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Summary
The diamond market in the USA is experiencing growth like never before. Ethics, sustainability, and investment potential are key market drivers in the current growth environment. Consumers and retailers need to understand the current trends and learn from these insights in order to successfully make their way through the ins and outs of the current market.
Introduction
There is a reason why the USA is known as “The Land of Opportunities.” Those willing to work hard can climb the ladders of success—that’s the American Dream for citizens and immigrants alike.
The USA is a country that keeps on giving for both businesses and consumers. Anyone can start an enterprise and promote it to the fullest without many legal barriers.
From the perspective of a consumer, the United States is one of the few countries that allow people to buy accessories without leaving a large hole in their pocket. That’s why the States is considered one of the largest consumer markets in the world. The result of this consumer-oriented culture is an ever-changing market that adapts to the demands of the consumers. No product is safe from the influx of market trends.
The recent growth of the diamond industry is a great example of this phenomenon. North America is now the largest consumer region for diamond-related products, and the USA is leading the charts.
What are the reasons that led to this dynamic shift? What can we learn from the current trends in the US market? Let’s find out.
Shifting Dynamics: How Did the USA Become the Largest Global Diamond Market?
As per the market analysis report published by Fortune Business Insights, the USA is officially the largest consumer in the global diamond market, valued at USD 94 billion, as of 2023. Most of the business is driven by the jewellery market, and the rest of the business comes from the construction industry that uses diamond tools. Major retailers such as De Beers, Helzberg Diamonds, and Le Vian are planning to expand their market further and bring in more profits.
Diamond jewellery has not always been the people’s first choice of ornament. It was a niche product that belonged to the family of royals and a few elites. The sophisticated instruments required for cutting and moulding diamond stones further increased the value of the product, making it a faraway dream for an average consumer in the 80s.
Today, the narrative has changed. Thanks to advancements in technology combined with altered consumer behaviour, the United States is dominating the global market share and will continue to dominate further in the coming years.
Compared to millennials, GenZ and Generation Alpha give more importance to fashion and personal expression. They are not hesitant to cash out on accessories. This new, generational mindset emphasises living in the present moment fully without any holdbacks.
Market trends have also helped them enable such a lifestyle by significantly cutting down the costs associated with diamond products. Therefore, understanding the crucial dynamics between consumer behaviour and market trends is essential for a diamond jeweller to survive in the current scenario that is brimming with competitors.
Worry not; we are here to help you understand the recent trends in the US Diamond market and the insights you could learn from them.
5 Insights You Could Learn From the Emerging Trends in the Diamond Market
1. Changing Consumer Preferences
Prioritising the customer’s voice has become an integral part of all successful business ventures. The current consumer generation has more purchasing power in the market than ever before. Knowing their preferences can greatly increase your business presence.
There is a rising demand for unique, personalised designs over traditional diamond ornaments. Take the Blue Nile as an example. Their ‘Design Your Own Ring’ campaign allows people to completely select, customise, and personalise engagement rings for special events. This gives a sense of control for the customer, which is a crucial aspect of purchasing decisions.
Preferences towards coloured diamonds have also been on the rise. Celebrities like Jennifer Lopez, Beyonce, and Blake Lively were seen wearing yellow and pink diamond ornaments in public appearances. Influencers are also showcasing unique diamond designs through their social media accounts.
The current generation has a habit of imitating their favourite idols and following the trend. Therefore, in order to flourish in the current market, collaboration with influencers and incorporating celebrities in your advertisements is pivotal.
2. Rise of Lab-Grown Diamonds
Inflation is challenging for the average consumer in the current economy. Consumer prices have gone up dramatically, whereas the average annual income has stayed the same or even lowered. Naturally, mined diamonds have become more inaccessible.
The cost of exporting raw materials from countries such as Russia, Australia, and South Africa further increases the production cost of natural diamond ornaments. The industries associated with synthetic diamonds have taken this as a good opportunity to expand their market in the US.
Lab Grown Diamonds are similar to natural diamonds in chemical properties, but they are relatively cheap. Most lab-grown diamonds sell for around 20 – 40% of the price of natural diamonds. The difference between artificial and natural diamonds is so minute that they cannot be noticed without expert inspection. This has largely increased the popularity of lab-grown diamonds in the US Market.
The large price gap between lab-grown diamonds and natural diamonds has provided a safe space for consumers to spread out their income on different accessories and save money for their future.
Lab-grown diamonds also provide an ethical aspect, promoting responsible accessorising—we will tackle that in detail in the next section.
3. Shift Towards Sustainability and Ethics
For centuries, natural mining was the only source of diamonds. The environmental impact associated with mining is multi-faceted. Firstly, a large area of natural habitat needs to be destroyed to set up a mining industry, adversely affecting the survival of the flora and fauna in the area. In many cases, this involves the displacement of local communities from their homeland—leading to civil unrest and driving up poverty in third-world countries.
In addition, mining is an energy-intensive process that spills large quantities of greenhouse gases into the atmosphere. The carbon footprint left behind by the industry can affect climate change drastically.
