Blog DeBeers' Disruptive Diamond Decisions

[John Pollard]

By and large CVD (which is what probably most +1ct are) are cut on the slightly shallow side so poor cut is going to less of a problem than it is for natural diamonds (and most larger HPHT).

In theory this is correct. In practice I understand producers are still applying GIA cut guides - not "getting" how skewed it is to deep stones. I'm pleased to see the lion's share of LGD going through IGI, where there's not a deep-bias, and a good amount passing through GCAL, who applies a strict and fair system.

 

[diagem]

Yoram - I'm not sure I understand. Are you saying the failed system is the traditional one? Or the Lightbox approach?

I suppose when we snip quotes they get lost in the translation...
I thought bolding that last sentence made it clear I was referring to Rap or better yet the "failed system" in general.., LightBox is too early to tell, but so far they are disrupting the industry almost all by themselves..., far from failing as of now.

 

[Nadiyanoor09]

Congratulations. very nice your post. Before someone mentions cars yes they are more expensive than in the past but they are most commonly sold on payments and the terms have been greatly extended and there is a healthy used car market. very nice your post.

 

[John Pollard]

I suppose when we snip quotes they get lost in the translation...
I thought bolding that last sentence made it clear I was referring to Rap or better yet the "failed system" in general.., LightBox is too early to tell, but so far they are disrupting the industry almost all by themselves..., far from failing as of now.

Understood. And yes, I absolutely agree.

It's crazy, isn't it? DeBeers is responsible for setting 3Cs pricing (carat-color-clarity) of rough to producers, essentially creating the 3/4Cs pricing system "monster" single-handedly... In that context, their re-categorization of LGD pricing is profoundly interesting, and (for me) great drama.

 

[diagem]

Understood. And yes, I absolutely agree.

It's crazy, isn't it? DeBeers is responsible for setting 3Cs pricing (carat-color-clarity) of rough to producers, essentially creating the 3/4Cs pricing system "monster" single-handedly... In that context, their re-categorization of LGD pricing is profoundly interesting, and (for me) great drama.

Why great drama if you dont mind me asking?

If you upload client demand info into the computer, and lets assume client wishes for a 15mm. colorless Asscher cut with a smiling black, white & red micky mouse inclusion on C2 at 12 o'clock, press enter or click..., and voila!!

I totally see the common sense behind the DeBeers actions. I think calculating LGD's based on naturals is continued drama! The sooner this bluff ends, the better for both segments!

 

[caolsen]

I am noticing a similar trend downstream with consumers...
LGD are methodically compared to their natural peers on all the old school habits like for example the 4c's (which dont make any sense!!) But that is because we as an industry are completely stuck creative wise regarding diamond works.

And when LGD are crafted mostly into RB's etc..., (again), and some well known brands sell them at $800 PC (who imagined that De Beers from all companies will communicate diamonds to consumers on a pc basis).., justifying 3D optical symmetry precision or other designer cuts that sometimes can take 1-2 weeks to cut becomes a near impossible task!

Grading is so unnecessary (disclaimer: from the LGD's I crafted & sold, none were accompanied with grading reports), I always offer the option but believe my clients understand the non-common sense in grading schemes developed for naturals.

Your point about grading LGD in the system and scheme create for mined stones is spot on… seems so nonsensical to do so.

 

[oncrutchesrightnow]

Understood. And yes, I absolutely agree.

It's crazy, isn't it? DeBeers is responsible for setting 3Cs pricing (carat-color-clarity) of rough to producers, essentially creating the 3/4Cs pricing system "monster" single-handedly... In that context, their re-categorization of LGD pricing is profoundly interesting, and (for me) great drama.

Creating arbitrary quality classifications and then matching them with price points. It was obvious with carat size but less obvious with color and clarity. (Maybe a little obvious with VS versus SI.) Now we have Lightbox two tier-quality, and JA/BN are also selling two tiers of quality in diamond jewelry. But what about cut quality and the Holy Tables? Should we reduce cut classifications to two tiers? “Pretty” and “ugly?” That would benefit the superideal/specialty cutters and tie the price of LGD to cut.

