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https://labgrownmagazine.com/Issues/September2020/
Six Months Later
How things have changed over the last half year!
Six months ago, many companies were looking
forward to their participation in a variety
of trade shows‒in Hong Kong and Las Vegas
among others‒only to have their plans turned
upside down by the coronavirus pandemic.
After canceling the JCK Las Vegas show in
June, its organizers got busy trying to find an
online alternative. The result was JCK Virtual
2020 that took place from August 10 to 14.
This new type of fair featured about 700 exhibitors,
including 37 lab-grown diamond companies,
which took part in the LGD category.
For more on this virtual event and how it was
viewed by a number of exhibitors, including
some lab-grown suppliers, see the article in this
issue entitled JCK Goes Virtual.
The global Informa jewelry and gem show
normally held in Hong Kong in September is
scheduled to go virtual in November. It will feature
an online platform that is different from
that of JCK, so it will be interesting to see how
the two compare.
Both the JCK online show and the upcoming
Informa show highlight the importance of
the digital world in the jewelry industry. Aside
from the shows, having an online presence for
marketing and communication as well as networking
and even online sales has now become
the new normal.
In recent news in the lab-grown sector, GIA
has announced that, starting in the fourth quarter,
it will begin grading lab-grown diamonds
using the same specific color and clarity grades
that it applies to natural diamonds. This will
replace the currently-used descriptive terms and
grade ranges for LGDs.
The feature article in this issue offers Part
One of a three-part series entitled The Great
Diamond Debate. It examines the relationship,
or lack thereof, between the lab-grown and
natural diamond sectors and how the two can
work together for their mutual benefit rather
than continue the current tug-of-war. It also
offers two cautionary tales about other products
that faced a similar situation. It’s a must read for
everyone on both sides of the debate.
Until next time, please stay safe.
Zev
The Great Diamond Debate
Opposites or Equals? The “Diamonds vs
Diamonds” debate begins here.
Part One of a Three-Part Series
By Dan Scott
Just the Facts, Please
The words “truth” and “fact” are synonyms.
In the scope of a debate, both words are also
definitive. Logic, facts and emotional appeal
are the elements of any discussion. And when
a debate is between two parties with opposite
points of view, the side speaking from hard
facts is often the most convincing and winning
side.
Yet, this story isn’t about one side winning
or losing. You are reading an attempt to communicate
the necessity that both sides win or,
unless unity prevails, the realization that both
sides may lose. Here, the opposing sides are,
of course, lab-grown diamonds and mined
diamonds.
Sparked by a Forbes article published in
July 2020, the original headline (now edited)
featured the word “truce” pertaining to mined
diamonds versus LGDs. Written by the internationally
acclaimed luxury marketing expert
and bestselling author, Pamela Danziger,
the opening paragraph reads: “In a global
market transformed by Covid-19, the labgrown
and mined-diamond industries have
called a truce as they now face a common
enemy: declining consumer demand.”
This Forbes story received double digit views,
surpassing most of Danziger’s popular pieces
by the same publisher. Online diamondfocused
blogs were quick to pick up her story
and I was quick to pick up the phone.
Confrontational to Conversional
Knowing that Danziger was an LGD proponent
and an authority on all things luxury
and retail, it was important to dig deeper into
her truce take while learning about her LDG
insights.
Her truce posturing tip of the sword points
to the Diamond Producers Association’s
(DPA) multi-million-dollar investment in
and then cancelation of the “Real is Rare”
campaign that seemingly implies that LGDs
are not “real.”
Recently, the DPA changed its name to the
Natural Diamond Council (NDC), leveraging
the only word that legally and forever
separates mined from man-made: Natural.
Danziger and other leaders agree that this
move appears to be an olive branch of sorts.
“The ‘mining guys’ seem to be less confrontational
in terms of their marketing…It’s a
big category where we all could be nicer to
each other,” said Marty Hurwitz, co-founder
of MVI Marketing, a jewelry industry research
frontrunner.
