If you have read my articles over the years, you know that I have spent considerable time and energy thinking about mathematical models that can successfully predict the manifestation of fine jewelry trends. Given the extraordinary revenues that can correspond with correctly anticipating the largest trends – items like Three Stone, Journey, and those wonderful ‘Dancing Diamonds’- it really pays to understand why these trends occur, so you can deploy the inventory and advertising dollars necessary to dominate them in your local market. As I write this, I see the early signs of the Next Big Thing – specifically, I am speaking about Large Diamond Studs.
Studs have been around a long time, and if you examine the Edge Retail Academy KPI reports that aggregate sales data from over a thousand stores, you regularly see diamond studs occupying half of the sku’s on the top sellers’ reports, with ½ carat total weights consistently at the top of the list.
So why am I suddenly excited about studs? It’s because we’re seeing something we haven’t seen since the early nineties: a trend that’s not being driven by advertising, but rather by the sheer brute force of women seeing them on other women, combined with new technology that obsoletes the ones that are currently in her jewelry box.
Remember S-link tennis bracelets? From 1992 to 1995, S-link diamond bracelets created a surge in demand, and that demand was not driven by advertising. It was driven by the fact that the bracelets were sufficiently impressive that they were noticed by other women, who then informed the men in their lives, or alternately simply made a self-purchase. It is also interesting to note that the key price points for these fell dramatically over the three-year period. Initially, the retail price points were 1 ctw: $999, 2 ctw: $1999, and 3 ctw: $2999. Three years later, those price points had morphed to 1 ctw: $199, 2 ctw: $299, and 3 ctw: $499. K-Mart even famously jumped into the fray with an order for six hundred thousand 1 ctw bracelets targeting the ridiculous retail price of $99, consisting of unfaceted “diamonds” that actually looked like little balls of Styrofoam.
What I’m seeing in large lab grown diamond stud sales (2 – 6 ctw) reminds me very much of the early stages of the S-link bracelet craze. Yes, women already had bracelets made of gold and diamonds, but the S-link style produced a much bigger, bolder look, that was immediately apparent to any onlooker in close proximity. And yes, today, most women already have diamond studs, but not like these monsters that we’re starting to sell now.
In the past, it would have been extremely unusual to see a woman wearing 4 ctw studs, because the price was simply inaccessible to all but the extremely wealthy. But now, lab is changing the entire perceived value equation, and democratizing what once was unattainable. With 2 ctw studs now priced for less than $2,000, 4 ctw studs at $5,000, and 6 ctw studs at $9,000 (with 3s and 5s in the slots between), this is becoming a massive game changer. Think of how these items at these price points compare to other items in your inventory at similar price levels. Indeed, think of how these items compare to alternative luxury items – say, Louis Vuitton handbags, for example. It seems very reasonable to suggest that as consumers start wearing these larger studs, affluent women from households with decent discretionary spending capacity are going to zero in on big studs as their personal next “gotta-have-it” item, partly because they are so beautiful, and partly because the ones they currently own have now become obsolete due to their small size. And put yourself in her position. If you already own five Louis Vuitton handbags, but for just a little bit more than the current retail for one of those bags, you could have 4 ctw diamond studs, would you go for a fifth Louis? Or would 4 ctws be next on your shopping and wish list?
In keeping with this understanding of what’s happening in studs, recognize that we typically see what can be referred to as an “Echo Bounce” at Valentine’s Day when a new trend manifests at Christmas. So strategically, be sure to restock in January to have adequate inventory for these Valentine’s Day purchases. Train your staff so they know your entry level price points for each size, and increase the focus of your advertising on large lab grown diamond studs.
People often ask me if the lab grown diamond phenomenon, with its seemingly inexorable decline in prices, will ultimately harm the overall diamond business. I encourage you to see things differently. Declining lab prices will open entirely new vistas for fashion conscious women with upscale tastes. We have been terribly concerned about losing the value advantage that diamonds have historically had as a store of value, something that doesn’t mean anything to the vast majority of today’s consumers, while missing the incredible benefit we as an industry will obtain when the kinds of diamond jewelry designs that adorned starlets like Elizabeth Taylor a generation ago suddenly become an option for modern luxury appetites. These massive diamond studs are just the beginning of a coming revolution in the way that consumers will wear – and purchase – diamond jewelry.
One last thought: Remember how inline diamond tennis bracelets rocked in the late nineties through the early 2000s? And then they pretty much stopped selling. This occurred at almost precisely the same time that high end handbags took off. In retrospect, I have come to see a link between the surge in handbags and the decline in diamond tennis bracelets demand. But now, with lab, I think we’re going to be able to return the favor. Because suddenly we’re starting to see 5 – 10 ctw bracelets becoming accessible because of lab pricing. And these much larger bracelets are immediately noticeable to people in close proximity. So in much the same way we’re seeing exponential increases in demand for ultra-large studs, we’re starting to see the same thing in tennis bracelets. These two trends are setting up in a way that will be extremely beneficial to the jewelry business. Make sure you don’t miss them in 2023.
George Prout is President of the Independent Division of Craft Diamonds, and will be a featured Speaker at the Atlanta Jewelry Show Education Series in March.