 

[John Pollard]

Why great drama if you dont mind me asking?

You touched on it a bit in the next parts of your response.

Essentially, to me, it seems like DeBeers' is daring the rest of the LGD world to rethink handcuffing their products to the traditional system - or perish, if they don't.

 

[oceanblue]

Lightbox just added a basics line,

Our new Lightbox Basics ™ collection sets sparkling white stones within a modern sterling silver bezel setting.

Each Basics stone is guaranteed to meet the minimum standard of 'SI' clarity, 'Faint' color, and a 'Very Good' cut – meaning the most sparkle for your budget.

Where the promised 2 carat stones?

 

[Garry H (Cut Nut)]

You touched on it a bit in the next parts of your response.

Essentially, to me, it seems like DeBeers' is daring the rest of the LGD world to rethink handcuffing their products to the traditional system - or perish, if they don't.

Absolutely John, when the cost of grading smaller cheaper stones costs three times more than the cost of the rough - things will definitely change.
When wholesale and retail margins become jewelry industry normal - we will see that De Beers should be making decent profit on Lightbox diamonds. Especially given their patents and decades of R&D.

https://www.google.com/search?q=i+can+make+a+bigger+margin+selling+Lab+grown+diamonds&rlz=1C1CHBF_en-GBAU752AU752&sxsrf=AOaemvIYGWlGGi17c7bTdD-gAN_aZAIKZw%3A1634248632043&ei=uKdoYZvtAdf99QPc4aSgCQ&ved=0ahUKEwibqb_J8srzAhXXfn0KHdwwCZQQ4dUDCA4&uact=5&oq=i+can+make+a+bigger+margin+selling+Lab+grown+diamonds&gs_lcp=Cgdnd3Mtd2l6EAM6BwgAEEcQsAM6BAghEApKBAhBGABQxHlY6rEBYIK4AWgCcAJ4AIAB_gGIAY8fkgEGMC4xNy40mAEAoAEByAEIwAEB&sclient=gws-wiz

 

[John Pollard]

When wholesale and retail margins become jewelry industry normal - we will see that De Beers should be making decent profit on Lightbox diamonds. Especially given their patents and decades of R&D.

You're not kidding. They have been known to put heads on pikes - back at the castle.

https://www.e6.com/en/about/news/iia-infringement

 

[John Pollard]

Breaking news.

DeBeers’ Lab-grown Diamonds Company Begins Selling Loose Stones​

https://www.pricescope.com/communit...selling-loose-diamonds-starting-today.269693/

 

[Garry H (Cut Nut)]

Breaking news.

DeBeers’ Lab-grown Diamonds Company Begins Selling Loose Stones​

https://www.pricescope.com/communit...selling-loose-diamonds-starting-today.269693/

Interesting how their plans keep changing.
Would love to be a fly on the wall at their meetings!

 

[John Pollard]

Interesting how their plans keep changing.
Would love to be a fly on the wall at their meetings!

That would bug them.

 

[Garry H (Cut Nut)]

That would bug them.

BOOM BOOM, or for a drummer

 

[diagem]

Interesting how their plans keep changing.
Would love to be a fly on the wall at their meetings!

Are their plans changing? Not so sure..., more like every step of the way is planned to 2050?

Like I said, they were and I suppose still are the industry's biggest disruptors.

We can just learn from their wisdom!!

 

[tuckie]

Neat convo, y’all. Want to come back to the gender analysis of A Diamond is Forever later. There could have been other ways to attach emotions to diamonds… wonder why adif ended up being the strategy. Ironically it is probably women’s increased earning power that will turn LGD into a wardrobe staple of the middle class. Diamonds last longer than shoes and purses.

So, I think the gender dynamic here is going to be a big, interesting thing. I agree that for couples in their 20s buying their (first) engagement ring, perhaps there will be a lot of continued “mined means more” preferences.

That said, lots of women are buying lab growns for themselves. For studs, for alternate rings, for other jewelry pieces. Perhaps the “ADIF” idea can continue: you want one mined stone, and then you supplement your jewelry box with well-cut, well designed pieces using LGs.

