b"THE STATE OF RETAIL DIAMONDSJEWELRYCOLORED DESIGN STONESdreams come true. Weve started so many new relationships.Interest in lab-grown diamonds extends beyond younger consumers, stresses Polamalu. Percentage-wise, I have just as many 80-year-old clients over at our lab-grown store as we do here at Zacharys, she says. Smith said as much during the webinar, noting that the product spans all generations and demographics. Gen Z consumers are opting for a lab-grown diamond so they can spend less on an engagement ring, and baby boomers are saying they want 4 carats and are willing to buy lab-grown diamonds so they can have money left over to spend on something else, she explained. ELIZABETH TAYLOR DREAMS Constance Polamalu said the customers at Bloomstone Jewelers While consumers are attracted to the prospect of getting more(pictured) have a different approach for their money, jewelers are starting to realize the importance ofto engagement ring shopping than the customers at Zacharys Jewelers.explaining the differences between lab-grown and natural diamonds in terms of value, Bonaparte said. When they do so, their sales of natural dia- Similarly, Holtzman says there is a sepa-monds increase, especially in the engagementITS SHOCKINGrate area for lab-grown diamond jewelry in market where there is more emotion involved inthe new, 21,000-square-foot CD Peacock the purchase, he added.FOR ME TO LOOKMansion the retailer opened in Oak Brook, Maintaining value in the engagement ring isAT TOTAL GROSSIllinois, in May 2024. The separation helps to vital to sustaining the perception that the dia- MARGIN FOR LAB- avoid confusion. mond reflects the promise inherent in a couplesGROWN LOOSEDuring the webinar, Bonaparte empha-relationship, Berg says. VERSUS TOTALsized the importance of maintaining that If the thousand dollar per carat goes todifferentiation. $200, will the guy whos buying that diamondGROSS MARGIN OFThe organization he heads, JA, has started for the woman still feel like thats forever, thatNATURAL DIAMONDproviding member jewelers with educational its meaningful enough to represent ones wishLOOSE. THATSmaterials to help them distinguish between for lifelong love? he asks.DIFFICULT TO WALKthe two products. Polamalu sees different approaches amongAs the understanding of their respective val-the bridal customers at Bloomstone, her lab- AWAY FROM. ues become clearer, Bonaparte said he expects grown diamond store, than she does at the more SHERRY SMITH, THEnatural diamonds to make a sustained come-traditional Zachary's Jewelers. EDGE RETAIL ACADEMYback, while lab-grown diamonds will continue Zacharys sees the classic bride and groom whoto decline in value and enter their own category. might come in together but at some point, theIts still uncertain how the market will woman steps out of the process to maintain the element of surprise.evolve, according to a November 2024 report by management consult-For those couples, there is an economic dance being done and an ex- ing firm McKinsey & Company, which laid out three possible scenarios pectation from the bride that her partner will spend a certain amount onfor the budding dynamic. the engagement ring because thats what shes worth, Polamalu explains.Lab-grown diamonds could take over most of the market outside For that bride, a lab-grown diamond would be considered too cheap.niche luxury segments. Bloomstone unveiled a different mindset and sales flow in itsOr, prices could drop so low that lab-grown diamonds will bridal business.effectively become fashion accessories that no longer compete with Its the women coming in and selecting exactly what they want,natural diamonds. and the men kind of arrive to pay the bill, she summarizes.In the third and most extreme scenario presented in the report, Thats likely because the lab-grown diamond space is largely femaleMcKinsey said consumers, driven by low prices and an inability to tell driven, and Bloomstones marketing is targeted to women.the difference between natural and lab-grown diamonds, could lose Women want a 5-carat diamond to live their Elizabeth Taylortheir desire for all diamonds and no longer see them as a must-have for dream, but most of us cant afford it, Polamalu says. So, when weengagement rings.want to be Elizabeth Taylor, its going to be lab grown because wePolamalu offers a different possibility. love big, beautiful diamonds. Rather than compete, lab-grown and natural diamonds can bolster each other because theyre intimately linked, she contends.LINKED AND DECOUPLED Im a big believer that a high tide raises all ships, and it would be The separation of the products with exclusive stores and brandingwise to respect both products, she says. for lab-grown and natural diamonds enables Polamalu to address theThey both chase the same diamond dream, so they have to be needs of different types of customers. linked but also decoupled. 58 STATE OF THE MAJORS 2025"