George Prout examines the impact of lab grown diamonds
The extent to which change produces anxiety, from a neurophysiological standpoint, is well documented. Viewed biochemically, the human body’s reaction to anxiety triggers a “threat response” that can create a sense of hostility towards the source of the change, which in turn can lead to feelings of anger. It should therefore come as no surprise that many in our industry appear either to be in a state of denial over the changes that lab-grown diamonds will bring, or are so manifestly hostile to it that they seem unable to rationally consider the likely impact of this new product’s incipient arrival. In particular, many are voicing the opinion that this genie can somehow be put back in the bottle, or otherwise that attitudes and actions on the supply side can somehow prevent, or at least modify, the inevitable impact of lab-grown in the marketplace.
Ours is not the first industry to be severely impacted by technological change. But in my view, the potential impact of lab-grown diamonds will be so pervasive that any serious strategic business plan, whether at the diamantaire, jewelry manufacturing, or retail level, will succeed or fail based on the accuracy of assumptions of what’s likely to occur as the lab-grown tsunami makes landfall. With this in mind, let’s consider this extraordinary new consumption wave’s likely trajectory.
First, let’s recognize that both supplier and retailer reactions to technological change are fairly unimportant. What counts are consumer responses and reactions. And especially in cases where the change in a consumer product may run contrary to ingrained consumer attitudes, it sometimes helps when the new product gets a little push from marketing.
Consider, for example, Gablinger’s Diet Beer, which was launched in 1967 as a result of changes in brewing technology. After several failures by different entities trying to obtain a market foothold with this new product, it became clear that it would be extremely difficult for brewers to talk red-blooded American males into drinking diet beer, regardless of the health advantages. But when the story was tweaked a bit, so that consumers were being pitched a product with the brilliant slogan “Tastes Great- Less Filling” by professional football players, suddenly the idea of drinking diet beer resonated with a powerful impact, to the extent that today, the number one selling beer in America is Miller Lite.
I mention this because many who doubt the potential for acceptance of a created diamond do so on the basis of a similar perceived inherent negative reaction to the whole idea of a non-natuarlly occurring diamond, and I suspect that when the story of lab grown is similarly altered to promote the product’s eco-friendly, socially responsible intrinsic characteristics, we will similarly see fairly significant acceptance, particularly in the Millennial demographic.
But it is also my view that in evaluating prospective consumer response to lab grown diamonds, we are likely to witness a strong degree of acceptance, with or without marketing help, due to incredible recent fundamental changes that have taken place in us as a species. Our ancestors 200,000 years ago were anatomically indistinguishable from our grandparents, such that throughout this epoch, they and the roughly ten thousand generations preceding them could properly be categorized as Homo Sapiens (the Thinking Man). But during the past fifty years (an incredibly brief period by evolutionary standards), something extraordinary has occurred that is actually causing changes to us at the anatomical and neurophysiological levels, to the extent that many anthropologists believe that we are now actually morphing into a new Species: Homo Technologicus (the Technological Man).
And with these biological changes, accompanying adjustments in our collective attitudes towards all things technological are also occurring at a blinding pace. Take, for example, the issue of in vitro fertilization. I can recall as a youngster reading a serious discussion in an issue of Time magazine between theological scholars debating the question of whether a test tube baby would possess a soul! Can you imagine such a discussion taking place today? So, if we can so readily accept the idea of lab grown humans, is it really that big a stretch to assert that we will similarly accept lab grown diamonds?
The key takeaway is that just as we have been creating - and changing - technology, it has been changing - and creating - us! You can see many of these changes manifesting themselves in the shared characteristics of the generation we refer to as Millennials. And while anthropologists agree that Millennials are completely unlike any preceding generation, Generation Z (which comes next) as a group possesses shared predispositions that are even further removed from our conventional sense of normality, very much in keeping with the notion that our species has truly become “One” with technology. All of this suggests to me that our most important consumer audience - the pre-bridal consumer - is absolutely hard-wired to accept the technological innovation that is lab grown.
When I speak with industry people about lab grown, I’m struck by the fact that, in general, their occupation prevents them from seeing this new item through the eyes of the consumer. And as I attempt to see lab grown myself through consumer eyes, I see an opportunity to purchase something beautiful at a much more affordable price. I see an opportunity for a young bride to wear a one carat diamond, at the cost of a ¾ carat. I see an opportunity for Millennial females, who we know will drive further and pay more for an ecologically responsibly-sourced product, to buy their diamond in an eco-friendly way. I see an opportunity for consumers of all age ranges to buy a technologically cool product. Best of all, I see beautiful diamonds annihilating the off color I2 diamonds that have become so prevalent in modern jewelry merchandising.
And very, very importantly, I see a consumer who thinks that rarity is vastly over-rated, so while I am aware that the miners are about to launch an appeal to consumers along these lines, I’m inclined to think the impact of the “Real is Rare” campaign will be modest, at best.
Will lab grown hurt our industry? It may well, but the extent to which it will do so is completely beyond the capacity of any of us to prevent it. Only time will tell, but it seems completely reasonable to assert that existing leaders who miscalculate the impact, and therefore fail to react properly - as well as quickly - will pay an extremely heavy economic price. Similarly, new players stand to benefit dramatically any time radical change occurs. The list of retailers selling lab grown is growing exponentially, and some serious industry heavyweights, like Robbins Brothers and Borsheims, have already become involved. On the supplier side, lab grown is now well entrenched, and with companies like Stuller and Quality Gold entering the marketplace, access is becoming universal.
Lab grown is going to be a really big deal. Like it or not, you are now being confronted with an enormously powerful catalyst for change, something that will be almost certain to fundamentally alter the market for the most important product that we sell. One thing is certain: there is a significant opportunity here for early adopters. Market shares will change radically as a result, and in turn, fortunes will be made, and lost. The wave is coming, and it’s going to be big, and powerful. This would be a very good time for you to reach out and connect with someone who knows how to build a surfboard.