Episode 86: 2023 Predictions

The Jewelry District

You’ll hear JCK editor-in-chief Victoria Gomelsky and news director Rob Bates look ahead into 2023. The hosts, noting that it's folly to predict more than one year ahead, make some educated predictions for the year including: the end of the pandemic, which might bring an end to some new customs while others continue to be new norms; a shakedown in the lab-grown sphere resulting in many leaving the space as prices fall below profitable levels; growing demands for transparency of sustainability claims, including both consumer demand and legislative standards; and an increased presence of AI in the different aspects of the jewelry business.

Sponsored by De Beers: institute.debeers.com

Show Notes

02:45 Looking ahead into 2023

07:30 Lab-grown diamond shakeout

10:20 New transparency laws

20:00 How AI is changing the industry

Episode Credits

Hosts: Rob Bates and Victoria Gomelsky

Producer and engineer: Natalie Chomet

Plugs: jckonline.com; @jckmagazine; institute.debeers.com

Show Recap

Looking Ahead (But Not Too Far)

The pace of change is so quick, and unexpected events—like the pandemic—make looking further than one year into the future a fool’s errand, so Rob and Victoria focus on the year at hand. Victoria found a list of predictions for 2023, one of which these is the end of the pandemic, which experts estimate will happen sometime in 2023.

Some trends brought on by the pandemic are likely to remain—such as how it pushed businesses to take a digital-first approach—but others—like masks and distancing—may fade away. Jewelry companies seem much healthier now. They have a reserve of cash and goodwill, better consumer data, etc. Despite global economic factors like inflation, there is optimism.

Lab-Grown Diamond Showdown

Rob predicts that there will be a shakeout in the lab-grown diamond sector this year. Prices are falling, and not everyone can make the business profitable that way. Days of large margins are petering out, though demand is still strong. Rob foresees that lot of people will leave this market. The natural diamond industry is also dealing with challenges, falling prices. Lab prices are falling because they too are priced based on Rapaport, so when natural diamond prices fall, lab-grown prices follow suit. It has become a race to the bottom, and the rapid growth in this category is about to experience some upheaval.

Demands for Transparency in Sustainability Claims

Greenwashing was put to the test in 2022. People want proof you’re doing what you say. This will continue in 2023. Victoria spoke to a few researchers in this field. One was a Harvard student with a focus on sustainability science. She spent time and research poking holes in those sustainability claims different companies make. JCK published a story on how to create a sustainability report last year. This kind of transparency of reporting will soon become law. It has passed in the EU already. This will apply for public as well as private companies. These laws apply to larger companies that do business in Europe too.

For a long time, the wide world of luxury brands got away with being very opaque. There was a mystique around how they did business. Gen Z will ensure that words and trust are not enough. We have more transparent pricing on the internet now, and consumers will demand the same transparency across marketplaces.

Victoria describes going to a high end retailer, Just One Eye. It has cache, and it is a real feather in a designer’s cap to be stocked there, as they are known for their expert curation. One thing that bothered her was that there were no details about any of the goods. No designer, price, materials, etc. If you don’t offer that information, consumers may simply move onto the next. She mentions Paul Schneider, co-owner of Twist (and former podcast guest) who has a QR code by each of his pieces with detailed info.

Rob adds that the Federal Trade Commission will start revising their green guides this year. There will be governmental and consumer pressure to report these things, and a greater standardization of this information.

Felicitas Morhart, professor of Marketing at University of Lausanne, says there is an academic initiative that assesses sourcing and environmental impacts in detail. For a positive example of transparency, Victoria points to the Breitling sustainability report which went above and beyond with detail. Rob talks about a corporate law that requires companies to report on who their owners are to banks. Now that this information will be available on request is a big change, which fits into this larger theme.

AI and the Future of the Industry

Victoria talks about the Lensa AI app on Instagram that takes your pictures and creates AI-generated images of you. She has read articles, book reviews, and more, all written by AI. We’re interacting with it in ways seen and unseen. Algorithms power our Netflix choices, chatbots talk to us on websites, for example.

Victoria predicts it will become a bigger conversation in the jewelry industry—what it means for how we design, source, and distribute. AI is already being used in larger companies to fine tune production, to refine their distribution. AI can generate prototypes so much faster than before. We may start to see companies hiring for these specialized skillsets. Victoria thinks that soon enough there will be less shame around using technology. The industry has prided itself on being a handcrafted old-school business, and we will start to see a shift where people take pride in using the latest technology.

Rob wrote a JCK Pro story on using AI in diamond grading. This is something big labs are experimenting with. Humans are very adaptable, but machines need to be programmed. It can spot an inconsistency but won’t necessarily know what to do with it. This could have huge implications on the traditional diamond pipeline. Diamond grading is a very specialized skill. Not all diamonds can be graded by machine—there aren’t necessarily always the reference diamonds available for this. But going forward, many diamonds may be graded by machines, which Rob finds both exciting and scary.

Resolutions

While Victoria wants to travel less, Rob resolves to travel more—both to the office and on family excursions. Overall, he hopes to see more people face-to-face. In conclusion: 2023, we are (kind of) ready for you!