Lab-grown diamonds have become a popular choice among millennial consumers, however, many traditional diamond producers and jewelry retailers still keep lab-grown diamonds in their back rooms. At Spence Diamonds, a 40-year-old diamond retailer, man-made stones are put front and center as the focus of its business, while also still selling earth-mined diamonds. Spence Diamonds reports that a whopping 80 percent of its customers choose lab-grown over earth-mined stones, reflecting a growing shift in consumer mind-set around diamonds.
In this interview with Total Retail, Veeral Rathod, CEO of Spence Diamonds, discusses how the company educates consumers on the value of man-made stones, why eco-conscious shoppers are choosing lab-created or ethically sourced stones, and why he believes lab-grown diamonds are the future of the jewelry industry.
Total Retail: Tell us about Spence Diamonds and its growth over the years?
Veeral Rathod: Spence Diamonds was founded in Vancouver, British Columbia, in 1978. For more than 40 years, it has offered its customers the education, choice and confidence to create the exact piece of jewelry that defines their moment and reflects their budget. Spence Diamonds has eight locations in Canada and expanded to the United States in 2016, and now has five locations across San Jose, CA; Scottsdale, AZ; and Austin, Dallas, and Plano, TX.
TR: Has Spence Diamonds always offered both lab-grown and earth-mined diamonds? If not, when did you start offering both, and why was that decision made?
VR: Spence Diamonds began offering lab-grown diamonds in 2016, a full two years ahead of the Federal Trade Commission (FTC) ruling that put lab-grown and earth-mined diamonds on equal legal footing. That puts us on the forefront of the trend. In fact, we were the first traditional brick-and-mortar jeweler to offer both side-by-side. We believed then as we do now that the diamond business was ready for disruption, and lab-grown diamonds offered the quality, value and sustainability that more and more of our customers are looking for.
TR: Why do you believe consumers are increasingly choosing to purchase lab-grown diamonds over earth-mined diamonds?
VR: Consumers always seek value. Lab-grown diamonds are indistinguishable from a mined diamond. They're optically, chemically and physically the same, and are always at least 33 percent larger and of higher quality by two clarity grades than similarly priced mined diamonds. That’s a big deal to a lot of people, and I think the 2018 FTC ruling that lab-grown is identical to earth-mined changed the game because they’re no longer considered “fake diamonds.” They're the same — just a better value for most people and a more ethically sourced product for those who are concerned with the environmental and human rights issues sometimes associated with the earth-mined diamond business. We've found that 80 percent of customers choose lab-grown diamonds when educated on the impacts of earth-mined diamonds.
TR: What are the challenges for Spence Diamonds in creating consumer awareness of lab-grown diamonds, as well as educating customers about the value of a lab-grown diamond vs. an earth-mined diamond?
VR: To spread awareness of lab-grown diamonds, education must be the first priority. Many consumers are unaware of lab-grown diamonds or believe them to be cubic zirconia or some other imitation stone. Spence educates customers on the "five Cs" of buying a diamond, instead of the traditional four Cs: cut, color, clarity, carat as well as composition. Lab-grown diamonds meet the standards of earth-mined diamonds without the environmental cost. There’s also a push by some traditional diamond companies to paint lab-grown as somehow lessor, even though they're nearly impossible to tell apart. So that's a hurdle as well.
TR: How do lab-grown diamonds help further Spence Diamonds’ sustainability mission?
VR: More and more eco-conscious millennials are seeking ethically sourced diamonds and are choosing lab-created diamonds when educated on the environmental, animal and human impact of earth-mined diamonds. The advances in science have made it possible to create high-quality, real diamonds that people can wear proudly. Though we also offer ethically sourced, conflict-free earth-mined diamonds, we want to educate everyone about this alternative because we believe lab-grown diamonds are the future of the industry.
TR: How does Spence Diamonds market its lab-grown diamonds to consumers?
VR: Spence educates the customer to make an informed decision between lab-grown and earth-mined diamonds. Once the customer decides on the style, setting and budget, Spence shows both types of stones side-by-side to see each through the scope and provides the customer with the tools to make that informed decision.
TR: What are the focal points for Spence Diamonds going forward as it looks to continue to grow the business, and how does lab-grown diamonds factor into that conversation?
VR: We believe lab-grown diamonds will increasingly be considered, so we see a significant growth opportunity in building awareness and offering these to our customers. We're now offering several core jewelry items, such as stud earrings, in a highly customizable and clearly priced lab-grown diamond offering. Also, several lab diamond growers have developed capabilities in colored diamonds — pink, blue, and yellow — and these offer incredible value to someone looking for a colored diamond.
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