Luxury Briefing: How Vrai plans to become the Tiffany & Co. of lab-grown diamonds

November 7, 2024 Mary

This week, a spotlight on the lab-grown diamond market leader ambitions and corresponding strategies of jewelry brand Vrai.

Ten years ago, Vrai launched as a digitally native fine jewelry brand focused on controversial lab-grown diamonds. Now, with new ownership, nine global stores, A-list partners and a sold-on-the-concept consumer audience, Vrai is targeting “legacy luxury maison” status.

“There is no leader in the sustainably created diamond space,” said Mona Akhavi, president of Vrai. “Our goal is to take the leadership position, in the same way that Tiffany & Co. and Cartier are leaders in their space.”

“The [market] momentum is great,” she added.

Indeed, lab-grown diamonds have become widely accepted, and celebrated, gemstone options. That’s largely thanks to their retailers’ education-focused marketing, spotlighting their equivalence to mined diamonds and sustainable production, as well as their comparable affordability. Akhavi called out an Edahn Golan stat showing that 50% of diamonds sold in the U.S. last year were lab-grown.

However, the crowding in the market is a threat, potentially leading to lowered prices and popularity.

For its part, Vrai is increasingly moving offline to further elevate its positioning in the market. The stores it’s opened are in “art and culture communities,” including Melrose Place in L.A., the Meatpacking District in NYC and Newbury Street in Boston. Internationally, it has four stores, including in London’s Mayfair neighborhood and Madrid’s Calle Serrano. The plan is to open more stores within the next year, with Miami, Austin and Washington, D.C. among the cities the company is eyeing.

Physical retail has proven a smart investment for Vrai, which is growing and profitable. The average weight of a lab-grown diamond sold in a Vrai store is 4 carats, compared to 2.5 carats for its stones sold online, Akhavi said. And, since opening its first store in 2021, physical retail sales have come to make up 50% of Vrai’s business. “It’s a major driver of our business growth,” she said.

“For the first few years, the [in-store] conversation was mostly around education about [lab-grown] diamonds’ quality and production,” Akhavi said. “But it’s completely changed. Now, it’s about [the diamonds’] size, shape and look, and the [consumer’s] budget — a conversation similar to what you would have in a legacy luxury maison.”

Vrai’s stores were designed to feel like an art gallery, with display cases affixed to the walls. As their centerpiece, they feature a “diamond bar” housing its 30 diamond shapes. They also offer a Cut For You service, allowing customers to choose their rough diamond before it’s cut. Rather than cubic zirconia samples, which are commonly found in jewelry showrooms, the stores feature the diamonds they sell.

“We’re taking the customization and bespoke concepts to the next level,” Akhavi said. “It’s like going to Chanel to get a dress — it’s a haute couture diamond.”

According to Akhavi, Vrai’s differentiator in the growing market is that it’s vertically integrated, doing everything in-house from growing diamonds to creating jewelry pieces. What’s more, its processes are carbon-neutral, produced in a zero-emissions foundry in the U.S.

Since 2016, Vrai has been the lone consumer brand under parent company Diamond Foundry, which counts investors including Leonardo DiCaprio, Twitter co-founder Evan Williams and Zynga founder Mark Pincus, among others. Diamond Foundry specializes in sustainably growing diamonds for various technology applications. Its last round of funding — in 2020, from Fidelity — was $200 million, valuing the company at $1.8 billion.

In the past seven years, legacy jewelers including Blue Nile and Helzberg Diamonds have entered the lab-grown diamond market. DeBeers, too, sought out growth in the category, though its efforts were short-lived — it launched the lab-grown diamond-focused Lightbox Jewelry line in 2018 before dissolving the business this summer. In addition, young direct-to-consumer brands like Mejuri have embraced lab-grown diamonds, and several brands built on lab-grown diamonds have entered the market. Among them: Dorsey and Brilliant Earth.

Akhavi owed the lab-grown market’s growth to both new diamond shoppers — due to fewer cost barriers and less ethical stigma — and regular diamond shoppers who are now buying more.

“Everyone wants a tennis bracelet now,” she said.

For its part, Vrai’s customers widely vary in age, with those under 35 often buying their first Vrai diamond piece through price-based gift guides featuring “under $500” and “under $1,000” styles, for example. Self-purchasers are typically over 35, with many returning for another jewelry style after receiving a Vrai engagement ring.

Currently, Vrai’s best-selling styles are its diamond stud earrings and solitaire necklaces, followed by tennis bracelets. But Vrai is determined to not be just another tennis bracelet brand, going to great lengths to differentiate its styles.

Its bracelets are uniquely available with a mix of diamond shapes and customizable diamond sizes, for example. And, in the summer of 2023, it began introducing a “V” motif to many pieces — diamonds propped up in V-shaped settings are set to become a Vrai signature, Akhavi said. As of July, the company was working on a collection of Vrai “high jewelry,” centered on more identifiable pieces.

“We are trying to build a brand identity,” she said. “Instead of a customer buying diamond stud [earrings], we hope they’ll buy ‘V’ diamond studs.”

She added, “You can identify Tiffany and Cartier [jewelry] from miles away. Those guys have 100 years on us — we’re only five years old. But we have faith [we’ll get there].”

To build awareness, Vrai has invested in affiliate marketing, media buys and billboard ads. From here, the plan is to build on its strategic partnerships. So far, they’ve included a licensing agreement with Brides magazine and a product collaboration with Stella McCartney that was timed to the Met Gala — celebs including Ed Sheeran and Cara Delevingne wore the designs on the red carpet.

Other stars that have worn Vrai — thanks to their stylist, versus a paycheck — include Taylor Swift; Jennifer Lopez; Gwen Stafani, who wore a Vrai cross necklace for her wedding to Blake Shelton; and Reese Witherspoon, who was recently featured on the cover of People magazine wearing a “V” style.