Podcast: Who Buys Lab-Grown Diamonds?

Randy Cole, CEO of jewelry retailer Diamond Vault of Troy, breaks down the perhaps surprising demographics of natural and synthetic demand in the latest episode of the Rapaport Diamond Podcast.

Cole sees two main age groups that buy lab-grown diamonds at his appointment-only store in Troy, Michigan: 34 and younger, and 60 and over, he told Rapaport’s Joshua Freedman.

Many women aged 60-plus are seeking a large stone yet can’t afford a big outlay ahead of retirement, Cole said. “But I want what I want,” says the typical woman, according to Cole, “so we’re getting lab and the kids can fight over it after we’re gone, and I don’t care.”

Typical under-35s prioritize a house, a car and experiences, Cole explained. They’ll buy a lab-grown diamond and invest any excess cash in a 401(k) pension plan.

“Of course there’s some in between, but those are the two major groups for us,” he said.

In terms of exceptions, “we get a little bit in the younger group that are going to natural,” he continued. “We don’t get too many in the older group that are going to natural. Most of the people who are older that are coming in for 30th anniversary, 50th anniversary, they’re going lab. They want to save the money. This is a tough economy.”

He also observes a migration to lab-grown among couples buying engagement rings for second marriages. The weakening of natural-diamond prices has made them reluctant to repeat the investment they made before their first marriage, he commented.

Around 90% of sales at Diamond Vault of Troy are lab-grown by units, and 70% by value, Cole reported. He is, however, seeing many consumers gradually shift back to natural, wishing to stand out from friends who wear a stone that so big it’s obviously lab-grown. “There’s a feeling of almost condemnation about the lab diamond in some groups,” he shared.

Speaking on December 23, Cole also reflected on a “really good” holiday season, with high gold and silver prices driving investment demand for gold and silver.

Listen to the episode here:

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