Diamond Sales Rise 35% in November, Helped by Higher Prices

Demand for diamond jewelry is rising this holiday season, together with the overall demand for jewelry seen in the US since mid-2020. As a result of this surging demand, jewelry retailers had an added 35% in revenue from diamonds in November.

The increased income trickles up to diamond wholesalers and diamond manufacturers. What should be of most interest to the diamond midstream is which diamonds did better, and which actually suffered from a decline, and why.

The Elements of Rising Diamond Sales

The surge in consumer demand for jewelry led to rising polished diamond prices as well. According to a Tenoris analysis, the average value of diamonds sold by US jewelry retailers rose 16% year over year in November.

But it’s not just rising prices that pushed up the average total value of diamond sales — it is also a shift in mix.

Jewelers keep on hand a stock with a wide variety of loose diamonds as well as semi-mounts — jewelry settings without a center stone, or without stones at all. Jewelers do so to fit consumer taste to budgets, while allowing customers to customize their jewelry.

Today, American consumers have a greater tendency to choose much larger diamonds when they are standing in a store, deciding on which diamond to set in their preferred setting.

Top Diamond Performers

The number of larger diamonds weighing one carat or more increased 26% in November. This includes diamonds weighing 10 carats and above.

The most notable increase was for diamonds between 1 and 3 carats. By unit sales, demand for these jumped 33% and represented 77% of revenue from loose diamond sales.

Reigning supreme above all else were 3-carat diamonds. Although just 3% of loose diamond sales by unit, they contributed 13% of the revenue from diamond sales in November.

Compared to November 2020, these large diamonds had the biggest sales increase, shooting up 90% by number of units sold. The average price of these goods increased 29%.

The combination of higher prices and soaring demand resulted in a 145% rise in specialty jewelers’ revenue from 3-carat diamonds.

Some Diamonds Lost Favor

While 1–3 carat diamonds have been having a fantastic holiday season so far, this was at the expense of some staple goods.

Loose diamonds from 0.40 to 0.89 carats suffered from a decline in sales. These items lost between 5 and 14% in unit sales.

In terms of revenue, prices of half-carats increased enough to compensate for the decline in the number of stones sold. However, revenue from 0.40 carats and 0.70 carats declined year over year.

Manufacturers may have already felt some of that decline in demand. If they haven’t yet, there is a bullwhip effect coming their way. This will take the form of memo returns from retailers and refusal to buy smaller goods.

The Hottest Price Points

Measured by price point, the loose diamonds that sold best were those retailing in the $2,500 to $5,000 price bracket. These are clearly holiday and bridal items that American consumers are buying with plenty of cheer.

The Bottom Line

Overall, 2021 has been a record-breaking year, and diamond jewelry sales are rising together with the fantastic rise in jewelry demand.

So far, the holiday season has added to the year’s dramatic rise in consumer purchases.

That said, consumer demand always has its trends, and this year is no different. Sales of smaller loose diamonds by retailers has declined compared to 2020, showing that consumers have a lesser interest in them.

Consumers have instead gravitated towards the larger, pricier items of 1–3 carats.

This is excellent news for the diamond industry as it highlights that in the world’s most important consumer market, appetite for diamonds as a center piece is currently solid.