For me, there is nothing more fun in this business than guessing trends correctly. And over the years, we have witnessed some amazing trend items that have produced important revenue streams, as well as market share expansion, provided that you saw them coming and reacted with the right advertising and inventory inputs. In the September issue of Southern/Mid-America Jewelry News my article (The Approaching Tsunami of Fashion Diamond Jewelry Demand) predicted massive demand for lab grown diamond stud earrings, and now with the benefit of seeing December’s sales figures, that prediction has turned out to be pretty accurate. Of course, by the time you read this, the Christmas rush will be well past, but you can use this information for predictive value as you prepare your store for Valentine’s Day.
Remember the 7-stone marquise bands and the S-link tennis bracelets from the early ‘90s? Or how about three-stone at the turn of the century? And then there was the Journey squiggle, and then Love Knots, two short-lived but nevertheless important trend items that marked the end of the era of the DeBeers’ “Beacons”. And perhaps you had fun with those ‘dancing diamond’ pieces featuring a patented mounting that allowed diamonds to ‘vibrate’ within a frame.
There are many lessons that can be learned from the ways in which these trends initiated, accelerated, reached a plateau, and then experienced decline. But for the purposes of this article, let’s consider what happens six weeks after the manifestation of a major trend at Christmas. What can we learn from prior history that will allow us to maximize future selling opportunities?
In my experience, there is a magical “Tipping Point” that can occur sometime around December 18th, where male gift givers seem to spontaneously settle on a key item, buying it en masse, such that on Christmas Day, a statistically significant number of women receive a gift that is the product of this serendipitous “herd” behavior. And in subsequent days, as the friends of these fortunate women learn about these gifts, an organic shared FOMO (Fear of Missing Out) psychology manifests, creating a second consumption wave at Valentine’s Day as this group of women ask the men in their lives for the trend item.
This is a really important insight, and if you use it properly, you can ramp up not only your February transaction counts, but also your market share, in a way that will have a powerful long-term impact on your future profitability. Diamond studs have dominated the Edge Retail Academy KPI reports for several years now, but in 2023, extremely large lab grown diamond studs found an exponential zone in the sales curve because of breakthroughs in consumers’ perceived value caused by a precipitous decline in prices. And special significance in this particular trend can be found in the fact that these very affordable, much larger stud sizes in many cases effectively obsoleted her current studs by rendering them comparatively microscopic.
It’s important to recognize that the best way to take advantage of this opportunity is NOT to maximize margins. Yes, you can make screaming hot margins selling a few pieces. But if instead you price them for volume, you can radically alter the playing field in your local market. Most importantly, for the vast number of women, lab grown studs represent a “Gateway Drug”, their very first experience with lab. And given both the size and incredible beauty of these diamonds, it’s reasonable to assert that when she wears them, she will also begin to experience a benevolent addiction that can only be satisfied by receiving new diamond bracelets, hoops, necklaces, rings and perhaps even larger studs than the ones she just received.
It’s also important to recognize that unlike mined diamonds, where small increments in price have historically failed to deliver noticeable changes in perceived value, the value curve in lab is pretty dramatic. For example, in mined studs, a shift from $599 to $999 might allow the purchaser to move from ½ to ¾ ctw, whereas the same shift in retail spend in lab studs will allow the consumer to move from 1 ctw to 2 ctw studs (the 2 ctw studs priced at key, if you’re buying them right). That’s a big deal, when you consider what else in your store is available for $999. But when you move outside the store, and consider the alternate luxury items that are competing for luxury spend, the current lab value curve is approaching a level of invincibility.
Let’s consider a purchase level of $2500. At the Louis Vuitton store, she can get a pretty nice handbag. And compared to 1 ctw diamond stud earrings, which might hit that retail in a nice quality, I’m thinking she’d rather go with the Louis. But if you’re buying them right, you can now offer her a pair of 4 ctw lab diamond studs for the same price. So, given a choice between a nice Louis Vuitton handbag, or a pair of 4 ctw studs, which do you think she’ll pick? My money’s on the studs.
Given these considerations, you must remember that it’s very hard to radically alter shopping patterns and market share, and doing so requires an enormous investment in advertising with a corresponding reduction in margins on featured items. But with the amazing disruption that’s taking place in the diamond business right now, I submit that the current scenario allows you to possess a once in a generation opportunity to disrupt your local market, in a way that potentially creates a lasting beneficial impact.
The Echo Bounce in Monster LGD studs is coming. And remember: every pair you sell becomes a walking, breathing billboard that tells her friends where they, too, can participate in this New Diamond Era. Don’t let this very special Valentine’s Day opportunity pass without taking maximum advantage of it. Your future self will thank you for the decisions you make today to surf this important consumption wave.