Speaking to Forbes, Richard Garard, Secretary
General of the International Grown
Diamond Association (IGDA) noted that
the natural diamond sector’s attitude appears
to be swaying from confrontational
to conversional. “While in the past, we have
seen the disparaging and discrediting of labgrown
diamonds, that tactic really didn’t work
for anyone,” Garard stated. “From the mined
industry not acknowledging lab-grown diamonds
as ‘diamond,’ to the FTC revisions
that made amply clear that there was no
scientific difference between the two diamonds
except their origins, lab-grown diamonds
have finally arrived.”
Danziger concludes, “Now that the mining
interests have found a clear and precise
message that differentiates its choice from
laboratory-produced diamonds and doesn’t
undercut or denigrate the emerging category,
the entire jewelry industry will benefit from
this new spirit of détente.” We’ll be revisiting
more of Danziger’s interview in Part Two of
this series scheduled for release in October
of this year. To read her full February feature,
visit: www.tinyurl.com/ForbesEditorsPick.
Truce or Turmoil?
From the surface view, one might conclude
that the natural diamond groups’ newfound
marketing position calms decades of efforts
protecting their mined assets.
A truce, like truth, is conclusive. But many
LGD producers don’t believe a truce is evident.
There have been no formal conversations
or joint press announcements concluding
any form of “truce.” Speaking with many
LGD producers, diamond jewelry designers
and retailers, no one has agreed that there
was any change in sight. Some think it will
occur, but it will be a slow drip style acceptance
when it’s time to open the flood gates.
One jewelry retailer, who wished to remain
anonymous, recently invested in stocking
LGDs along with his significant natural
diamond inventory. “If there’s really a positive
attitude shift than where’s the behavioral
shift?” he asks. “The mining groups hold the
money and the leadership. De Beers is benefiting
from both sides, but what about all the
little guys? Where’s the funding for training?
Where’s the co-op? I’d love to see a peace
treaty… There isn’t one.”
A newly launched LGD grower stated,
“I can’t even pay to join a natural diamond
group since my business is all lab.” That
sounds more like turmoil than a truce.
If those married to mining are truly prepared
to work with lab growers and retailers
as a family, the industry needs a mutually
agreeable plan of action and budget. This can
and must occur or the dove of peace will be
devoured by the vulture.
Cautionary Tales
This next section illustrates that battles
among two industry groups greatly damages
both sides. Let’s take the examples of two
national metal jewelry market introductions
of which I have firsthand experience. First,
I managed the global re-emergence of palladium
as the Chief Marketing Officer at
the Scott Kay brand during its final decade
of success. Originally launched by Tiffany in
1939, palladium’s foray into the jewelry market
was short-lived at that time.
Fast forward to the last decade, Scott Kay
was seen as the perfect poster boy for a relaunch
of the white metal. He was a pioneer
in platinum and a driver for its awareness in
the U.S. designer bridal jewelry market. Who
better, then, to continue to sing platinum’s
praise while supporting a sister family metal?
The plan was simple: platinum would be for
engagement rings, bridal and anniversary►
Note: We reached out to the NDC and the Lab
Grown Diamond Council for their input, but
neither responded by deadline. Perhaps, we will
hear from them before Part Two goes to press.
bands, while the naturally white precious palladium
would be reintroduced in fine fashion.
Since it is less heavy, palladium is ideal for
earrings and other jewels.
We flew the nation’s top jewelry editors
for a three-day exploration and mining tour
hosted by Stillwater Mining in Montana,
and then hosted a standing-room-only event
at JCK, where Scott Kay led the charge.
Thousands of palladium fashion styles began
hitting the market and Scott Kay was
honored by a masthead placement in the Wall
Street Journal. Investors flocked to purchase
the white metal as its future in the jewelry
industry seemed bright. We were the right
hand of the Palladium Alliance, the metal’s
trade body.
That hand tried to shake hands with Platinum
Group International (PGI) to form
a unified team to market both metals. The
handshake, however, turned into a handoff.
