At six foot three, Monil Shah strikes a passionate and enthusiastic figure when we meet him on a crisp fall afternoon at his downtown office: the well-established Vandan Associates, a diamond wholesaler founded by his parents in 1993. Joining the company three years ago, Monil carefully observed how his parents and other industry leaders interact with clients, has learned how to inspect diamonds under the wing of his mother and slowly started integrating new technologies to help grow the business.
Completing a Bachelors in Management and Organizational Studies specializing in Consumer Behaviour in 2016, Monil has always been keen to understand how consumers behave and interact. His experience in the business combined with his understanding of the Millenial and Gen Z’s expectations and desires has allowed him to spot opportunities and shifts in the industry well before they were welcomed into mainstream conversation.
However, it wasn’t until Monil’s mother, Sangita, insisted he attend the Hong Kong Jewellery Trade Show that his wheels really started turning. One seminar hosted by the Hong Kong Gemological Association: “The Future of Lab-Grown Diamonds,” left such an impression that Monil returned to Toronto eager to convince his mother that lab-grown diamonds were the next big opportunity. However, traditional beliefs were hard to bend as his idea was quickly rejected. It would be a while yet before anyone would consider welcoming lab-grown as a potential disruptor in the industry. However, as time passed and as frequent requests for lab-grown diamonds started to pour in, it was clear there was a gap in the marketplace that needed to be filled.
Today, Monil is the proud founder of Valour Lab-Grown Diamonds. Not only is business expanding through word of mouth and a strong online presence but major jewellery accounts on social media are driving the demand for this affordable alternative, pushing people through Monil’s doors. What’s driving the demand? Clearly, the showcasing of larger diamond rings and jewellery has been inherently spoiling expectations and pushing the consumer to seek “bigger diamonds”.
Monil’s finger is on the pulse of what’s trending through social media (particularly Instagram) and he’s embracing new technology allowing for a unique customization experience, adding convenience to an increasingly demanding consumer. This access to convenience is driving today’s buyer expectations and their decision-making process. With the options of convenience and competitive cost being offered, Monil doesn’t see lab-grown diamonds going away any time soon. In fact, it is predicted that the lab-grown industry will be worth $15 billion by 2035. Needless to say, today he is met with a lot less resistance.
We sat down with Monil to gather his insight into this expanding part of the market. He was candid, articulate and knowledgeable well beyond his years. Clearly, the younger generation is pushing beyond the foundations of the past and paving a brave new future.
WHY VALOUR
The lab-grown movement has quickly gained support from some influential names of our time. From celebrities like Leonardo DiCaprio to our own national icon Drake who recently received a lab-grown diamond-encrusted blazer from the Raptors, the perception of these alternatives is slowly changing.
Whether it be conflict diamonds mixed into the trade, the substantial collective carbon footprint of diamond mines around the world and the simple reality that diamonds are not as rare as they are marketed to be, the natural diamond industry has been faced with many avenues of conflict in the past decade. This led me to choose the name Valour. Valour is a military term defined as STRENGTH in the face of conflict. Aligning with my vision and values, I thought this was the perfect name for a brand that could potentially make a positive and combative footprint in the diamond industry.
The reason behind why large online stores like Brilliant Earth are doing so well is due to their transparency. They’re letting everyone know where their diamonds are coming from. Initially, we were thinking about an eco-friendly, sustainable approach in our branding when we first moved into the marketplace. After gaining feedback from our retailers, we understood why the majority of consumers are truly buying lab-grown diamonds. It’s primarily because they simply want a bigger diamond. That’s why our tagline is now “Grow Your Love”. Grow Your Love embraces the notion that you’re able to gift a larger diamond without having to empty your wallet.
Customers are walking into retail stores with images of jewellery designs that they’ve loved on Instagram, giving retailers an opportunity to embrace a new generation of consumers ready to spend on what they want. If retailers are ready to adapt to the new social-economic voice there is huge potential there. Secondly, when customers are coming into your space they already have their budget in mind. Retailers must adjust to the idea that a Valour Lab Grown Diamond could be the alternative in order to satisfy their clients’ needs.
The “value of natural diamonds” has not penetrated the Millennial/Generation Z mindset. Though they still want a quality product, they are smart shoppers and are online comparing and evaluating their options. Shoppers now have an open playing field of shopping. That’s what is being highlighted on social media as well. Consumers are looking to simply to get a beautiful piece of jewellery and focusing on getting the most bang for their buck.
THE INSTAGRAM EFFECT
The search for the perfect engagement ring has become a “team effort”. One partner bombarding the other with ring designs and styles of what they’ve come across over the years. The couple understands that since they’re going to be spending on these rings, they want to get it right the first time. So in that sense, social media has really come into play as a source of inspiration and as a trendsetter. In particular, Instagram has transformed itself into our industry’s biggest salesman bringing a new generation of customers with non-traditional shopping habits, tastes and diamond needs.
Our world’s continued obsession with customization has also contributed to the gravitation towards lab-grown diamonds. We can go to Chipotle and create our perfect burritos from the type of tortilla we want all the way to an extra drop of hot sauce. We get exactly what we want. The same has been highlighted in the team effort of purchasing an engagement ring. It allows the consumer to replicate what their partner has sent them on Instagram. This is where Valour Lab Grown Diamonds are brought up in the conversation. If your partner has sent you an image of a beautiful two-carat oval diamond ring, the last thing you want to hear is “no, unfortunately, your budget is too low for that”. Instead of increasing your budget, you can now select a two-carat oval-shaped Valour Lab Grown diamond, fitting your partner’s preferences and spending 40-50% less than the natural comparison.