The current generation is more concerned with making decisions that minimise environmental exploitation and promote ethical entrepreneurship. More and more people are shifting their lifestyle towards sustainable practices that uphold ethics. This is why the arrival of lab-grown diamonds has been received well as a positive step towards sustainable business models.
All these have led to greater demands for ethically sourced and lab-grown diamonds. Stricter laws enforced by the government have also forced many diamond retailers to go with sustainable practices.
The traceability of the lab-grown diamonds to the producers also ensures better safety for the consumers. Thus, it is safe to say that in the coming years, there will be a hike in synthetic diamonds and laws that support their production.
4. Digital Retail Transformation
Digital media and AI technology have changed the way retailers do business in today’s world. Online shopping is the future, and many companies have chosen to continue their business in the absence of an offline presence. This is more in line with the mentality of consumers who would love to choose and purchase products from within the comfort of their homes.
Moreover, people are using digital marketing through social media to gain more organic traffic for their businesses. The result is a new economy built by the active participation of consumers, influencers, and retailers. Blockchain technology has also allowed a transparent diamond supply that allows consumers to ensure that their diamond is ethically sourced and sustainably produced.
Consumers love to make their purchases after trying on products—and that’s what makes physical stores still a viable necessity.
However, augmented reality and virtual reality tools allow people to visualise how their diamond ornaments look before they buy. This advancement in technology enhances the shopping experience and empowers people to make better purchasing decisions.
5. Investment Potential
The 2022 auction of “Williamson’s Pink Star Diamond” saw an astonishing bid of 58 million US dollars. Different diamonds at auctions around the world have also clocked in at similar high-ticket bids. The diamond market is equally exciting for an investor, considering the history of its pricing.
The rarity, colour, and cut of diamonds can increase their value multifold. In most cases, the value of diamond ornaments rises by an average of 10% each year. This makes diamonds a great investment choice for today’s consumers.
The price of rare-coloured diamonds is also on the rise. For example, according to the diamond registry, the price of brown diamonds has increased from $1500 per carat in 2000 to around $10000 per carat in 2024. This is an impressive 500% increment. The limited supply of brown diamonds is a major reason for this boost.
Investors should keep an eye on the diamond market and look for more opportunities in the coming years.
Vummidi Bangaru Jewellers: Home of Priceless Diamond Jewellery in Chennai
Vummidi Bangaru Jewellers is the home of South Indian decadence. Our legacy is steeped in tradition and quality that goes as far back as 1900 in the beating heart of Chennai, India.
We have over 100 years of successful craftsmanship in the jewellery space. Our exquisite collection of ornaments includes but is not limited to diamond, gold, platinum, ruby, emerald, and other precious materials. No matter the occasion, no matter the person, we guarantee that we have something to offer to satisfy everyone’s taste for accessories.
We understand the factors that decide the quality of our diamond stones. We use natural diamonds screened using GIA melee analysis, which ensures that the diamonds we sell are of DEF colour grade, free from inclusions, and perfectly cut to maximise brightness, contrast, and scintillation. Our retail stores are situated both in the USA and Chennai. To top it all off, we also offer international shipping for our customers.
Avoid the haggle of researching to establish the quality of diamonds. Trust in the legacy of Vummidi Bangaru Jewellers, and put your faith in our ability to help you select jewellery that can make you look timeless and classic in any style.
Visit our website or any of our diamond jewellery stores in Chennai to know more.
Takeaway
- The current consumer generation has different preferences compared to the previous generations.
- Ethically sourced, sustainably made diamond stones are in demand more than natural diamond stones.
- Retailers are shifting their business methods by creating more digital presence and adopting the latest AI technologies.
- There is a surge in investments related to diamond stones. The investment potential is expected to accelerate in the coming years.
- Vummidi Bangaru Jewellers is the place to go for gorgeous diamond jewellery in Chennai that matches the current trends in the diamond market.
| For Latest Updates and Trends Checkout Official Vummidi Bangaru Jewellers Instagram Page |
FAQs Related To Diamond Market In The USA
1. What are synthetic diamonds?
Synthetic diamonds, also known as lab-grown diamonds, are diamonds made in laboratory conditions using artificial methods. The chemical and physical properties resemble that of a natural diamond, but they are relatively cheap and readily available.
2. What are the factors that affect the price volatility of diamonds?
Supply from foreign markets is the major factor that drives the diamond prices. Supply chain disruptions from countries like Russia and South Africa can affect the diamond market in the USA.
3. Why are coloured diamond stones so valuable?
Coloured diamond stones are rare and limited in stock. This makes them more valuable compared to normal diamonds. However, synthetic-coloured diamonds are also rising in demand.
4. How has the diamond market changed post-pandemic?
A major shift in consumer behaviour can be seen in the adoption of e-commerce platforms for purchasing diamonds. Over-reliance on offline stores has been reduced.
5. What are the ethical concerns that drive consumer behaviour?
Nowadays, people prefer ethically sourced diamonds. These have less impact on the environment and are more transparent for a buyer.
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