People vary, of course. I own earth mined gems, but recently bought a pair of larger lab grown studs from Jonathan. My own thinking was simple: if there are very well cut LGs available, sure I could afford to buy similar stones for myself that were earth mined, but why?

I also agree with the above posters who suggest that the real losers here will be US Maul stores whose frozen spit just won’t be so attractive given the alternatives.

 

[AprilBaby]

The 2 ct stones are here and sold loose!

 

[diagem]

I also agree with the above posters who suggest that the real losers here will be US Maul stores whose frozen spit just won’t be so attractive given the alternatives.

Funnily from a few colleagues I hear that low included (pique) qualities are currently in hot demand..., especially is they are colorless (or what ever this means).

Go figure this world because to me you make total sense!

 

[tuckie]

Funnily from a few colleagues I hear that low included (pique) qualities are currently in hot demand..., especially is they are colorless (or what ever this means).

Go figure this world because to me you make total sense!

Yes, the “galaxy” or “salt and pepper” trend is baffling! But I was moreso referring to the typical mall poorly cut lower quality stones… I think these stones won’t have as many interested buyers as LGs become more widely available (imho)

 

[Garry H (Cut Nut)]

Yes, the “galaxy” or “salt and pepper” trend is baffling! But I was moreso referring to the typical mall poorly cut lower quality stones… I think these stones won’t have as many interested buyers as LGs become more widely available (imho)

You might have heard thatfirst from me - I have been saying it for a year.
The result will be less investment in prospecting = fewer new mines = rising prices for Pricescope quality diamonds

 

[Garry H (Cut Nut)]

Are their plans changing? Not so sure..., more like every step of the way is planned to 2050?

Like I said, they were and I suppose still are the industry's biggest disruptors.

We can just learn from their wisdom!!

Remember there have been two major ownership changes in the past 20 years.
The Oppenheimer cashed out in 2012 and have just put $5 billion into a family trust in Singapore.

 

[diagem]

Remember there have been two major ownership changes in the past 20 years.
The Oppenheimer cashed out in 2012 and have just put $5 billion into a family trust in Singapore.

Exactly..., when the Oppenheimer's sold De Beers became fully corporate!! 90% of the relationship based interactions (DB SOC - sightholders) disappeared and since De Beers (or Anglo) are only interested in numbers and growth. That's why they are the kings of disruptions, its nothing personal anymore..., just business. (where have I heard this before?)

BTW, I believe the Oppenheimer's are also playing both fields (naturals & LGD's). Its been years since they cashed out. I believe they are free to do as they wish today. It will be interesting following them as well.

 

[diagem]

You might have heard thatfirst from me - I have been saying it for a year.
The result will be less investment in prospecting = fewer new mines = rising prices for Pricescope quality diamonds

Still, its a nice assumption but I cant overlook the natural Pearl industry and their last 125 year history. I believe a similar path for diamonds is unlikely..., but wouldn't cancel it out all together just yet!

I do believe the CS (natural vs synthetic) history might be a more realistic one for diamonds..., but still we need to keep eyes on both for the next few years going forward before we can claim a one scenario possibility.

 

[diagem]

Yes, the “galaxy” or “salt and pepper” trend is baffling! But I was moreso referring to the typical mall poorly cut lower quality stones… I think these stones won’t have as many interested buyers as LGs become more widely available (imho)

Not sure its just the trendy S&P, those are quite a niche at the moment (its a pure selection/picking process)..., I am talking bag loads of heavily included diamonds which come in hundreds of assortments.

I think many new jewelry designers (just look how many new "jewelers" were created by Instagram alone just in recent years) noticed the value hidden within natural diamonds of the lower grades. Yes..., also what is known on PS as "frozen spit" diamonds can be beautiful especially if not round shaped and designed well jewelry wise.

Those "new" jewelers are reinventing the old-world practices, and we older professionals have an opportunity to learn from their successes and failures.

I also believe there is quite a shift in quality for the mall stores that have survived the last 1.5 years, see Signet leading that new movement very successfully.

