It’s been a rollercoaster year for the natural diamond industry, with prices and demand decreasing, ongoing economic uncertainties, and inflated inventories of polished stones. PJ caught up with natural diamond experts who, despite a slump in sales, are feeling positive for the year ahead…
Sales of natural diamonds slowed last year, do you see this trend continuing throughout 2024?
Romy Gakh-Baram, director of global marketing at Sarine: I would identify the following factors that could continue to impede natural diamond sales.
China, the world’s second largest diamond market, has reduced the bank reserve rate in an attempt to release the money supply, and implemented various subsidy policies to stimulate the economy.
Global economic uncertainties, shifts in consumer preferences, and the ongoing impact of COVID-19 have all played a role.
Meanwhile, the rise of lab-grown diamonds as an affordable and ethical alternative has presented consumers with more choice.
Looking ahead to 2024, it’s reasonable to expect that these trends may continue to impact natural diamond sales. Economic recovery is uneven across regions, which could dampen consumer confidence and purchasing power.
However, the natural diamond industry is resilient and has weathered challenges in the past. Market dynamics can shift quickly, and factors such as changes in marketing strategies, innovative product offerings, and shifts in global demand could influence the trajectory of natural diamond sales. For sure, 2024 will bring an essential shift in authenticity and traceability.
Kashyap Mehta, CEO of Liquid Diamonds: In 2023, we observed a slowdown in sales of natural diamonds, following an unusually large increase in consumption in 2021. This surge was driven by lockdown measures, which reduced travel expenditure, and the distribution of stimulus checks by governments. But as people started traveling again in 2023 and stimulus checks were utilised, a natural downturn in diamond sales occurred.
The increasing adoption of lab-grown diamonds also played a role.
Looking ahead to 2024, we maintain a cautiously optimistic outlook for the natural diamond market.
On the supply side, we are observing an increase in inventory levels on the Indian manufacturing side following the expiration of the two-month moratorium on imports by manufacturers in Surat.
Suraj Poddar, director of Uniglo Diamonds: In 2024, I anticipate a positive trajectory for natural diamonds. Despite a dip in sales, the industry is showing signs of growth. International trade shows have demonstrated global demand. News reports suggest that consumer confidence remains high, further bolstering expectations for continued growth.
Michael Sterk, head of strategic growth projects at Nivoda: Acknowledging the challenging market conditions for natural diamonds in 2023, forecasting their trajectory demands a thorough examination of diverse factors. Economic fluctuations, shifts in consumer preferences, and the dynamics of supply and demand significantly influence the diamond market. Innovations in marketing strategies, educational campaigns for consumers, and emerging market opportunities could counteract any downward trends.
Continuous monitoring and strategic planning are essential for navigating the market’s evolving landscape.
As market conditions become complex, suppliers and buyers seek more efficient ways to conduct business and safeguard profits. Nivoda provides an ideal solution by connecting customers and suppliers worldwide, streamlining international and local transactions.
Natalie Bendayan, director of NB Diamonds: Recognising the conversions in market trends will enable retailers to navigate the current climate. Crucial to this is the acknowledgment of a desire for longevity in value for money and a decline in impulsive purchasing. Navigating this requires pinpointing effective strategies that will predict patterns and implement a targeted approach. These shifts call upon progressive action by retail management to ensure that consumers are being directed accordingly.
Diamond jewellery, although always a luxury purchase, is often superficially polarised into commercial affordable jewellery contrasting with high end premium acquisitions. Successful retailers are adopting a segmented, targeted customer service. At NB Diamonds we have witnessed our clients’ partition buying between low and high end items to accommodate this approach.
Margaux Donckier, public affairs director at HB Antwerp: HB’s distinctive business approach has sparked increased interest among retailers.
This is because we are uniquely positioned to assure the origin and traceability of diamonds on a larger scale, a capability apparently unmatched globally.
What are your thoughts on the new rules brought into effect by G7 countries, banning the import, purchase, or transfer of diamonds from Russia? How will these restrictions impact your business — will you need to amend your standard procedures to remain compliant with the new rules?
RGB: G7 sanctions are likely to have a substantial impact on everyone in the supply chain: miner, manufacturer, grader, retailer. Russia is a significant player in natural diamond sourcing, and the ban on importing diamonds will disrupt the global supply chain, possibly leading to shortages and increased prices.
That being said, the diamond industry must view these restrictions as an opportunity to provide a better luxury product to consumers.
Sarine is proud to be the only technology provider with the verifiable solution — Sarine’s Diamond Journey traceability. Last October, we announced our collaboration with Tracr. We are still in the development process, sharing the mutual goal to collaborate on a scalable, cost effective solution for tracking diamonds from their source to the point of entry into G7 countries.
