In the last two years, the global diamond industry has grown about 2% at every step of the value chain. Olya Linde, a partner with Bain’s Mining practice, describes how digitalization, lab-grown diamonds and younger consumers’ shifting preferences are affecting the market, and how retailers can maintain strong growth.
Read the related Bain Report: The Global Diamond Industry 2018: A Resilient Industry Shines Through
Read the transcript below.
OLYA LINDE: Following a period of high volatility, the diamond industry delivered impressive performance over the last two years, growing about 2% at every step of the value chain. There are three key trends that impact the future of the diamond market. Number one is digitalization. It affects everything from exploration to production to delivering superior customer experience.
The second trend is continued emergence of lab-grown diamonds. With production costs, wholesale prices and retail prices rapidly declining, the lab-grown diamonds now are becoming available to a much wider set of consumers, arguably which is a good thing for the entire diamond industry, as it drives the demand for all diamonds up.
The third trend is the shifting preferences of the younger generation. Self-purchase category is increasing in importance among millennials and Generation Z, which both arguably are getting into the height of their spending power. And the growth of social media is becoming more and more important in the purchasing decisions that those generations make. Therefore retailers really need to tailor their messages and rethink the entire shopping experience to attract and retain those consumers.
Despite the expected recession globally, we believe the fundamental outlook for the diamond industry is very strong long-term. And we expect the industry to deliver about 2% growth annually from now until 2030.