Millennials and the online diamond boom
Exclusive gems are no longer the preserve of the high street. India Sturgis meets an internet firm whose business is booming
In a tiny nondescript room, up a musty and yellowing staircase behind a Mexican restaurant in Mayfair, a group of master craftsmen are painstakingly working on diamonds worth many millions of pounds. Given the glistening factory belt, it pays the security bills to be discreet. With Valentine’s Day just around the corner, it’s little wonder 77 Diamonds’ workshop – one of only a handful left in Britain, as 90per cent of jewellery purchases here are made abroad – is alive with activity.
Stones of every size, colour and clarity are being set, mounted, buffed and shaped; the air tastes thick with gold filings and buzzes to the tune of myriad miniature drill bits. However, rather than ending up in Hatton Garden or a strobe-lit showroom off Sloane Square, these diamonds will be couriered into the hands of an online shopper who may never have seen it in – or on – the flesh before purchase, or asked a harried shop assistant timehonoured questions, such as “What’s a marquise cut?” and “Aren’t colour and clarity basically the same thing?”
Welcome to the brave new world of diamond buying; and a growing breed of consumer who – perhaps having swiped right to find their partner in the first place – thinks nothing of spending six figures on the jewel to seal the deal, at the click of a mouse.
According to 77 Diamonds, Europe’s largest online diamond jeweller, business has never been brisker. “This January was off the charts,” enthuses cofounder Tobias Kormind, a former investment banker at Morgan Stanley, who remortgaged his flat to launch the business in 2006 alongside Vadim Weinig, a former diamond polisher and risk manager. “We are ridiculously over target.”
The company boasts the biggest selection of diamonds of any website worldwide, and was last year reported to be on course to turn over £25million.
As well as off-the-peg rings, necklaces, earrings, cufflinks and bracelets, they offer a bespoke service where clients can click to design engagement and wedding rings or pendants, tweaking the stone’s shape, cut, colour and clarity, while windows pop up to ask whether you need help with the design, before a 360-degree video displays your final choice.
The aim was to compete with the world’s finest jewellery companies at a price that would blow them out of the water by cutting out the middleman wholesale market; buying direct from manufacturers; and cutters from all over the world and passing the savings on to consumers. The result has been a business model that touts up to 76per cent cheaper deals than high street stores such as Tiffany or Graff, and is part of a sea change in consumer spending habits on high-ticket jewellery.
It is Kormind’s belief that consumers have never been savvier and old models of in-store consultations and hidden price hiking are outdated. “We are trying to get ahead of the curve. It has happened in every other space: look at Amazon. Price transparency brings consumers who are empowered and have never been more demanding.”
Given the decline of Hatton Garden amid rising rents and falling profit margins – not to mention multimillion-pound heists – theirs is an unlikely Cinderella story.
The most anyone has paid for a diamond without viewing it, only flying in for the final stage of production, is £500,000, and more than half of 77 Diamonds customers will part with as much as £3,000. Already they’ve been deluged with inquiries for look-a-like Meghan Markle engagement rings based on her three-stone design with a cushionshaped centre diamond. Cushions are, apparently, very in. Pippa Matthews, née Middleton’s Asscher cut sparkler caused a similar ruckus; orders for their Art Deco-inspired design went through the roof.
But what of millennials? Surely they are too cash-strapped with student debt, too worried about spiralling house prices, and too busy spending what’s left on avocado brunches and city breaks to dig deep for diamonds – internet-bought or otherwise? Kormind doesn’t buy this.
“Millennials still consider diamond jewellery as one of the main aspirational gifts you can give. The attitude of different generations hasn’t changed. If anything, social media and Hollywood’s influence through these platforms has put more pressure on them. There are so many people that you reach out to when you get engaged and there’s a lot of awareness about the jewellery that goes with that.”
A 2016 report by De Beers, the jewellers who coined the Forties slogan “a diamond is forever”, found millennials spent $26billion (£18.6billion) on new diamond jewellery in its four key markets (China, India, Japan and the United States); more than any other generation.
The market has also not been dented by falling marriage rates or right-on would-be-weds eschewing traditional engagement rings (as signs of “ownership”) altogether. Last year, it was reported that global diamond sales inched up to $80billion (£62billion) in 2016, despite gloomy forecasts.
Of course, not everyone buys diamonds for someone else – or waits for someone to give them to them.
“We’re finding people, women especially, are more empowered to purchase these things for themselves,” explains Kormind. “Classic diamond jewellery – studs and the eternity ring – are also rewards when you’ve had a good year or a good bonus for yourself.”
What’s more, while the Brexit vote caused diamond prices to soar by about 20per cent as sterling struggled against the dollar, against which diamonds are generally priced, 77 Diamonds saw no drop in sales. Customers simply spent the same, but on smaller and less high-quality items.
Back in the workshop, I meet master craftsman Stephen Barnard, an enchanting man with 50 years’ experience in the jewellery business, who has worked on creations for Victoria Beckham and Princess Diana as well as the Burton-taylor pear-shaped gem that was valued at a cool £14.4million. After passing through Boodles and Garrard, he settled here five years ago, for a future cutting internet-bought gems.
“This is the way trade is going,” he insists. “People want simplicity. Tastes have changed. It’s like architecture. In the old days I’d spend days making an elaborate ring, but now they want something simple and to invest in the stone.”
Someone plops a ring into a high-frequency cleaning bath and Barnard smiles. “They are more fussy here than Boodles. I used to get away with way more.”