The jewelry word is in its early revolution stage IMO..., most old-school protocols are getting crushed one after the other while new ones are sculpting their new forms.

Just like the diamonds themselves

 

[diagem]

Breaking news.

DeBeers’ Lab-grown Diamonds Company Begins Selling Loose Stones​

https://www.pricescope.com/communit...selling-loose-diamonds-starting-today.269693/

Some more fine tuning of the facts...,

Brought to us by Rob Bates:
https://www.jckonline.com/editorial-article/lightbox-unmounted-diamonds/

I guess there are some differences after all..

"The loose diamonds will be available in 1 ct. (for $800), 1.5 ct. ($1,200), 1.75 ct. ($1,400), and 2 ct. ($1,600) sizes. While Lightbox has traditionally used its $800-a-carat pricing scheme for both solitaire and total-weight stones, the loose stones will all be solitaires.

The stones will be sold in Lightbox’s standard colors—white, pink, and blue—and in its standard quality range (G-J, VS clarity, very good cut), as well as in its better-quality Finest range (D-F, VVS clarity, excellent cut). Finest diamonds sell for $1,500 a carat.

Lightbox CEO Steve Coe says the change was sparked by consumer demand."

 

[oncrutchesrightnow]

From the jck article:
“I imagine some customers with more modest budgets [might use them for bridal], but to be realistic, those consumers were never going to buy natural diamonds in the first place.“

???!!!People on modest budgets would never buy natural diamonds anyway???!!!

$800 will buy a 0.45 I color SI1 clarity GIA ideal cut diamond from Blue Nile set in a solid 14k white gold setting.

$1,500 will buy a spready half-carat marquise natural diamond in a 14 kt gold ring. Or a low-color 0.7 ct natural emerald cut diamond surrounded by a trendy gold bezel setting. These diamonds would not be spit-on-a-stick. But plenty of customers would dump those natural diamonds in favor of a 1ct LB in a plain setting for the same $1,500 budget.

What about people with a $2000 budget? That’ll get you a GIA-XXX high color, high clarity half-carat natural MRB in a simple solitaire setting. Or a lower quality but still not spit-on-a-stick 0.70 ct natural MRB in the same simple setting. Same money would buy a two-carat LB solitaire on the same band. OR a three-stone LB ring, with one carat in the middle and half carat on each side.

$3,000 budget? Imagine a dozen twenty-somethings deciding between a 0.70 ct natural diamond in a pave halo versus a 1.5 ct LB in a pave halo.

$4,000 budget? If someone doesn‘t think it is possible to get a sweet engagement ring with a decent quality natural diamond(s) for under $4,000 then hold my beer. BUT plenty of people would take a graduated LB 5-stone with a 1.5 ct center and two descending weight stones on either side instead of a ring with one moderately sized natural diamond, or even three natural diamonds. That 5-stone idea actually sounds kind of pretty…

Instagram demands the big diamond. Plenty of “modest budget” people would indeed have bought natural diamonds and those diamonds would have been better than spit-on-a-stick. BUT a whole bunch of ‘em would choose bigger LGDs or a ring with moar side stones. LB modest-quality diamonds will replace more natural diamonds in engagement jewelry than what most people expect.

More from the jck article:
”If their budget is $5,000 to $10,000 for a natural diamond ring, I don’t think they’re going to be distracted by an $800 ring.”

???!!! All right, let’s say you don’t care if you lose a larger-than-expected number of customers with “modest” budgets under $5,000. Apparently some people think the sought-after $5k to $10k budget customers would never go for an “$800 ring.” Try search social media for “CvB” settings and guess what someone with $5,000 total budget might do with an $800 one-carat LB diamond. Or a $6,000 budget and a two-carat LB diamond.

Someone thinking about spending $7,000-$8,000 and who has simple taste in settings probably would not replace a $7,000-$8,000 diamond solitaire with an $800 or even $1,600 diamond solitaire. But three-stone rings can get spendy and why get a one carat natural diamond center-stone with 0.25 ct natural diamonds on each side when for the same budget you could get 0.5 ct LB sides.

