Total retail carat weight +4.9%
Wholesale cost per carat -5.1%
Retail price per carat +4.74%
Total retail dollar value +0.04%
Retail margin Flat
Source: NPD Group Diamond Tracker
“We used to think of wholesale and retail as disconnected,” Casey says. “But the implication is that there is a much tighter relationship than we thought.” (Possibly a Blue Nile effect?)
NPD gets its data from the point-of-sale systems of major jewelry chains as well as from 1,200 independents. (In exchange for sharing their data, the retailers get access to the rest.) It then sells those stats to wholesalers and others in the pipeline.
NPD hopes to share more data with JCK in the coming months and at its upcoming seminar at the JCK show next month.
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