Studies reveal decrease in demand for diamond jewelry with a corresponding increase in demand for colored stone jewelry

Two studies conducted in America and the United Kingdom recently, reveal that the demand for diamond jewelry is on the decline in both countries, and in the United Kingdom there is a corresponding increase in demand for jewelry set with colored stones such as sapphires and rubies in combination with diamonds.
A study conducted by Edahn Golan in America and published in the website of the International Diamond Exchange www.idexonline.com, on Thursday, July 25th, 2013, reveals that in the past decade (2001-2011) Americans had been spending less of their income on diamond jewelry. According to this study, an analysis of American household income and spending compared to jewelry store sales, reveals that in the decade between 2001 and 2011, the average household spending on jewelry declined by 3.1%. However, during this period if we consider the average household spending on diamond jewelry alone, there is an alarming decrease of 13.5%. On the other hand the average income of Americans during this period increased by 19.7%, clearly indicating that even though Americans earned more, their spending on diamond jewelry did not keep pace with their increased income.
The decline in the spending on jewelry and diamond jewelry is more disturbing if we consider the spending of an average American instead of an average American household. The average American spent 13% less of their income on jewelry and 22.4% less on diamond jewelry.
The study in America poses the following questions :-
Why are Americans spending less on diamond jewelry? Are diamond rings and earrings suffering from a better competing product or are Americans simply spending less because they have less discretionary income? Maybe the issue is marketing, a shift in cultural tastes or a change in diamond jewelry perception.
The second study conducted in Britain and published by Brian Milligan, personal finance reporter, BBC News, in their website, www.bbc.co.uk/news/business, covering a period of eight years from 2006 to 2013, have shown that the price of rubies and sapphires have increased faster than that of diamonds.
Gemval, which claims to offer the world’s first online valuation tool for gemstones, reckons that the price of sapphires rose by 37% between January 2006 and January 2013, and that of Rubies by 47% over the same period. The price of emeralds however, rose significantly only in 2005, but between 2006 and 2013 only rose marginally by about 6%.
During the same period, according to RapNet Diamond Index (RAPI), the price for one-carat diamonds rose by 32%. In other words, sapphires and rubies have outpaced diamonds over the past seven years. According to Vashi Dominguez, the founder of the firm Diamond Manufacturers, one of the most established jewelers in Hatton Garden, London, the nerve center of the gem and jewelry trade in London, the demand for colored stones have increased three fold since 2010, and as a result the company is selling fewer diamonds.
Several reasons have been adduced for the increase in popularity of colored stones over diamonds, the first being that colored stones are much more affordable than their pricier and harder relatives, the diamonds. Another reason given by Vashi Dominguez, the Hatton Garden jeweler, is that women are now driving the market, as many more women are now buying gems for themselves, and when women do the choosing they prefer to have at least one colored gemstone in a piece of jewelry – a ruby, a sapphire or an emerald. The tendency for women to do the choosing when buying jewelry, was given a boost when celebrities like Angelina Jolie and Penelope Cruz, who can afford diamonds aplenty, often choose to wear sapphires and emeralds instead.
Thus, the third important factor that has contributed to the popularity of colored stones is the role played by celebrities. Penelope Cruz and Elizabeth Hurley both have sapphire rings, while Halle Berry and Angelina Jolie are fans of emeralds. Kate Middleton, the Duchess of Cambridge, have also made an enormous contribution to the popularity of colored stones, since she wore the sapphire and diamond engagement ring inherited from Princess Diana. Before Kate’s engagemet to Prince William, the Duke of Cambridge, second in line of succession to the British throne, solitaire diamond rings, with a single diamond, was the ring of choice for an engagement. However, after Kate’s engagement, cluster rings with a colored stone, like sapphire, ruby or emerald as centerpiece, surrounded by smaller round brilliant-cut diamonds, have become popular as engagement rings.
Hence, the study conducted in Britain seems to provide answers for the questions posed after the American Study – Why are Americans spending less on diamond jewelry? Are diamond rings and earrings suffering from a better competing product or are Americans simply spending less because they have less discretionary income? Maybe the issue is marketing, a shift in cultural tastes or a change in diamond jewelry perception.
Americans are spending less on diamond jewelry, because a cheaper and more popular alternative, viz. colored stone jewelry mounted with stones such as sapphires, rubies and emerald, are now available. Hence, the answers provided in the above paragraph for the question Why Americans are spending less on diamond jewelry, such as diamond rings and earrings suffering from a better competing product; a shift in cultural tastes; and change in diamond jewelry perception are all partially correct.

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