People with $9,000-$10,000 to spend still need low-color pave to compliment their low-color large antique natural diamonds.

But I don’t want to get into an internet argument because LB clearly knows how to sell lab diamonds really, really fast. Curious what others think.

 

[tkyasx78]

The Jck article that says that modest budgeted people were not going to buy a natural diamond anyway - what ? I mean WHAT? Really WHAT? I would like to know what they are using to get to this level of denial in their minds because the land of delusion they live in it is not based on any reality I have seen. UM YES, many people save money and then buy the best diamond they can afford. Some will borrow from family or even get a loan if they are not able to afford what they think they "need/deserve" in a diamond. And FWIW -literally- one of the 2 CT stones I got from LB IS REPLACING A NATURAL DIAMOND that I was looking at upgrading with a natural diamond even as of 2 weeks ago. I had been saving and looking at stones I thought would be a good fit for the ring. Instead of replacing that "less than eye clean" center stone with a natural diamond, it is getting a 2 ct LB diamond and will make a great travel ring. The rest of the money can now find a new purpose. Reality is that because of the new 2ct stones some jeweler literally just lost that sale on a natural diamond to a lab one I got from LB for less than a TENTH of the price. Ok back to some semblance of reality that exists for a large portion of people who don't write JCK articles...
______

The following is not meant to offend anyone but to share my perspective ONLY.

From my perspective- I think LB has lost their minds as a business if this is a long term plan. I seriously think they are making a stupid move if this is their plan - long term - to permanently undercut the established lab diamond pricing. Before LB almost all major players in the lab diamond market were selling lab diamonds for less than a comparable natural stone, but - for the most part - they were " playing ball " so to speak price wise knowing that as costs went down over time and quality got better they would have room financially to recoup the costs they had invested in production and then make some return on their investment.

If LB continues over and over to go back on their word ( as we would have to be an idiot not to EXPECT since they have lied repeatedly now) and they turn again and continue on this path of eventually releasing 3, 4 and 5+ carat stones at the 800$ price/ per carat, they are GOING to affect the demand for larger natural stones and prices will drop.

Frankly, if I worked in the diamond business I would be ABSOLUTELY LIVID. When they came out initially they swore up and down they would NOT be setting the stones in rings. ( they will be this fall ) All jewelry would be SS. ( it is now 10, 14 and 18K )They said these would be for fun jewelry NOT for special occasions where a large purchase is the norm. ( FWIW for most people a 2+ carat natural F-H VS well cut diamond is not a "fun" purchase, for most of the nation that is a substantial purchase.) They said it was not going to upset the engagement ring sales as the stones would be small and ungraded. Well THEN the 1 ct stones were released. I bought several 1 carat stones at the time they came out. They were absolutely nice enough for someone to use as starter diamond in a ring. I compared them to my natural stones in my jewelry. The ones I received were colorless ( f or better) cut was more than good enough for a 900 $ stone and clarity was above expectation and 100% eye clean.

These were not the kay's/ jared's/ zales crap quality tiny ice looking squeakers that a 15 year old working at a fast food place gives his first girlfriend. The 1 carat stones I got were nicer than ANYTHING those maul stores even had in stock. If I asked to see a comparable( a VS, E or F decent cut round) they almost universally would tell me they had to order one in.

I have NO DOUBT that with lab stones being sold so low here in the US and combined with the increasing popularity of synthetics, Lightbox and the overseas discount sellers, have put a bigger stone ( lab diamond or synthetic) in almost anyone's budget.

Really though it is a much bigger issue for a jeweler that this will be the NEW NORMAL pricing expectation for many young people. Not just now, but for potentially decades and beyond. Instead of saving some money and getting a lab stone at a few thousand better price than a natural stone-- NOW for less than a down payment on a cheap new toyota you can get a beautiful 2+ ct H , VS well cut lab diamond. Put it in a simple solitaire and you are out the door with tax under 2200 TOTAL.

