Since the pandemic, the U.S. jewelry market has undergone a dramatic transformation, with online sales soaring while physical retail locations decline. Amid these shifts, lab-grown diamonds have surged in popularity, fueled by lower prices and social media-driven trends. At the same time, high-end precious metal jewelry brands are consolidating their market positions, while accessory-focused brands face intensifying competition and increasing market fragmentation.
To adapt to this rapidly changing landscape, U.S. jewelry retailers have aggressively expanded their online presence. Those that remain heavily reliant on brick-and-mortar stores may struggle to survive as the market continues to evolve.
Lessons for China’s Lab-Grown Diamond Sector
AIDI Think Tank believes that China’s lab-grown diamond companies should take the following strategic steps to navigate market shifts effectively:
- Differentiate Branding: Establishing a unique brand identity is crucial to standing out in a competitive market.
- Enhance Online Operations: Strengthening digital marketing and e-commerce capabilities will be essential for long-term growth.
- Expand Product Variety: Offering diverse and innovative designs will help attract a broader customer base.
The U.S. Market’s Shift to Online Jewelry Sales
Key Trends:
- Decline of Brick-and-Mortar Stores: Both store count and market share have dropped significantly. Before 2020, the U.S. physical jewelry retail sector steadily grew, increasing from $41.6 billion in 2009 to $49.5 billion in 2023, with a CAGR of 1.3%. However, due to pandemic restrictions, the market shrank by 29% in 2020, with online sales capturing 35% of the market share, up by 8 percentage points year-over-year.
- Consumer Behavior Shifts: Jewelry spending has decreased, and aging industry leadership is affecting retail dynamics. Additionally, the rise of younger consumers—who are more inclined to shop online—has contributed to lasting changes in purchasing habits.
Online Channels Fuel Lab-Grown Diamond Growth
- Competitive Pricing & Digital Appeal: Lab-grown diamonds are thriving in online marketplaces, offering affordability and variety. Between 2018 and 2024, market share for lab-grown diamonds increased from 2% to 39%.
- E-commerce Favors Budget-Friendly Products: Online consumers tend to favor lower-priced items. Reports indicate that 65% of shoppers are reluctant to buy high-end fine jewelry online, while top-selling jewelry items on Amazon typically range from $10 to $20.
- Social Media Boosts Personalization Trends: Viral trends on platforms like TikTok have driven demand for unique, customizable jewelry pieces. For example, searches for “Signet rings” surged between 2020 and 2022 due to online discussions linking them to wealth and status.
The Rise of Market Consolidation in Luxury Jewelry
- Dominance of High-End Brands: The market share of the top five and top ten luxury jewelry brands in the U.S. increased from 7.1% and 8.0% in 2020 to 11.4% and 12.1% in 2023, respectively. Despite store closures, the leading 15 brands expanded their market control, increasing their collective share from 22.37% in 2019 to 24.19% in 2023.
- Intensified Competition in Accessories: Fashion jewelry brands are experiencing growing competition, forcing them to shift toward e-commerce. Market concentration for the top five and top ten accessory jewelry brands declined between 2018 and 2024, reflecting an increasingly fragmented market landscape.
U.S. Jewelry Retailers’ Response Strategies
- Mergers & Acquisitions: Signet Jewelers acquired Zales, but the merger did not significantly improve market share, leading to further store closures.
- E-commerce Investments: Signet’s acquisition of Blue Nile accelerated its online market penetration, increasing its digital sales from 5% in 2014 to 23% in 2024.
- Self-Built Online Platforms: Brands like Pandora invested early in e-commerce, with online revenue growing at a CAGR of 28.86% between 2016 and 2023, helping them withstand post-pandemic market pressures.
Implications for China’s Lab-Grown Diamond Industry
China’s jewelry sector is already experiencing a strong shift toward online retail, with one offline store per 17,000 people—compared to the U.S. average of one store per 19,000 people—indicating potential for further downsizing.
Based on the U.S. market’s trajectory, AIDI Think Tank suggests that Chinese lab-grown diamond brands adopt the following strategies:
- Brand Differentiation: Unique positioning can help brands carve out market share.
- Strengthening Online Presence: Investing in digital platforms early can provide a competitive advantage.
- Aligning Product Offerings with Online Trends: Focusing on affordable, trend-driven designs will increase consumer engagement.
AIDI Think Tank forecasts the future of sustainable jewelry—including lab-grown diamonds, synthetic gemstones, and cultured pearls—will be shaped by four key trends: fashion-driven designs, product diversification, online expansion, and a growing base of younger consumers.
For a deeper analysis of these trends, AIDI members will receive an exclusive report. These insights should be carefully evaluated and are not intended as direct investment advice.