A revitalized diamond industry is emerging as new entrepreneurs enter the market—and consumers will be delighted
The $80-billion global diamond industry has always been a tradition-bound business reluctant to change—that is, until now. The advent of e-commerce, price transparency, and the introduction of new products—such as quality lab-grown diamonds—are helping to transform the industry as never before—and all the while renewing our fascination with these captivating gemstones.
Given the diamond industry’s monolithic business structure, which had worked well for those in control—the powerful mining companies, the middlemen and wholesalers who distributed the stones, and the retailers who sold them—change was inevitable.
For too long, these stakeholders had dominated the supply of diamonds and prices, and perpetuated the “scarcity” myth: that these rare stones, formed billions of years ago beneath the earth’s surface, and then presented on dark velvet trays inside jewelry stores, justified their premium prices.
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.
What’s more, for the first time, 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 are created using a complex high-tech process. These gems are gaining in popularity—with good reason—and have the identical atomic structure, chemical composition and brilliant look as earth-mined diamonds, they are in fact “real diamonds” but sell at prices between 20 and 50 percent 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 hype. But as it turns out, many consumers are delighted by man-made stones. Many even regard them as superior to earth-mined stones—not only for ethical and environmental reasons, but also for their purity and value perception. (in a remarkable about-face, even 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; middlemen are being squeezed out of existence; and local brick-and-mortar shops are closing at a rapid rate.
This transformation will continue—and even accelerate—as more entrepreneurial players enter the market and the old guard either adapts or falls by the wayside.
As such an entrepreneur, I have observed a dramatic mind shift regarding exactly what a diamond is—and what it could be. 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—an engagement ring, say, or stud earrings for a special occasion.
These jewels are beautiful and alluring, as always, but we have begun to envision the new future of diamond jewelry.
Created diamonds are an engineered material, and as such they will ultimately be able to achieve forms that only the imagination limits. The latest technologies and creative applications, guided by visionary entrepreneurs and ingenious engineers, will instill a new sense of enchantment and wonder about these stones.
What will the diamond industry look like in the years to come? Diamond mining might become so unprofitable it eventually ceases to exist—albeit to the benefit of planet earth. The connection between an individual and their diamond will become much deeper, as they will participate directly in its design through advanced diamond-growing technology. Immersive, interactive experiences will make buying a diamond more engaging and fun for consumers, whatever their budget.
Imagine, for instance, a unique diamond designed by you and your spouse. Your diamond could contain an embedded picture, or a favorite saying or lyric, or even perhaps your DNA. Or imagine a large rough diamond crystal grown to a family’s particular specifications which then becomes a legacy, providing cut diamonds for generations of that family’s engagement rings and jewelry. Your diamond will 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 perfect detail and real time—all on their smartphone screen. Artificial intelligence driven personalization and real-human digital interactions like virtual guideshops will return much of the humanity to ecommerce transactions. The “personal touch” that was lost with the demise of the small local jeweler will be recaptured – but at scale.
For generations diamond merchants and jewelry companies have completely controlled the customer experience. They have dug up the rough stones and decided how “scarce” they would be. They cut them how they thought best. They designed jewelry according to their whims and mass tastes and then placed the jewelry in a case and said “buy this”.
That whole model is being turned on its head and now the consumer will control the process to an ever greater degree and the benefits and joy they will gain by their ownership of results will be wondrous. Value will be created by giving the customer amazing, unique – and transparent – experiences, not by the opaque machinations of the past.
The opportunities are limitless. The companies – the dreamers, designers and builders – that choose to be part of this evolving and vibrant industry will thrive and create an amazing place for all stakeholders—a place where diamonds never become commonplace or lose their emotional mystique or significance in people’s lives.