A New Diamond Culture at Walmart
December 07, 23
Walmart, the world's largest retail group, describes many of its diamond jewelry items as "cultured" rather than lab grown.
It's an interesting choice of word. The Diamond Terminology Guideline, jointly produced by eight industry bodies, says quite clearly: "Do not use the following terms: 'cultured diamonds' and 'cultivated diamonds' as 'cultured' and 'cultivated' refer exclusively to organic/biogenic products. Although the term is fully and completely in compliance with the Federal Trade Commission Jewelry regulations.
But the fact is that regardless of its choice of words, the multinational retail corporation that generates more revenue than Amazon, Apple or Exxon Mobil, is already making big money out of lab growns, and is set to make a great deal more.
Jewelry is something of a sideline for Walmart, representing no more than 0.6 per cent of its total income.
But last year it still sold $3.38bn of watches and jewelry, according to National Jeweler's The State of the Majors, making it the second biggest seller in North America after Signet ($7.29bn).
Walmart stacks its diamonds - cultured or otherwise - high and it sells them cheap. There's an endless supply of lab growns, prices are plummeting, the margins are great and the customers are happy to get more flash for their cash.
In the last year Walmart's lab grown sales have increased by 600 per cent, according to Michelle Gill, its vice president of jewelry and accessories.
And it intends to build on that with a new range of in-store items, and an expanded online range.
"This is a wonderful way that we can introduce a much higher-quality diamond at a much lower retail price as compared to mined diamonds," Gill told WWD last week.
"We've seen overall in the industry a decline in mined diamonds, so we're reacting to both the trend in the industry as well as the trends that we're seeing in our customer base.
"It is really exciting for our customers who historically have had to give up quality, clarity and carat size in order to get a real mined diamond. Now, they can get a real lab-grown diamond at 1 carat to 1.5-carats."
She highlighted a 1.5-carat solitaire lab-grown diamond ring set in 10-karat gold which retails in Walmart's stores for just $698.
A natural diamond equivalent would sell for around $5,800, she said, although she didn't provide 4C details.
That's a lab grown for an eighth of the mined price, significantly more than a recently highlighted example of a Walmart 3-ct G / VS1 lab grown being sold for $2,975. That compared to a natural diamond of the same spec at Blue Nile for $8,190.
The lab growns may retail for a fraction of their mined counterparts, but the margins are even bigger.
Walmart knows its customers and it knows they like a bargain. It also knows which side its own bread is buttered.
Have a fabulous weekend.