Although global platinum mining groups
would have greatly gained from mining palladium
(it comes from the same source as
platinum), the two sister metals fought, just
as they had in 1939.
The result is obvious today. Palladium is
now mostly forgotten and white gold has
again won the white precious metal war in
fine fashion jewelry.
Platinum bridal sales eroded and platinum’s
value and premiere status on the commodity
exchange (COMEX) bowed to gold, then
and now.
A second example of industry turmoil involved
the drawn-out public battle between
Fredrick Goldman’s tungsten empire and the
launch of Scott Kay Cobalt. Starting in January
2011, this fight was dramatic, expensive
and a main reason I resigned from the firm
after ten years as its CMO.
The patent on tungsten carbide, the leader
in contemporary men’s wedding bands at
that time, was held by Frederick Goldman.
Scott Kay Inc (SKI) worked with Spector
Corporation and Carpenter Technologies (a
specialty metal refiner) to introduce cobalt
into jewelry. Millions of SK cobalt wedding
bands hit the market under five different
brand names. Helzberg Diamonds devoted
four feet of space exclusively to SK Cobalt.
Scott Kay designer cobalt bands landed in
over 4,000 doors in four months including
every Jared and Kays as well as leading independent
doors. Scott Kay took the spotlight
on CNNMoney, while Fredrick Goldman
took to lawsuits.
After non-stop legal threats against SKI,
Goldman unleashed a six-month FTC investigation
against SKI and me personally. In
the end, we overcame all legal swipes since
we stuck to the facts. This included authoring
“Full Disclosure: Contemporary Metals,”
a report mailed to over 100,000 retail buyers
that was later published by the Journal of
Brand Strategy.
Finally, on 4 October 2011, SKI overcame
the FTC judgement and we were free to proceed
exactly as we had been. Scott thought
that he won the war. He didn’t. The industry
didn’t. Goldman didn’t. Cobalt went out as
fast as it came in. Tungsten sales dropped like
a lead balloon. Titanium took the contemporary
metal crown.
Lesson learned… Dueling metals did not
work to anyone’s benefit, and neither do
dueling diamonds. Full disclosure, however, is
a fact-filled friend.
Diamond Destiny
In the world of fine jewelry, watches and
fashion, change, controversy and opinion
are settled by end users, noted Andy Jassin
of New York City’s Jassin Consultants, a
high-profile, executive advisory group catering
to the jewelry, fashion, watches and home
furnishing sectors. “As licensing and branding
consultants, our clients and our firm are
fixated upon the strategic advancement of
our marketplace’s future,” said Jassin. When
asked about his take on the current tug-ofwar
between natural and LGDs, Jassin added,
“Consumers have embraced non-conflict, renewable
and the green movement, but mined
versus lab-grown diamonds was destined to
occur. While technology and consumer education
evolve, the diamond industry should
be diligent in keeping the two like stones
separated, yet fully disclosed. Regardless of
the intrinsic, market value (or lack thereof)
for any consumer commodity, if marketed
properly, it will sell with neighboring competition.
Remember, luxury timepieces are
sold with rubber straps, and stainless steel is
adjacent to 18K gold and platinum. We must
merchandise our diamond retail future so
mined and man-made diamonds are stocked
and sold by the same store.”
Retail Re-tools
Rox Gordon, co-owner of Gordon Jewelers
agrees with Jassin. “We have mined diamonds
alongside lab-grown, and we disclose
it up front.”
Devon Bond, co-owner of Garrick Jewelers,
is selling up to four LGDs each month
and recently debuted an exclusive LGD
bridal and fashion collection. “Most customers
come in wanting mined diamonds, yet we
offer LGDs as an alternative and allow our
customer to decide. Sometimes, the customer
has a budget that will not allow them to purchase
a mined diamond of the size and quality
they want, and they will gladly explore
LG,” Bond stated.