There are two main resistance points with retailers. First, they’ve already invested in natural diamonds. All retailers have a significant amount of natural diamonds either in their vaults or in showcases. Obviously, once you’ve invested, you have to sell it; but as lab-grown diamonds come into play and it’s in the showcases at the stores, retailers fear is that they’re going to lose natural diamond sales because of these other options.
The reality is, the majority of consumers are now researching online prior to visiting your store. They’re knowledgeable and prepared. If you don’t have options at your store, there are definitely plenty of options online and you never know when you’re going to be losing out on a sale. So I always say, it’s better to compete with yourself than with someone else.
The second is value. Many retailers have been skeptical about what’s going to happen with the value of lab-grown diamonds. The answer to this question is still unknown but at the same time, we don’t know what’s going to happen to the value of natural diamonds either. What’s been exposed in the industry, online and in news articles, is that there’s about a quadrillion tons of diamond rough hidden beneath the earth’s surface and if mining companies are mining and cutting on a daily basis, natural diamonds will always be in abundance.
As we progress into the future, the traditional mindset consumers have that “diamonds are rare,” will slowly evaporate and they’ll gravitate towards what they see online and on social media, merely focusing on the beauty of the diamond. We all buy luxury cars knowing that the value of these huge purchases drops by around 50-60% over a five-year span. Essentially diamonds are in a similar position, both natural and lab-grown. As the next generation decides, I believe the decision will be based on beauty more so than the monetary value.
At Vandan Associates, we still offer both natural and lab-grown diamonds at affordable and competitive market prices. At the same time, I strongly encourage retailers to do the same and offer both options side by side. Let’s say you have 1-carat natural and you have a 1.50-carat Valour lab-grown diamond at the same price, offer both and let your client make the decision. Since consumers are more attuned to marketing tactics, the traditional “push” sales method is not working as well as it did in the past. In my opinion, a non-bias approach is always the best play when introducing an alternative, especially one that is so disruptive.
THE TRADITIONAL MINDSET
Traditionally, the mindset was for reselling. What if I want to resell this 20 years down the road? It is well-known that the natural diamond/lab-grown buyer is not getting anything even close to the value that they paid for. So that’s kind of the premise where, you know, you should not really be looking to sell your product as an investment tactic but rather based on the beauty of the purchase. When your client buys a high-end purse they base their purchase on the look and quality of the bag, not on the resale value. Now, what is valuable is the feeling of having a beautiful diamond without having to spend a fortune. Like valuing an Uber ride over a taxi when considering convenience, an AirBnB stays over a hotel when seeking availability, consumers will value Valour lab-grown diamonds over natural diamonds when seeking a bigger and more affordable option.
Another misconception is thinking that lab-grown diamonds are fake. Just because it’s grown in a lab, it should not be categorized as a fake diamond. Once people realize that lab-grown diamonds are visually and physically identical to diamonds mined from the earth- consumer minds start to change. For example, if you think about a test tube baby versus a baby born from natural conception, there is no difference between the children in the two fertilization methods, the only difference is the environment in which they were fertilized. Similarly, the only difference between Earth-Mined Diamonds and Valour Lab Grown Diamonds is their respective origins and how they were created.
SPEAK THE LANGUAGE
A Valour lab-grown diamond takes 30-40 days to grow inside a gas chamber. It’s mimicking what’s happening inside the Kimberlite Pipes naturally – the high heat and pressure. After this process is complete, the rough lab-grown diamond is taken to a cutting facility and cut and polished the same way as a natural diamond. By using those terms you’re showcasing to your clientele that there is a process that goes into this. Terminology such as lab-grown and lab-created is much more valuable from an informative and transparency standpoint.
In terms of other sales tips, there are many retailers that use a method where they’ve placed both options side by side and ask, “Which one do you think is natural, which one’s lab-grown?” At this point, customers will begin guessing and end up having no clue in differentiating between the two. This method starts a conversation between the consumer(s)/ partners on whether to consider this as an option. It’s a very interesting method with limited bias as the consumer begins to think for themselves.
CHOOSING A SUPPLIER
When looking for a supplier, I encourage retailers to focus on price, quality, and service. In our market today, the price is extremely important due to online competition. There are specific price points that need to be targeted when purchasing in order for you to make your margins, combat competition, and increase word of mouth for your business; and the same for natural diamonds, price and quality are very important.
Find a supplier that is able to send you options on “memo/consignment”. Let’s say as a retailer you have has a 1.20-carat oval diamond inquiry and you’re reaching out to your supplier. Are they giving you enough options for you to show to your clients? Let’s say they’re giving you three options in that 1.20-carat range in different colours and clarities. Having that flexibility with your supplier is very important. The method of offering multiple options is very common when dealing with natural diamonds, so why should customers feel limited when it comes to lab-grown?
Last but not least is quality. Having lab-grown diamonds that meet the appropriate 4Cs of buying a diamond – cut, colour, clarity, and carat weight – is paramount. For instance, our company uses reputable laboratories such as GIA and Gemscan for our natural diamonds and the New York-based IGI for our laboratory-grown diamonds. Although we’re using IGI, we’re still making sure that our merchandise is accurately graded. The last thing we would want is a client to do is buy a diamond graded as an SI1 based on the report, but later find out that it has a prominent black carbon on the center of the table!
Going into the future I see this time as an exciting opportunity for the industry. There will always be change, even more so now with technology constantly improving. The future of our industry is unknown, but it is very important to embrace change in your business, as consumer behaviour and buying patterns will constantly be shifting.