Compliance with the new regulations will undoubtedly require amending standard procedures in the diamond supply chain. Overall, while these new rules pose challenges to diamond businesses, it is essential for the diamond and jewellery industry to adapt and respond effectively to remain compliant, relevant, and successful.
KM: Liquid Diamonds is committed to responsible business practices, including the ethical sourcing of goods.
We support efforts to enhance traceability in the diamond industry, which fosters consumer confidence in conflict-free sourcing.
However, we have concerns regarding the new G7 sanctions, which some argue could necessitate all diamonds to pass through Antwerp, potentially leading to increased costs and centralisation of power. We advocate for a decentralised approach to the diamond market to promote price transparency and liquidity.
Our vision is to democratise the diamond market, enabling buyers to access fair market value quickly and easily, while allowing suppliers to liquidate their inventory instantly.
We believe that implementing tracing through individual country certifications and blockchain records would facilitate a much smoother diamond flow from place of origin to market, promoting transparency and accountability.
Our standard operating procedures (SOPs) require suppliers and buyers on our platform to be verified via a thorough KYC and AML process, and ensure compliance to the Kimberly Process.
We supply to several certified members of the Responsible Jewellery Council (RJC) and therefore adhere to stringent rules in sustainability and ethics — including requiring suppliers to provide Country of Origin of stones where applicable.
While the new restrictions imposed by the G7 countries may introduce challenges, we are committed to upholding standards of ethical sourcing.
As we monitor developments closely, we will assess any necessary amendments to our SOPs to ensure continued compliance with the new rules. Our commitment to transparency and responsible business practices remains unwavering as we navigate these changes in the diamond industry landscape.
Nilesh Shah, owner of RM Shah: This was not unexpected and will not affect us much as most of our sales are in old cuts and rose cuts. We do not anticipate any changes, but we will put in procedures for compliance if it becomes necessary.
SP: This decisive action reaffirms the commitment to ethical sourcing and transparency within the diamond trade, aligning with our company’s values and practices. By adhering to these regulations, we can further enhance the integrity of our products and strengthen trust with our customers. It opens up avenues for diversification and exploration of alternative sourcing regions, fostering innovation and resilience within the industry. We see this as a positive step towards a more sustainable and responsible diamond market.
MS: The new regulations represent a significant shift in the global diamond trade landscape. Assessing the potential impact on our business, we anticipate several ramifications. There may be disruptions to the global supply chain, given the current substantial presence of diamonds sourced from Russia in the market worldwide.
However, as the largest industry platform, we are confident in our ability to navigate these challenges.
Our customers will continue to be able to find the products they need on our online marketplace, accessing a wide array of offerings available globally. Goods purchased through Nivoda will adhere to all compliance rules and legislation, including the new regulations established by the G7 once they are outlined and implemented. Maintaining transparency and compliance remains a top priority for us, ensuring that our customers can trust the integrity of their purchases.
With increased scrutiny on diamond provenance, we anticipate heightened due diligence requirements and compliance obligations for industry participants, potentially leading to longer delivery times and increased fulfilment costs. In response, we are dedicated to ensuring full compliance with the new regulations.
This may entail adjustments to our standard procedures, including enhancing transparency in supply chain management, implementing robust verification mechanisms, and bolstering adherence to ethical sourcing practices.
MD: HB has always championed the ethical sourcing of diamonds, aligning with our belief that minerals are a natural resource belonging to their country of origin.
Our unique Mineral Infrastructure, which emphasises a diamond’s provenance, positions us favourably considering these sanctions.
We have been advocating for such measures against Russian diamonds, aligning our business practices with these ethical standards. Our closed-loop ecosystem, which tracks each diamond from extraction in Botswana through its transformation, ensures full compliance with these new regulations.
More consumers are now shopping for diamonds online. What technologies do retailers need to have in place to meet their customers online and make those all-important conversions?
RGB: The diamond industry is facing the pressing need to leverage technology in delivering operational solutions that reduce cycle times, minimise inventories, streamline supply chains, and support e-commerce. This is crucial for maintaining competitiveness and adaptability in an evolving market landscape.
Traceability is not only essential for responsible sourcing and ethical practices but also for differentiating between natural diamonds and their unique story in comparison with lab-grown diamonds.
We are moving towards a world where technological intelligence intersects with trust. In the realm of online shopping, customers seek comprehensive information to make confident purchases, which is a particularly crucial factor for luxury items. To address this, retailers are integrating advanced technologies into their core operations to enhance the consumer shopping experience.