The De Beers Group Diamond Insight Flash
Report #2, published 6 July 2020, states,
“Women are increasingly also thinking about
diamond jewelry as a versatile accessory, with
an increase in describing it as a luxury item
with ‘everyday wearability’ from 9% in Wave
1 to 22% in Wave 2 [‘waves’ reflect time
periods]. With higher income and married
respondents, positivity towards diamond
jewelry increases further.”
While offering timely evidence from the
world’s finest forecast sources, Danziger
writes, “Jewelry market hits the skids.” Her
words suggest that market predictions and
revenue actualities—especially due to
Covid-19—indicate that diamond sales of all
types are looking “quite grim.” But this industry
is extremely resilient and smart.
Close Covid; We’re open.
January’s jewelry retail numbers were
strong. The first month of any new year is
typically the lowest retail revenue period,
yet according to Liam O’Connell of Statista,
January 2020 jewelry sales reached $1.981M,
up from $1.836M the same month last year.
The U.S. Census Department monthly
retail reporting numbers through May were
so low and unreliable that it temporarily suppressed
reporting in the jewelry category
after a deep drop at January’s close. But the
summer has turned up the sales heat.
Based on June 2020 data by The Edge Retail
Academy, National Jeweler reported that
independent jewelry retailers out-performed
revenue expectations by 2% compared to
June 2019. In fact, year-on-year, diamond
jewelry accounted for a 12% revenue increase.
June’s jewelry data showed the average consumer
spend was $432, up from $345 in the
same period last year. This confirms reports of
modest returns, particularly for independent
doors leveraging online and inventive offline
Covid-combating sales tactics.
These numbers are especially encouraging
when reviewing the recent Bain & Company
down-market findings, the Antwerp
Diamond Center’s dismal Global Diamond
Industry Report and the Bureau of Economic
Analysis that showed jewelry consumption
down 19% when comparing January to May
2020 with the same period in 2019.
In March 2020, De Beers launched a weekly
quantitative survey collecting data on the
attitudes, and expectations of U.S. consumers.
Once a month they look at diamond-specific
attitudes, consumer and retail.
One of its most recent releases, entitled In-
Store Experience Still Preferred for Expert Advice
and Personal Attention, reported that 62%
of consumers prefer to buy diamond jewelry
at their local independent jeweler rather than
online, providing that the environment in the
store is safe (i.e. masks, hand sanitizer, etc).
Communication Camaraderie
The goal of this story encompasses one
word: Unity. Without unity, our industry will
implode. With unity, we’ll rise. Yet, we stand
divided, alone in each corner. But alone isn’t
working, especially in these troubling times.
If you believe one must suffer chaos to gain
construction, the diamond industry should
have built the world’s tallest tower by now.
Instead, its boots are on the ground, grasping
rope and playing tug-of-war. Both sides will
get very muddy unless we simultaneously let
that dividing rope fall.
In Part Two, we talk to leaders from AGS, GIA
and IGI about LGD grading and nomenclature.
Hopefully, this will help us gain clear and consistent
verbiage of how the two sides must speak
together as one. ■
Dan Scott is a brand
architect at Luxe
Licensing, a NYCMetro
brand and
marketing agency.
Clients include Harry
Winston, Chanel, Gucci
and JCK Virtual, as
well as up-and-coming
fine jewelry and
demi-fine brands. Dan
welcomes conversation
and can be reached at
dans@luxelicensing.com
or at luxelicensing.com. ■
JCK Goes Virtual
Report by Cynthia Unninayar
With the cancellation of its Las Vegas show
last June, JCK Events scrambled to create
a virtual trade fair providing the jewelry and
watch industries the occasion to connect online.
The result was JCK Virtual 2020 that kicked off
on August 10. In addition to the virtual booths
or showrooms on the platform, the event hosted
a range of talks by industry experts on a variety
of topics.
According to show officials, the five-day event
brought together some 3,400 attendees (which
included 2,400 buyers) and 700 exhibitors—
many from overseas—who were offered free participation
if they signed up for the 2021 show.
The home page of the event featured an image
that was reminiscent of the entrance to the
physical JCK venue at the Sands Expo in Las
Vegas, but once inside, all similarities ended.
