Comparing the branding strategy of the Lightbox with the programs such as “The Diamond Journey” emerging in the industry in recent years, messages sent by the natural diamond producers can be easily figured out: the lab-grown diamond can’t be comparable with the natural diamond because one is the rare gem and the other is beautiful technology product that can be reproduced in large quantities. While creating new revenues through precise market positioning and low price strategy of Lightbox, De Beers, with its strong market power, uses the Lightbox to define the terminology and marketing of lab-grown diamonds, positions the price of lab-grown diamonds with advanced technology from ELEMENT SIX and most importantly, protects its core NATURAL diamond business.
On May 29th, De Beers, the giant in the global diamond industry, announced that it will launch a new brand, named Lightbox Jewelry to sell fashion jewelry inlaid with lab-grown diamonds. Lightbox is scheduled to initially offer jewelries to US consumers through its official website in September this year.
Lightbox promotional concept map highlighting rela
De Beers stated that it has conducted a huge amount of consumer research and found out that consumers consider lab-grown diamond jewelry as the most attractive and interesting fashion jewelry at a price comparable to other jewelry in this product range. The research also clearly shows that consumers believe that the most unadvisable use of the lab-grown diamonds is wearing in a meaningful occasion.
De Beers designed and positioned the new brand Lightbox Jewelry accordingly. “Lightbox will transform the lab-grown diamond sector by offering consumers a lab-grown product they have told us they want but aren’t getting: affordable fashion jewelry that may not be forever, but is perfect for right now,” said Bruce Cleaver, CEO, De Beers Group. “Our extensive research tells us this is how consumers regard lab-grown diamonds – as a fun, pretty product that shouldn’t cost that much – so we see an opportunity here that’s been missed by lab-grown diamond producers. After decades of R&D investment, we’re able to offer consumers a better price today.”
The century-old De Beers had firmly stated that the lab-grown diamonds produced by its Element Six would not be used in the jewelry market. Why is it now throwing this blockbuster to the industry?
Defining the pricing model for lab-grown diamonds – transparent value positioning
Lightbox will offer white, blue and pink lab-grown diamonds up to 1ct, priced at $800/ct without carat premium. It also doesn’t grade the lab-grown diamond’s color, clarity, or cut and the blue and pink lab-grown diamonds are sold in the same price as the white (i.e. a one carat pink solitaire costs $800 and a half carat blue costs $400). De Beers said that they don’t think lab-grown diamonds need to be graded because they are same. And Lightbox does not sell polished lab-grown stones but only jewelry, the price of which consist of the stone and the setting. (Lightbox charges $100/piece for silver setting and $200/piece for 10 karat gold).
Lightbox pricing model
Lightbox’s pricing is simple, direct and highly competitive in the current market. For example, a medium-quality natural diamond of 1ct sells for about $8,000, other lab-grown diamond producers sell for $4,000, and Lightbox sells only for $800. The search result on a China mainland e-commerce platform shows that lab-grown diamonds are graded according to the 4Cs, priced according to different sizes and colors and prices are much higher than that of Lightbox.
Don't consider Lab-Grown Diamonds as Diamonds – Let consumers understand what lab-grown diamonds are
According to the latest study by the Diamond Producers Association (DPA), many consumers still do not understand the difference between natural and lab-grown diamonds. De Beers, through the launch of Lightbox, can promptly and authoritatively help consumers clarify suspicion, fully understand the nature and production methods of lab-grown diamonds and the differences between lab-grown and natural diamonds.
Lightbox official website explaining the pricing strategy
Major producers and high-tech companies have successively laid out the “The Diamond Journey” projects in recent years – De Beers launched the blockchain platform, Dominion and Sarine launched CanadaMarkTM, etc., which constantly telling consumers the transparency and responsibility of natural diamond production and the preciousness and uniqueness of each natural diamonds. Comparing the “The Diamond Journey” project with Lighbox’s strategy, the messages sent by the natural diamond producers can be easily figured out: the lab-grown diamond is a exquisite jewelry material that can be reproduced in large quantities and the natural diamond is the essence and gift of nature, which means that the lab-grown diamond can’t be compared with the natural diamond, because one is the rare gem and the other one is just the beautiful technology product.
