Pandora’s decision to abandon mined diamonds in favor of lab-grown stones has not only paid off but has also resonated well with younger consumers. According to a report by the Financial Times, Pandora’s CEO, Alexander Lacik, revealed that younger buyers have fueled a surge in sales of lab-grown diamonds, leading to a decline in the demand for mined diamonds.
Lacik noted that lab-grown diamonds offer a more affordable option, which has attracted a new wave of consumers to the jewelry industry. He highlighted that younger customers are more open to the idea of lab-grown diamonds, while older clientele still prefer mined diamonds.
In a strategic move, Pandora became the first major jeweler to shift to a lab-grown diamond-only strategy in 2021, expanding its offerings beyond traditional charm bracelets and necklaces. The company’s decision has paid off, with a nearly doubling of sales of lab-grown diamonds in the first quarter, resulting in an 87% increase in revenue.
The shift towards lab-grown diamonds aligns with the preferences of Gen Z consumers, who are more likely to prioritize buying expensive retail products over paying for events or shows, according to PYMNTS Intelligence research. As Gen Z’s disposable income is projected to increase significantly in the coming years, businesses are keen on capturing this demographic as their future workforce, customers, and investors.
Despite their increasing purchasing power, Gen Z consumers still face financial challenges, with a significant portion living paycheck to paycheck. Splurging on nonessential items is cited as a top reason for their financial struggles, highlighting the importance of catering to their preferences and financial needs in the jewelry industry.
