Lab-grown diamonds are gaining ground with consumers and retailers as sustainability meets luxury online and in-store.
If there’s one brand to watch, it’s VRAI (pronounced “vray” meaning “true” in French), which distills diamonds from carbon atomized in a plasma reactor and grows them into jewelry-grade gems. VRAI was acquired by Diamond Foundry in 2016 and operates as its own brand.
VRAI President and CEO Mona Akhavi spoke with PYMNTS about her outlook on jewelry and the broader luxury sector that held up well in inflationary conditions last year and means to deliver a repeat performance in 2023 with new showrooms, partnerships and payment plans.
“I’m happy to say that during the peak of holiday gifting, we did see many of our categories around gifting diamond jewelry grow by two times year over year,” Akhavi said, adding that “lab-grown diamonds are what consumers, especially millennial consumers, are leaning towards.”
Lab-grown diamonds are every bit as real as mined diamonds sans the uglier aspects of the traditional diamond trade. That resonates with shoppers as she said research shows 70% of millennials want to know the provenance of diamonds, and many are flocking to lab-grown.
She said that VRAI controls its supply chain end-to-end, it can make sourcing assurances that shoppers want. “VRAI controls the process. We have our own retail stores. We have an online presence. We started as a digital-first brand. We can pass on a lot of the savings to consumers. Consumers are not paying the price points that they would be paying with a luxury legacy brand, which is fairly marked up,” she said.
With Valentine’s Day fast approaching — like a special Black Friday for the jewelry sector — VRAI has been busy with partnerships and distribution deals to make the most of it.
On BNPL, Apple Pay and In-Store Experience
While it began as a digital-first direct-to-consumer (D2C) brand, the company has since built showrooms in New York, Chicago, San Francisco, London, Madrid, Beijing, Chongqing and Shanghai. She said VRAI benefitted from the return to retail stores in 2022, seeing a curious effect in live settings.
“We saw an interesting shift of sales to our offline stores where people were excited to come in and look at these diamonds,” she said. Atomically, lab-grown diamonds are identical to mined diamonds, “But still people are very curious to see what it looks like. We saw a change in some of the behavior as people would do their research online and they would decide on a particular budget and piece,” then once they entered stores and held the pieces, budgets went higher.
The brand is also working with Klarna, which drives installment buys of higher-ticket stones.
“That’s been an incredibly big area of growth, especially during holidays and Valentine’s Day,” she said. “In price points, we’re seeing that, depending on the color and clarity of a diamond, it’s around the $3,500 to $4,000 mark,” where BNPL has the biggest impact on sales.
The VRAI showroom concept was originally developed by architect and designer Cass Calder Smith, best known for building the first Tesla showroom. They’ve now decked out showrooms with projectors and screens for messaging, information, and education, she said.
VRAI added a 3-click online checkout to the website. Combined with 17 shapes, up to 11 carats in size, and an inventory of 2,000 diamonds typically on hand, it’s all about selection and ease.
Also looming larger is the use of Apple Pay. “Apple Pay, interestingly, is something that’s been really on the rise for us in the past year, both online and in our stores. People are more comfortable using Apple Pay to make larger purchases.”
Distribution Is a Diamond’s Best Friend
The company’s department store distribution and partnerships are vital to its growth.
Citing market research that luxury will achieve 5% growth in 2023, Akhavi said VRAI Is gearing up for its first “VRAI Moment” of the year, Valentine’s Day.
“We have a lot more distribution in place for Valentine’s Day this year compared to last year, she said. “We’re also in a lot more luxury department stores. We are carried in Saks and Moda Operandi, which we just launched before the holidays at Selfridges. We launched at Holt Renfrew in Canada. In Asia, we have Lane Crawford … in Hong Kong.”
Next up: Bergdorf Goodman in Q1, where VRAI will be the first lab-grown diamond jewelry to be carried by the iconic department store. Also on deck is a new collection for Saks in Q2.
Another inspired partnership is with Bride’s Magazine. She said, “We just launched Bride’s Valentine’s Day collection. Bride’s Magazine has been an incredible partner for us because it’s exactly the type of audience that’s been looking for products like ours.”
VRAI’s omnichannel success is triggering new investment, including expanding showrooms in New York, the grand opening in Madrid, and a possible Newbury Street location in Boston.
“The year started quite conservatively because I think there’s quite a bit of doubt in the market and rightly so with what’s going on,” she said. “We are very conservatively thinking that this Valentine’s Day will be a minimum of 5% higher. Going into Q2 and Q3, we’re extremely hopeful about this year because of the distribution plan and marketing plan. We’re expanding.”
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