Making Lab-Grown Diamond a Fashion Accessories – Lightbox Accurate Marketing Positioning
Sally Morrison, the head of marketing for Lightbox, said the brand’s products were meant to be viewed by consumers as playful accessories. “Everyone who is in this space is focusing their marketing on the bridal category,” Ms. Morrison said. “And we believe they are missing an incredibly interesting opportunity: the self-purchasing professional and younger woman, the older woman who already has a jewelry collection,” and any woman “who doesn’t want the weight and seriousness of a real diamond for everyday life.”
the promotion map on Lightbox official website
In fact, in Lightbox's initial plan, there is no design for the ring, only necklaces and earrings. The brand positioning strategy of Lightbox is very clear, focusing on the daily, affordable, young, and fast-consuming fashion jewelry market segment, totally different from the natural diamond market that symbolizes eternity, heritage and love. And De Beers hopes that the lab-grown diamond jewelry market will develop in this direction.
Entering different market sections – The multi-brand strategy of the century-old De Beers
Diamonds industry leader De Beers steps into lab-grown diamonds market, getting different responds from the market. Some cheered, some are surprised and even feared and others are puzzled: does De Beers just want to regulate the market?
Currently, 85% of De Beers’ shares are controlled by Anglo American and the remaining 15% are held by the Republic of Botswana. From 2009 to 2014, Anglo American Group’s stock performance was weak. In 2014, De Beers was the largest contributor to Anglo American’s basic profit of 40%.
Rob Bates, news director of JCK, once commented on De Beers’ multi-category development strategy in recent years, saying that De Beers is increasingly like Wal-Mart and other department stores. Take a look at De Beers recent initiatives: blockchain technology platforms, online auctions with high-end polished diamonds, GemfairTM to help artisanal and small-scale miners to sell diamonds, and opening lab-grown diamond jewelry brands. Obviously, De Beers still insists on multi-category development strategy and use it to ensure industry leading position and create revenue.
Bruce Cleaver, CEO of De Beers Group said “while it will be a small business compared to our core diamond business, we think the Lightbox brand will resonate with consumers and provide a new, complementary commercial opportunity for De Beers Group.” The New York Times commented on De Beers's move: through its aggressive pricing and pointed marketing, De Beers clearly aims to be a dominant player in this growing market, while simultaneously protecting its core business. In short, De Beers still has to create profits, including the profits of natural diamonds and the profits in the fashion market, and be responsible for its parent company Anglo American and investors.
Last year, De Beers invested ~US$3 billion in mine production and maintenance. To support Lightbox, De Beers Group is investing a total of US$94 million over four years in a new Element Six production facility near Portland, Oregon, adding to Element Six’s existing UK-based facilities. Once fully operational, the plant will be capable of producing upwards of 500,000 rough carats of lab-grown diamonds a year. While protecting its natural diamond business, De Beers’ determination to use this business to subvert the market and create revenue is readily apparent.
Quotes from the Industry
The DPA has always been clear that more fair and transparent practices need to be adopted by synthetic diamond producers.… It is clear from the Lightbox positioning that they will market synthetic diamonds for what they are, low-cost pretty stones, and not for what they are not—real diamonds, rare, precious, and inherently valuable.
– Jean-Marc Lieberherr, CEO, DPA
They are fighting the LG producers by using an age-old Silicon Valley approach – disruption. They are disrupting the disrupters. The strategy that seems to be behind it is very interesting.
– Edahn Golan, independent diamond industry analyst
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How do you think the diamond market will develop in the future?
A. The fight between the natural diamond market and the lab-grown diamond market is a zero-sum game.
B. The natural diamond market and lab-grown diamond market have different positioning and will develop separately
Please feel free to write down your views on market development below and discuss with us.
ELEMENT SIX Introduction
Since the end of World War II, De Beers has been committed to the research of the LAB-GROWN DIAMONDs. After more than 50 years of development, Element Six of De Beers has grown into one of the world's leaders. Its lab-grown diamonds are mainly used for industrial purposes and De Beers has been dedicated to the study of gem-quality lab-grown diamonds to help distinguish between the natural and lab-grown diamonds. Lightbox is Element Six's only lab-grown diamond seller and De Beers said Element Six advanced technology will ensure that Lightbox will offer LAB-GROWN DIAMOND jewelry at a far lower price than the market.
The world's leading lab-grown inspection instrument from IIDGR, a De Beers laboratory
(Left: Automated Melee Testing; Right: SYNTHdetect)
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