The generation that is coming of age to marry and buy a diamond for their fiancé did not experience the decades of advertising I did growing up. There isn't an Elisabeth Taylor or Monroe nostalgia when they see a beautiful diamond ring. Even Tiffany's has been sold to LVMH because it couldn't make enough. Many young people don't really understand how diamonds were perceived to my generation due to the "iphone type society" they have grown up in. The advertising this new generation sees is found on the instagram app or what ever is the new rage, and there is a fast fashion society that is easily accessible and for many it is largely bought on credit before they are established.

Selling a lab diamond THIS inexpensive is teaching the younger generation that the pricing like that is to be EXPECTED. I am old. I admit I am old. When someone my age spent 20 or 40K on a diamond as an upgrade I didn't bat an eye. This was to be expected to be the cost for a nice sized ring. This younger generation is being shown that a nice 2 carat lab stone can be had without trouble for under 1.5k with the discount.
I and most of my generation who are "natural diamond hard liners", won't be around in 30 years to buy a 4 ct natural stone from the local jeweler. A decade or 2 into this, the jewelers will be confronted with a different generation of buyers and it will be a completely different market at that point.

This generation has now been shown that 1440$ with discount for a 2 ct H color VS clarity good cut lab stone is entirely reasonable. If/ when in a year or two LB sells 3ct for 2400$ and a 4 ct for 3200$ it will be an even TOUGHER sell for a jeweler to have someone who doesn't remember the marketing I was raised on for a " natural" diamond to fork out money for a 4ct stone when lightbox has them for 3200$

If the industry wants to have enough young people under 40 or so, spend 20-30K+ on a natural diamond at some point - so they can stay in business - with natural diamonds, then they are going to need a LOT OF NEW advertising to be able to convince them that it is acceptable and ok to spend 30K+ on a stone when the exact same diamond at the most basic level can be had for 90% + less in a lab stone. I am not sure the " ethically made" and " no one had to dig for it" line is going to get the younger people to buy a lab vs a natural but I would bet that the VAST the dollar difference is going to speak a lot louder to their wallets.

Many people my age were married when a nice diamond was expected to be given at the time of engagement. Young people in school and on a budget would get somewhere between a .5 to 1.5 carat set in a setting and that was relatively normal. If at 19 you had a 4 carat diamond, you likely had a lot of help from the family. BUT things are different now. Instagram has these young people seeing HUGE rings. Many know they can't afford a 20 carat fancy type ring but they think it is normal to have a much larger stone than was normal 40 years ago. When they first look into a ring they often are sticker shocked to find out that the "modest" 2 or 3 carat stone they thought was so pretty is going to set them back 25k+ .

What LB has done now that they are releasing larger stones and by not even trying to "play ball" so to speak with pricing on the loose 2 ct lab stone stones is going to change the cost of natural diamonds.

The price difference isn't a small percentage. It is a mountain of change different. They have given these younger people an interesting option.

--
Picture yourself 25- 30 ish just out of school or having learned a trade and thinking of getting married. You want a stone big enough to have people see it because lets face it ... few people are "flexing" their .5 carat stone on instagram or what ever app is all the rage now.

Lets say for the sake of argument you are comfortable with a 1.5 or 2 carat center stone size. You have saved a decent sum of money and have a wedding to plan and want a home and family at some point.

1. You can get a synthetic moissanite ( many people get them and are very happy with them) but some still want diamonds even though the marketing for them is no longer what is was for those of us who married prior to 1999. Chemically a moissanite is not a diamond and will not test as one with even a simple tester from the internet. So for some it may not be an option and for some it still will be much like a CZ was 30 years ago.

2. You can pay between 15 and 25K for a natural diamond instead of toward a down payment on a house or the wedding.

OR NOW
3. You can buy a well cut H-VS or better 2 carat lab stone for 1600- 160 = 1440$ and put it in one amazing setting for under 4000 total. If IDEAL cutting really matters to you you can have it recut to ideal proportions for minimal cost. Add a matching wedding band for another 2k if you want to go wild. It is still a diamond, it is going to wear like one, it is going to last JUST as long, it is going to test as one. It isn't even a broken diamond that was filled to look ok not terrible, cant be graded and may crack because you don't know where it was fracture filled. -- This 1440$ stone is visually and for all practical purposes identical stone to a 25K + $ stone except for the origin.

