In June of this year GIA announced that they were going to be changing the way they are going to grade lab grown diamonds. This was very large and significant news since GIA has been the leading authority on the grading of diamonds and their creation of the 4C’s grading model is the industry standard for diamond grading that is used today.
The Change
GIA is no longer going to use their 4C’s grading approach to grade Lab Grown Diamonds, they will now use a simplified grading system composed of two grades: Premium and Standard. If a diamond does not meet the grading criteria for standard, it will not be graded by GIA. GIA’s reasoning for this is that 95% of of Lab Grown diamonds are fitting into a narrow range of grading. They created the 4C’s approach to grade natural diamonds and they wish to use a different grading scale for lab grown diamonds since the 4C’s wasn’t intended for grading anything other than natural diamonds.
Early Thoughts
The verbiage used from GIA has given us a lot to think about since this news was announced. We try to understand this from GIA’s perspective and we do see it. If you have the strongest reputation for having the most stringent grading standards, we can see why having most of these diamonds grading very high would be tiresome since there isn’t full utilization of the continuum that the 4C’s offers. At the same time, changing the language that the customer is comfortable with does not seem very beneficial to the customer. If customers can’t fully comprehend what the new grading scale means, how will that impact consumer interest in GIA certified lab grown diamonds? It’s this relationship that seems challenging at the early thoughts of this process. Diamond grading processes have allowed customers to fully understand what they are getting when buying a diamond. Introducing a new grading scale that uses different criteria doesn’t appear to be beneficial to the consumer. So when a customer is looking for an engagement ring, it adds another layer to the complexity that the process that does not appear to be necessary.
What Does This Change Mean for Lab Grown Diamonds?
It’s hard to accurately decipher what this means without speculating. Currently the largest volume of lab grown diamond grading is held by IGI. It seems that will be unlikely to change with GIA’s departure to a different grading system. Our guess is that customers will prefer to stay with a grading system that they can understand, after all, you would want to know exactly what you are buying and be able to decipher what it means and that seems unlikely to change. Currently lab grown diamonds are out selling natural diamonds by a significant amount, and in the past 5 years there has been a significant increase in the amount of lab grown diamonds sold in our office as well as others in industry. From our perspective, the only way customers change their desire for diamond grading is if lab grown diamonds become synonymous with perfection. It could happen, but there would still be a need to grade the diamond on the proportions. Hard to say what the future will hold, but one thing for certain is that lab grown diamonds will continue to be a part of the jewellery industry.
Why are Lab Grown Diamonds so Popular?
This comes from the road that the Natural Diamond paved in western culture over the past few generations. De Beers did an incredible job at making diamonds the go to choice for engagement rings, and this is something that does not appear to be changing anytime soon. So why are lab grown diamonds popular? It’s simple, you get to have the exact ring (or jewellery) you want for a price that fits well within most budgets. That is essential to the perfect engagement ring. It’s especially popular with younger people who are doing a lot to get established in life right now. There are so many costs that young couples are facing (housing is at the forefront) so being able to get the best value for your money is important. People also love the ability to truly get the style they want, they face fewer restrictions in what style of diamond they can have. This is what makes lab grown diamonds so popular for engagement rings and jewellery in general. You can have the diamond you want, in the style you want, without having to sacrifice your budget. This isn’t to say that the world of the natural diamond is over, far from it, but lab grown diamonds are significantly changing the way customers shop for diamond jewellery.
Final Thoughts
We look forward to seeing what this grading system from GIA will look like. Our biggest concern is how it will impact the shopping experience for the customer. For customers who are shopping for an engagement ring or diamond jewellery we don’t think this will put customers off from lab grown diamonds. Lab grown diamonds have established themselves in the landscape and will continue to be a staple for customers for years to come. There will be changes in the landscape, and we think the consumer will be the one who leads those changes. There are elements of the industry who encourage customers to buy a natural diamond over a lab grown one, and these groups also tend to be large stake holders in natural diamonds. Customers will vote with their wallet and right now the vote is loud and clear, people want stunning diamonds at an affordable price. Lab grown diamonds have answered that call and will continue to answer it in the future. If you are considering buying an engagement ring and are worried about this recent change, feel free to reach out to us to talk about it more. We consider this change an interesting one, but in terms of the market and options available there will still be great lab created diamonds available from other grading groups. Lab grown diamonds are still the number choice of our customers whether they are shopping for an engagement ring, earrings, pendants, and more.