Increasingly, luxury brands across all segments are discussing product journeys, authenticity, sustainable values, digital twins, and the NFT economy. Sarine technology solutions include an AI-based verifiable traceability diamond report, augmented with advanced 3D imaging for each stone. These features offer interactive 360-degree views of each diamond, enabling customers to scrutinise the diamond from every angle.
KM: As online diamond purchases continue to rise, retailers must adapt to meet evolving customer needs, which typically involve price comparisons and education on diamond options.
To address these needs, retailers are focussing on price transparency as a means to educate consumers and instil confidence in their purchases. This can be achieved through the use of innovative technologies like Liquid Diamonds’ proprietary AI-driven pricing technology, which gives accurate diamond pricing.
While online purchases are prevalent for lower-priced items, larger transactions still often occur in-store. Therefore, implementing the “Click-and-mortar” approach, where online processes drive foot traffic to physical stores, can enhance cross-selling and upselling opportunities — ultimately improving overall customer experience and conversion rates.
NS: Everyone selling directly to the public needs to be aware of the latest trends and the technologies available to better convert enquiries into sales.
MS: As the trend for buying diamonds online continues to rise, it is imperative for retailers to embrace technology to grow their digital presence and enhance customer experience. The implementation of user-friendly websites and mobile apps featuring intuitive navigation and secure payment gateways can have a significant positive impact for the end consumer.
The integration of virtual try-on technologies and augmented reality features can offer customers a more immersive and personalised shopping journey. By incorporating AI-powered chatbots or virtual assistants, retailers can also provide real-time customer support and guidance, thereby building trust and increasing conversions in the fiercely competitive online diamond market.
At Nivoda, we understand the importance of supporting retailers in this transition. In an era where diamond sales are increasingly competitive, our suite of retail tools equips jewellers to sell more efficiently both in-store and online. For instance, our Customer Facing Mode eliminates the need for retailers to turn away in-store customers due to limited inventory. This virtual diamond presentation tool empowers bricks-and-mortar jewellers to instantly showcase and sell any stone from our global inventory on-site. By connecting to our API, retailers can also seamlessly integrate their web store with thousands of diamond suppliers, customising mark-up and filtering options to meet their customers’ specific preferences. With Nivoda’s comprehensive solutions, retailers can adapt to the evolving landscape of diamond retailing and thrive in the digital marketplace.
MD: In the digital era, consumers seek verifiable information about their purchases, especially concerning ethical sourcing and sustainability. Retailers must adapt by implementing systems that provide detailed information about a diamond’s origin and lifecycle.
This transparency is not just a compliance measure but a competitive advantage in attracting online shoppers.
NB: Having a better understanding of clients’ purchasing behaviour, facilitated by technological advancements, enables hyper-personalisation and a tailored approach to sales. On a basic level, incorporating these marketing strategies can create a memorable client experience with every encounter. Crucial to generating a commitment to retailers is building trust through clear information — in turn enhancing perceived value.
Alongside this, consumers are drawn to added incentives within purchasing habits, such as premium packaging and loyalty discounts on additional purchases.
Ensuring that retailers have low cost items available to propose as additional sales not only increases conversions alongside primary purchases but increases the appeal of more prominent items.
How do you utilise storytelling to promote and champion natural diamonds in your business?
RGB: ‘Immersive customer journeys’ is a headline in luxury, especially with diamonds. At Sarine, we embrace the narratives woven into natural diamonds.
We consider it our mission to share their compelling stories through both our technology and our digital platforms.
A diamond’s origin, the crafting process, and the stone’s impact on communities around the world form its story.
SP: Storytelling is a powerful tool to showcase the beauty and value of diamonds in our business. Through our Instagram and other platforms, we craft compelling narratives that highlight the journey of each diamond, from its origins to its exquisite craftsmanship.
By sharing stories of the attention to detail in our cutting process, the clarity and carat weight of our diamonds, and our commitment to fair and adjustable pricing, we not only educate our audience, but also evoke emotion and desire.
Our aim is to create a connection with our customers, ensuring that they not only understand the quality of our products but also feel confident in their purchase.
MS: Storytelling is a powerful way to establish emotional connections with consumers, highlighting the distinctive journey and qualities of natural diamonds.
Crafting narratives that intertwine with themes of romance and eternal commitment resonates deeply with our target audience. Whether highlighting the craftsmanship behind each diamond or sharing anecdotes of love, the industry aims to cultivate a profound appreciation for the beauty of natural diamonds.