If you are starting looking at current real estate prices and considering having a family after the wedding, do you really want to buy a natural stone at this point? There is no nostalgia that your grandma and possibly mother has for a natural stone. What is the most likely course of action for most of these younger people?

If you are a jeweler, more often than not you have just lost a natural diamond sale. One here or there may not be a big issue, but over time as lab diamonds become more accepted it affects more than just that one person who saved 23K on a diamond.

______________________________________________________________________________________________________

Ok now that I have put my two cents in regarding the Lightbox sales strategy, as a consumer I am thrilled with the new stones.

I am having some beautiful jewelry made as we speak with the 2+ ct stones LB sent to me. When they come back in stock I am buying at least 3 more. I genuinely enjoy looking at my diamonds and will happily design more! The real winner I guess in the immediate future will be my local jeweler who will make money making my custom designs come to life with some new stunning lab diamonds. - I hope they have access to enough platinum for my plans because this will be fun for me.

 

[distracts]

From the jck article:
“I imagine some customers with more modest budgets [might use them for bridal], but to be realistic, those consumers were never going to buy natural diamonds in the first place.“

???!!!People on modest budgets would never buy natural diamonds anyway???!!!

$800 will buy a 0.45 I color SI1 clarity GIA ideal cut diamond from Blue Nile set in a solid 14k white gold setting.

$1,500 will buy a spready half-carat marquise natural diamond in a 14 kt gold ring. Or a low-color 0.7 ct natural emerald cut diamond surrounded by a trendy gold bezel setting. These diamonds would not be spit-on-a-stick. But plenty of customers would dump those natural diamonds in favor of a 1ct LB in a plain setting for the same $1,500 budget.

What about people with a $2000 budget? That’ll get you a GIA-XXX high color, high clarity half-carat natural MRB in a simple solitaire setting. Or a lower quality but still not spit-on-a-stick 0.70 ct natural MRB in the same simple setting. Same money would buy a two-carat LB solitaire on the same band. OR a three-stone LB ring, with one carat in the middle and half carat on each side.

$3,000 budget? Imagine a dozen twenty-somethings deciding between a 0.70 ct natural diamond in a pave halo versus a 1.5 ct LB in a pave halo.

$4,000 budget? If someone doesn‘t think it is possible to get a sweet engagement ring with a decent quality natural diamond(s) for under $4,000 then hold my beer. BUT plenty of people would take a graduated LB 5-stone with a 1.5 ct center and two descending weight stones on either side instead of a ring with one moderately sized natural diamond, or even three natural diamonds. That 5-stone idea actually sounds kind of pretty…

Instagram demands the big diamond. Plenty of “modest budget” people would indeed have bought natural diamonds and those diamonds would have been better than spit-on-a-stick. BUT a whole bunch of ‘em would choose bigger LGDs or a ring with moar side stones. LB modest-quality diamonds will replace more natural diamonds in engagement jewelry than what most people expect.

More from the jck article:
”If their budget is $5,000 to $10,000 for a natural diamond ring, I don’t think they’re going to be distracted by an $800 ring.”

???!!! All right, let’s say you don’t care if you lose a larger-than-expected number of customers with “modest” budgets under $5,000. Apparently some people think the sought-after $5k to $10k budget customers would never go for an “$800 ring.” Try search social media for “CvB” settings and guess what someone with $5,000 total budget might do with an $800 one-carat LB diamond. Or a $6,000 budget and a two-carat LB diamond.

Someone thinking about spending $7,000-$8,000 and who has simple taste in settings probably would not replace a $7,000-$8,000 diamond solitaire with an $800 or even $1,600 diamond solitaire. But three-stone rings can get spendy and why get a one carat natural diamond center-stone with 0.25 ct natural diamonds on each side when for the same budget you could get 0.5 ct LB sides.

People with $9,000-$10,000 to spend still need low-color pave to compliment their low-color large antique natural diamonds.

