It’s holiday time—and the media is talking about diamonds. (Yay, says the industry.) And, in contrast to most years, the stories are positive. (Yay again.) Except it’s lab-grown diamonds. (And now the industry gulps.)
As promised, Pure Grown Diamonds has orchestrated a publicity campaign to educate consumers about its man-made gems. They have been featured on Today. In The New York Times. New York Post. Bustle. Local news in New York and Miami. And via a proposal at the Superdome in New Orleans, witnessed by thousands in the stadium and all those watching at home.
Expect more stories to come. Lab-grown diamonds are an interesting story. They are a new, and as a Scio executive told me, possibly “disruptive” product.
I have long felt that the traditional diamond business underestimates the challenge posed by lab-grown diamonds. Industry executives often scoff: What groom will buy a synthetic for an engagement ring? For a symbol of love, people will want the real thing.
News flash: No company will sell these stones as synthetic. And they will stress that they are, in fact, real. (They are right about that.)
Even the head of the Diamond Dealers Club of Australia was impressed by Pure Grown’s marketing stunt at the Superdome:
[The groom’s] statement to his bride and for all of the NFL to hear was:
“This diamond had zero impact on the environment and did not contribute to human rights violations and sporadic violence associated with mining in undeveloped countries where diamonds are found—and it cost a lot less.”
We don’t have to agree or disagree; it is an opinion, and a very solid selling point if used effectively, which in this forum it surely was. The point I want to raise is that the synthetic diamond manufacturers can develop a very powerful marketing strategy on these lines to carve out a significant piece of the pie of the natural diamond segment.
The millennial generation—the group that is beginning to get married and making its first trip to jewelry counters—is a particularly ripe target for this kind of pitch. They are known to be practical (i.e., frugal), they aspire to be socially conscious, and they are intrigued by technology. Lab-grown diamonds hit all of those notes.
Now it’s true, the colored-gemstone industry was able to live with synthetic counterparts. But diamonds are a much more high-profile product—one reason that diamond synthetics have gotten such publicity. And given that many grooms feel “forced” to buy them, they are always tempted to save a few bucks. (See Nile, Blue.)
The traditional diamond industry isn’t doomed by any means, and it shouldn’t panic or feel threatened. All businesses have competitors. The best size up their rivals and respond to them effectively. Right now the traditional industry isn’t doing that.
For a long time, the natural business had—to use a loaded term in this trade—a monopoly in the diamond market. There was only one type of diamond out there. Now there are two. The lab-grown industry is very smartly differentiating itself from the natural business. The natural industry must find a way to differentiate itself too.
This won’t be easy. I don’t like slogans like “natural is real,” which falsely imply that synthetics are fake. But that is not the only arrow in the traditional industry’s quiver, even if that is the one to which it repeatedly defaults. It could talk about that how natural diamonds are poised to increase their value. Or the very real benefits diamonds bring to certain countries. Or how only a billion-year-old product can be “forever.” Or just take advantage of the good feelings for natural items. As a mining executive once said, “If we can’t convince people to buy a natural product over a lab grown, then shame on us.”
After a long respite, the traditional business is again looking at ways to promote diamonds to consumers. Two initiatives have captured attention: the World Diamond Mark (currently being discussed in India) and the Diamond Empowerment Fund’s Diamonds Do Good campaign. Both are very much in their beginning stages, and it will take a lot of money for them to have an impact. But perhaps the recent media blitz for synthetics has woken up the industry up.
One final point: There has been so much publicity about lab-growns recently that, like past campaigns on this topic, there is the risk of sparking demand for a product that (still) isn’t readily available. Reliable production numbers on these diamonds are, as always, fuzzy, but the growing process remains difficult and unpredictable. Pure Grown stocks about 1,000 stones on its site—an impressive number, but not enough if demand really increases—and only a handful of retail stores carry them. (They also aren’t commonly listed at the 40 percent discounts touted.)
Past media campaigns about manmade diamonds—and there have been several over the years—were seemingly aimed more at attracting investors to diamond companies than they were at consumers. (Those investments often didn’t pay off so well, but that’s another story.) Yet they also had the unwitting effect of creating an entirely new industry of simulant e-tailers who used that demand to sell their product, often in misleading ways, causing a headache for the growers that lingers to this day.
That could happen again. Growing demand is important. But it could backfire if it’s not possible to grow enough diamonds to meet it.