Our mission is to empower our customers to grow their businesses and enhance their profitability. To do so, we work hard to ensure that our platform has the right stone available for our customers — including, of course, natural diamonds. We focus on providing the best experience for each customer, regardless of the stone they are looking for.
MD: We believe in the power of storytelling to highlight the value of natural diamonds. By focussing on their traceability, we emphasise how purchasing natural diamonds supports developing economies, particularly in the African sub-Sahara. This narrative helps consumers understand the positive impact of their purchases, making the choice for natural diamonds more compelling.
NB: Utilising the approach of personalisation is the surge in popularity of bespoke second hand services.
Remaking of jewellery items, featuring customers’ own ‘old’ diamonds and gems, enhanced with new stones and metals, incorporates storytelling whilst enlisting an intimate client service, securing client loyalty. A key segment of NB Diamonds’ services is our in-house workshop offering premium craftsmanship, including CAD, setting, creating handmade pieces, and providing desirable items of jewellery.
What cuts and colours do you see performing well in 2024?
RGB: Traditional cuts will share the spotlight with innovative and unconventional diamond shapes in 2024.
Designers are pushing the boundaries with unique cuts, creating pieces that are both classic and contemporary.
From hexagons to elongated ovals, expect to see a diverse array of diamond shapes capturing hearts and turning heads.
KM: We are witnessing a clear shift towards the preference for higher clarity diamonds. Traditionally, SI clarity (and below) diamonds have dominated consumption, but our data suggests a decline in demand for lower clarity diamonds compared to the resilience shown by VS+ clarity diamonds during this downturn. Since 2023, for the first time, we have observed VS+ clarity diamonds outperforming lower clarity diamonds.
This shift could be attributed to the faster transition of consumers of lower clarity diamonds towards lab-grown diamonds, contrasting with slower adoption among higher-end jewellery consumers. It remains to be seen whether this trend will continue or stabilise, particularly considering the significant decrease in lab-grown diamond prices.
NS: For some years, ovals and rounds have dominated the engagement ring market. In 2024, the emerald cut is due for an upturn, as well as rounds with larger tables giving a bigger look. We feel interest in more yellowish diamonds, such as K to N colour, will continue from last year.
SP: We anticipate that diamonds in the colour range from D to H will continue to perform exceptionally well, reflecting the enduring appeal of near-colourless to slightly-tinted stones.
In terms of clarity, diamonds in the VS2, SI2, and even some I2 categories are expected to maintain strong demand.
While these stones may have slight inclusions visible under magnification, they offer excellent value without compromising on brilliance or beauty.
This combination of colour and clarity ensures that our customers can find the diamond to suit their preferences and budget, further enhancing satisfaction.
MS: Classic round brilliant cuts are expected to maintain their popularity, owing to their timeless appeal and versatile charm. Fancy shapes, such as oval and pear cuts, are steadily gaining momentum, appreciated for their distinct elegance and singular aesthetic.
Recent trends also suggest a heightened interest in cushion, oval, and radiant cuts, driven by a demand for elongated shapes.
In terms of colours, fancy coloured diamonds, particularly shades of pink and blue, continue to enchant consumers seeking individuality and sophistication.
Nevertheless, the enduring allure of traditional white diamonds remains paramount, with impeccably cut stones commanding significant attention in the market. Diamonds with pronounced secondary hues and overtones face challenges in the market, with colours like yellow and brown experiencing decreased demand in comparison.
In the UK market, there is a growing consumer awareness regarding the origin of their diamonds. While retailers have not yet begun to inquire about this, we anticipate a rise in such questions, driven by the growing demand from consumers.
MD: The preference for specific cuts and colours largely varies based on the target market, as these choices are more influenced by cultural differences than by trends. Typically, Asian markets show a tendency towards smaller diamonds with a higher quality and purity.
“Diamonds are the ultimate symbol of love.
“With the rise in popularity of lab-grown diamonds, consumers are drawn to their price. However, price is an indicator of a product’s quality in the luxury world. As the price difference between the two increases, the perceived value difference will also increase, especially if we apply that brand thinking to our natural diamond offerings.
“‘Virtual stocking’ has also become very prevalent in the world of diamond sales, offering a choice to consumers with a number of portals being available that easily integrate into retail websites. While choice is a good thing, too many options can be overwhelming, leading to confusion and potentially pushing them towards price-driven decisions rather than appreciating the unique qualities of each diamond.
“Retailers, especially, need to use online resources carefully.
“When it comes to marketing natural diamonds above the competition, brand thinking can be a powerful catalyst to continue the industry’s success.”
David Hartley, senior sales manager at Nelson Jewellery Arts, shares his personal view of the natural diamond industry
