(Orginally published on GemKonnect on June 1, 2018)
Earlier this month, the Diamond Producers Association (DPA) released the findings of a survey done by the Harris Poll revealing that ‘a clear majority of American consumers (68 percent) recognise that diamonds created in a factory (also known as “synthetic” or “laboratory-grown”) are not “real” diamonds’.
The purpose of the survey was, as stated on the first slide of the survey’s presentation, to “assess the extent to which consumers associate the term ‘real diamonds’ with ‘natural diamonds’.”
On May 29, De Beers, which is the current Chair of the DPA, announced it was launching Lightbox, a brand of synthetic diamond jewellery. This just voided that DPA campaign’s tagline ‘Real is Rare’.
Think about what happens at the retail counter. When a consumer walks up to a Lightbox salesperson and asks whether the diamonds are ‘real’, what will the answer be? ‘No they’re fake?’ Will Lightbox’s product be equated with simulants like cubic zirconia, strontium titanate and synthetic rutile? Of course not! The salesperson will say perfectly honestly, ’yes they’re real diamonds, but they are manufactured in a factory. They are, however, exactly they same as the product from a mine.’
Also, if a customer says he or she can’t afford a natural diamond ring, won’t Lightbox offer an alternative within a budget? The De Beers launch statement said that Lightbox lab-grown diamonds will retail from $200 for a quarter-carat stone to $800 for a one-carat stone.
So as I said at the outset, the tagline on which the entire DPA campaign is based, has just been voided. It was meant to separate the two product lines clearly and establish naturals as the only ones with any value or significance. But we have seen reports from China in the past that couples who couldn’t afford natural diamonds, were very happy with synthetic diamond engagement rings. Could that happen worldwide?
If synthetics can take over the emotional significance messaging that the natural diamond industry has so painstakingly built up over decades, the bottom could well fall out of the market. This is a particularly frightening proposition for those in the middle of the production pipeline. They could get fried overnight. They have carefully built up their relationships upstream and downstream with retailers over years, establishing clear value benchmarks and spending a lot of money and energy on delivering a finely crafted product. If their value proposition is gone, what will they do?
And here are some more bits indicating the unraveling of the DPA campaign. The DPA specifies in its Diamond Terminology Guideline that you cannot use the term ‘real’ for synthetic diamonds. It also says you should not use abbreviated terms like ‘lab-grown’ when referring to synthetics. And here goes De Beers referring to its product as LGDs.
We are, as they say, at a major inflection point in the global diamond industry’s future.