But I don’t want to get into an internet argument because LB clearly knows how to sell lab diamonds really, really fast. Curious what others think.

I 100% agree with this.

Over half of the people I know who bought engagement rings in the past 3 years or so have gone with lab diamonds. These are upper-middle-class people with quite healthy budgets. But they figured "I don't really care about jewelry, why spend more?" or else "oh, I can get whiter AND bigger for my budget AND get a fancy setting?" Plenty of them have gone with lab diamond + the custom setting of their dreams, which they would have felt weird spending money on if they had spent more on the diamond. Regular people do NOT have the hangup common among PSers that the diamond should be the expensive showpiece and the setting significantly less of the cost. Most regular people don't even view the diamond and setting as separate things but all as one thing - "a ring."

In a way, the diamond industry is a victim of itself - it has spent a hundred years telling people that whiter and less included (even well beyond the point of eye-clean) is worth more and what you want. So now if people realize they have the budget for a nice 1 ct I SI1 diamond, or a 2 ct F VS1 lab diamond - most people aren't going to see the appeal of earth mined stones, but the appeal of the color, clarity, size, and ability to get a more fanciful setting.

Jewelers/setting designers have a real ability to capitalize here and offer a lot more interesting options at appealing price points due to the cost of the center stone going down.

I think cutters also have a real ability to capitalize by offering custom cuts that really show off all the things possible beyond just a standard round brilliant. I know in the MMD forum a while ago I saw someone post a lab grown Octavia and I thought that was absolutely stunning. I've always wanted an Octavia but they are so expensive - I would rather have a lab grown one than none at all, especially since it is the cut less than the exact material I am after.

People right now want unique engagement rings, and if having a LGD enables them to get something more unique in the way of cut or setting, they are going to choose that.

Yes I do think that lab diamonds could eventually go the way of other gem synthetics like corundum - but it would also be really interesting if they continued maintaining a significant market share of "serious" jewelry. I think that's a significant possibility, because many, many people who buy diamonds do so because it is traditional and not because they have a passion for diamonds. For those people, the origin doesn't matter.

 

[aisa901]

I 100% agree with this.

Over half of the people I know who bought engagement rings in the past 3 years or so have gone with lab diamonds. These are upper-middle-class people with quite healthy budgets. But they figured "I don't really care about jewelry, why spend more?" or else "oh, I can get whiter AND bigger for my budget AND get a fancy setting?" Plenty of them have gone with lab diamond + the custom setting of their dreams, which they would have felt weird spending money on if they had spent more on the diamond. Regular people do NOT have the hangup common among PSers that the diamond should be the expensive showpiece and the setting significantly less of the cost. Most regular people don't even view the diamond and setting as separate things but all as one thing - "a ring."

In a way, the diamond industry is a victim of itself - it has spent a hundred years telling people that whiter and less included (even well beyond the point of eye-clean) is worth more and what you want. So now if people realize they have the budget for a nice 1 ct I SI1 diamond, or a 2 ct F VS1 lab diamond - most people aren't going to see the appeal of earth mined stones, but the appeal of the color, clarity, size, and ability to get a more fanciful setting.

Jewelers/setting designers have a real ability to capitalize here and offer a lot more interesting options at appealing price points due to the cost of the center stone going down.

I think cutters also have a real ability to capitalize by offering custom cuts that really show off all the things possible beyond just a standard round brilliant. I know in the MMD forum a while ago I saw someone post a lab grown Octavia and I thought that was absolutely stunning. I've always wanted an Octavia but they are so expensive - I would rather have a lab grown one than none at all, especially since it is the cut less than the exact material I am after.

People right now want unique engagement rings, and if having a LGD enables them to get something more unique in the way of cut or setting, they are going to choose that.

Yes I do think that lab diamonds could eventually go the way of other gem synthetics like corundum - but it would also be really interesting if they continued maintaining a significant market share of "serious" jewelry. I think that's a significant possibility, because many, many people who buy diamonds do so because it is traditional and not because they have a passion for diamonds. For those people, the origin doesn't matter.

You hit the nail on the head in many ways, great post!