Majority of millennials shopping for engagement rings would consider lab diamonds

A recent study from consultancy MVI Marketing for the International Grown Diamond Association has found that 66% of millennials actively shopping for an engagement ring would consider a lab-grown diamond. Furthermore, 23% said they would definitely buy a lab-grown diamond ring.

Millennial tastes, attitudes, and habits pose a difficult market to crack for diamond sellers. The fact that Gen Y are marrying less and later than previous generations is one particular problem for the diamond market, which has traditionally been tied to engagement and wedding rings. Another challenge is that millennials tend to favor spending their money on experiences over products – if they do get married, for example, they might opt for a cheaper sapphire or gold band and spend the rest on a lavish honeymoon.

Yet another wrench in the gears of the industry is that millennials earn approximately 20% less than Baby Boomers did at the same stage of life. Combine that with rising tuition costs, student debt, and skyrocketing rent in many urban markets, and you get a generation with less scratch to spend on a sparkly rock. And of course there are millennials' concerns about social responsibility.

There are rafts of reports outlining how millennials (and Gen Z) care more than previous generations about what impact companies have on communities, society, and the environment. The diamond industry and the popular perception of "blood diamonds" means that African diamonds don’t have a great public image – despite industry efforts to present a transparent and ethical supply chain. Outside of African sociopolitical issues, critics can point to the environmental damage that occurs during the mining process in countries such as Canada.

While the millennial situation doesn’t mean they won’t buy diamonds at all, it does mean that demand will probably soften to some extent. At the end of January, De Beers reported sales of rough diamonds fell 25% in the first cycle of the year, pointing to weaker demand for smaller and cheaper stones. In 2018, De Beers’ rough diamond sales declined by 4%.

Lab-grown diamonds solve many of the concerns millennials have about mined diamonds. The technology required to make diamonds has existed since 1953, and has long been used to create enhanced cutting tools. As costs decreased and technology improved, creating lab diamonds for jewelry gained traction.

Aside from eliminating the troubling social and environmental impacts of mined diamonds, lab-grown diamonds are also easier on millennials’ slimmer pocketbooks, typically retailing for 30% less than an equivalently sized mined diamond.

The MVI study also found that price was the main purchase driver for consumers, with lab-grown diamonds offering a better value to shoppers while maintaining quality, clarity, and size that meets or exceeds mined diamonds. The report further outlined that consumer awareness of lab diamonds has rocketed in the past eight years. Fifty-one percent of consumer respondents said they were aware of lab-grown diamonds, compared to 9% in 2010.

MVI is an Austin, Texas-based provider of market research, strategy, and digital marketing services to luxury goods industry client, and has spent more than a decade studying the lab-grown diamond market.

“The growth in awareness and acceptance has been on a classic hockey stick curve, and it happened without any significant marketing,” Marty Hurwitz, MVI CEO, said. “Critical mass of consumer interest is now converging with increasing acceptance of lab-grown diamonds by retailers. This unique moment in time will propel growth for many years to come.”