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​2020 Loose Round Diamond Sales

Analyzing more than $3Billion of annual jewelry sales takes a good deal of time, not to mention a good deal of space. Questions about what to analyze and how to present the data in a meaningful way had us working through many scenarios. For example, the spreadsheet for just Loose Round Diamonds was more than 56,000 rows, which represented individual records for round diamonds whether sold, in-stock, natural or lab-grown. Aggregating all that information would be too much to put into a single article so we began segmenting the data. Below we will analyze more than 22,500 round, natural diamond sales from 2020.  

The purpose of this article is for you to compare your own sales results with this data; how you are currently merchandising your diamond department and to consider how your inventory aligns with consumer’s shopping behavior.

Quite a lot has been written, and reprinted, about the average selling prices of diamonds and engagement rings. For example, consumers are reportedly spending approximately $5,500 to $5,900, on average, for their engagement rings (which changes somewhat year to year). The issue with these surveys is that they are just that – surveys. They are not facts based on transaction prices but rather responses from survey participants. Relying on consumer surveys may not be useful when merchandising your own businesses and relying on averages of a lot of data, as you will see, is less useful still. 

2020 Loose RBC Natural Diamond Sales

We are analyzing retail sales data from over 700 doors throughout the United States & Canada. Our data comes from actual purchases of more than 22,500 round diamonds, which represents more than $200 Million in actual transaction prices, not what price was on the tag, on appraisals or in a consumer survey. We break these 22,500 diamonds into some of the price-point ranges that we use in our merchandising system, Balance to Buy™. These price points start at $800-$1000 and go up to $50,000+. As with all arbitrary price-point buckets, they will tell the story to the extent the data permits, with some added interpretations of those limits.  

Figure 1

© 2021 BIG. www.balancetobuy.com

These results are presented in descending order by retail selling prices. The second column shows the exact number of diamonds sold in each of the price-points. Within our database, there were 22,582 diamonds sold in 2020 for a total of $200,676,746, with an average selling price of $8,887.

Point #1: The Average Selling Price of actual diamond sales is far higher than the $5,500-$5,900 referred to in consumer surveys. An average of $8,887 is more than 1.60x the survey result.  

This is the fundamental reason we do not rely on mere averages to tell us how to merchandise our stores. Proper merchandising takes into consideration all retail price-points. 

Please pay close attention to the Quantity column in Figure 2 and you will see that Loose Round Diamonds are sold across all price-points. I was very deliberate to start this analysis at the $800-$1000 price-point, excluding the data below those prices, which would be very small diamonds used in repairs, for example, but that we still capture in our database. I considered starting at $1000-$1500, but I wanted to make this point – we can do whatever we wish when reporting on this amount of data and I thought it was important for you to consider whether the analysis you read elsewhere are complete, accurate or even useful when comparing to your own company’s data.  

Figure 2

Point #2: More diamonds, by units, are sold between $5000-$7500. However, the highest performing by dollars is the $10,000-$15,000.

Analyzing a Price Ladder

The price ladder is made up of all the price points, usually shown with the highest prices at the top, thus creating this “V” shape, or what we call a Price Ladder. These price points, as well as 7 more below the $800-$1000 are what we use when doing our merchandising analysis in Balance to Buy™.  

Let’s acknowledge the arbitrary nature of price-point breaks: Notice the two highlighted below in Figure 3, $2000-$2500 and $2500-$3000. Each of these only represents a $500 spread, whereas we could have easily gone with $2000-$3000 instead, as we did with the $3000-$4000, and $4000-$5000 price points. That said, if we were to use a $1,000 spread between $2000-$3000 then this price-range would represent 3,251 sold diamonds and would be second (in units) to the $5000-$7500 price-points. I encourage you to look at groupings of price-points, or wider price ranges, to make additional observations and compare these results with your own store’s sales. 

Point #3: Customers buy diamonds at all retail price points.  

Figure 3

Remember what we are looking at. These 22,582 units are only round, loose diamonds that were sold in the stores in our database during 2020. There are no lab-grown, no mounted bridal and no fancy shapes in the data. This $200 Million in retail sales represents less than 7% of the total amount of sales we capture. When we add complete bridal rings to the data, these quantities and average numbers are going to change. My sense is that while the units will increase, the retail prices may skew lower. When you are analyzing your own business, it will be important to be able to break out each segment of your business as we are doing here. Analyzing your entire bridal department, all loose diamonds, natural and lab-grown, all shapes, complete engagement rings, etc., will not get you to a place where you may understand how to merchandise these different segments. Therefore, analyzing them individually, by price-point is essential.

Figure 4 below adds the total sales break down by price-point, as a percent of the total. Both $10,000-$15,000 and $5,000-$7,500 generate roughly the same total sales, in the vicinity of $30 Million. Another way for you to be analyzing your diamond sales is by units as well as by dollars. Why? Because when you merchandise your Loose Diamond categories, you will want to have a clear understanding of where your customers are likely to be shopping and how you will allocate your resources throughout your assortments.  

Figure 4 

In Figure 5 we show the results of a single store whose average retail selling price for round loose diamonds over the past 12 months was just under $6,000. This is the perfect example of why you should ignore averages. Notice that I chose to include all loose round diamonds from this store and not start at $800-$1000 as I did in all the BIG Data reports above. That information is in the next example, Figure 6.

Note: Since this is live data from a single store, I removed cost of goods and gross profit. I reviewed this with the owner of this store (receiving permission to print it) and yes, they are adding more diamonds in the $10,000-$15,000 price points.

Figure 5

By removing the lowest price-points, likely melee, this store’s average ticket magically increased by nearly $1,000. This, of course, is misleading. Please note the consistency of how many diamonds are sold by price-point. This is truly representative regarding how customers buy across all price points. 

Figure 6

Conclusion: Our BIG Data represents actual consumer purchases from every corner of the United States. It is also representative of most retail environments, from highly branded stores to stores that carry few, if any brands. Where retailers in our database may sell diamonds online, these sales were included, but we do not work with strictly online retailers. Nor are there any department stores or large chains represented. There are credit jewelers, independent retailers located in malls, many free-standing high-end stores and single store mom & pop retailers.  

I did not attempt to create trend analysis reports – which would compare two or three years to see how consumers preferences may have changed over time. The reason is, similar to the consumer surveys referenced in the beginning of this article, the conclusions of these trends will not show the entire story. For example, those retailers whom we work with may have introduced modest priced diamonds to their mix and as a result, are now selling more entry level and modest price points. It would be misleading to conclude that consumer behavior had changed, where it was the retailer’s awareness of their market and merchandising behavior that changed.   

You may have noticed that we left out diamond attributes in this article. We have this information, of course, and could have created tables that show diamond weights, colors, clarities, or brands. This article was specifically addressing how much consumers are spending throughout the price-ladder and to offer insights into what is taking place across all markets, and likely taking place in your market. We did this to help you consider those sales that you are currently not getting, whether at the low end of the price ladder or the higher end, and to plan your loose diamond department accordingly. 

​©BIG 2021  

I hope that you found this information as interesting and useful as we have and as always, we look forward to your questions and comments.

Abe Sherman, Buyers Intelligence Group