The main show page offered the visitor the option
of searching the show, using the Exhibitor
and Product Directories, by category, product,
and company name. Each booth or showroom
offered a description of the company, its marketing
team, a few product photos and the
opportunity to send a message to the team.
The platform generally worked well, despite a
few glitches here and there, as might be expected
given the nature of the event.
Since booths were maintained by the exhibitors,
some were excellent, with good images, videos
and product descriptions as well as timely
replies to messages, while others
clearly needed more experience.
“At a time when how our industry connects is
not currently an option, JCK Events had a responsibility
to quickly pivot to bring our industry
together and facilitate vital business connections
in a new way… [T]he challenge was to create an
online platform that replicates the experience of
in-person meetings and browsing a diverse mix
of products and exhibitors on a show floor as best
as possible,” said Sarin Bachmann, Group Vice
President, Reed Jewelry Group. “While our audience
enjoyed feeling connected via the education,
browsing product and meeting virtually, it
was clear the digital experience cannot replace
or fully replicate the experience of our in-person
trade shows and events…”
Mixed Opinions
In messaging and sometimes speaking to a
number of exhibitors, it was clear that reactions
were mixed. The three most frequent comments
I heard from vendors were: (1) it was a very slow
show; (2) most people with whom the exhibitors
communicated were other vendors trying to sell
them something; and (3) the virtual show cannot
come close to replacing a face-to-face event.
On the other hand, all of my interlocuters
thought this virtual gathering was a good first
step and a promising option in light of the current
health crisis. They also felt that this type of
event could be a good adjunct to traditional inperson
fairs, especially in terms of networking.
Some also reported that they made a few good
contacts for future follow-up, and one advantage
was that visitors could log on from home or office
any time during the show day.
Lab-Grown Diamonds Well Represented
As in traditional trade shows, the variety of
products was wide, from inexpensive silver pieces
to sumptuous diamond and gemstone jewels in
platinum or gold, from delicate charms to splendid
bridal rings of all sorts.
Showing the growing importance of the labgrown
sector, LDGs even had their own category,
which listed 37 exhibitors, mostly growers or
wholesalers, while a number of other LGD jewelry
companies were listed in other categories.
For lab-grown diamond exhibitors, reactions
and experiences were similar to those of other
companies.
Maulik Navadiya, sales manager of Torontobased
Neo Lab Growns, stated, “Overall, the
show was okay, but we felt that traffic was really
low even after creating an above-average profile,
running a special promotion for JCK, and contacting
numerous visitors using the matchmaking
tool. Having said that, we connected with a decent
number of potential clients, which hopefully
will develop into a good business relationship
and ultimately make some sales. On the technical
side, the meeting platform worked well, but the
matchmaking wasn’t programmed well for the
job. Since it was just the first year and they did
all this in a short period of time, we are looking
forward to the coming years where the platform
will be improved and hopefully they can do more
marketing to get more traffic online for people
who cannot visit the show.”
Rahil Shah, Operations Manager of New
York-based Paradiam, commented, “The show is
a great effort to stay connected with the market.
More than immediate sales, we expected to make
some good connections with some good people
and we are finding that.”
Darshan Joshi, of India-based Diabon, commented,
“At the recent JCK Virtual 2020, we saw
an increase in inquiries for lab-grown diamonds
and were able to connect with a lot of new prospective
clients and we are very optimistic of converting
these inquiries into long-term clients.”
He added that he is “very confident that the
demand for LGDs will increase in the years to
come and will create its own space for millennials,
eco-sensitive and other consumers looking to
own the luxury of a diamond on a tight budget.”
The pandemic has brought to the world’s attention
the need to bring trade shows to cyberspace
while efforts are made to eliminate Covid-19.
During these efforts, new opportunities will arise
as online shows, large and small, pop up around
the world. Still, though, exhibitors and buyers
say they are looking forward to JCK Las Vegas,
scheduled to return to the Sands Expo, June 4-7,
2021. Images are courtesy of the company featured. ■
