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Wedding and diamond industries seeing ‘a big boom’ after pandemic slowdown: Brilliant Earth CEO

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Brilliant Earth CEO and Co-Founder Beth Gerstein sits down with Yahoo Finance Live to break down the busiest wedding season in almost 40 years while entering the late-pandemic, sustainable jewelry lines for men, and lab-grown diamonds.

Video Transcript

SEANA SMITH: Weddings are back in a big way with a record number of couples walking down the aisle this year. 2 and 1/2 million weddings are expected, the most we've seen since the '80s. That big boom means big business for the diamond industry. We want to welcome in Beth Gerstein, co-founder and CEO of Brilliant Earth. Beth, it's great to have you. Unfortunately, you're not on set with us here. But you were nice enough to send over a number of diamonds. Dave and I are both wearing some jewelry here on our wrists, on our fingers. So thank you so much for giving us the goods.

But Beth, first, just give us a sense of what demand has been like for your business. Because two things are going on. One, we've seen this boom in the number of weddings. A record number of weddings are expected this year. But people are also facing higher inflation, so higher prices in almost every aspect of their daily lives. So what does that mean for the diamond industry and the demand that you're seeing?

BETH GERSTEIN: We see a lot of puts and takes right now in the industry. I think you mentioned, obviously, there's more uncertainty. And what we talked about in our last earnings call is that consumers are taking a little bit longer just to make that more considered purchase. So it's extending some of those sales cycles. But we've also seen this record number of weddings. And people are really excited to celebrate with beautiful jewelry, like tennis necklaces and pearls. All of those are trending right now. And there's a big boom.

And what we found in the past is that with weddings, people go to weddings and then they tend to think about their own personal lives, and then they get engaged. So I think there's a lot of reason to be optimistic, regardless of what the economic environment has in store for us.

DAVE BRIGGS: Beth, another trend you're seeing is fine men's jewelry is becoming more popular. So I thought I'd get-- thank you for getting me decked out, the most jewelry that's ever been on this man. What types of fine jewelry are men wearing? And is it a certain demographic, a certain age?

BETH GERSTEIN: We are so excited about this new trend. And we just released our first men's jewelry collection and have seen really great response. What we're finding for men is they also want to be able to express their own individuality. We see engravables really popular. We see black onyx really popular. Also just really classic bracelets that men are going to be able to wear, cable chains. All of these, I think, have a new trend life. And more and more men, I think, we're going to see in jewelry. They're going to be able to celebrate just the same way that we all do.

RACHELLE AKUFFO: So, Beth, we've seen a lot of retailers really not get it quite right when it comes to what consumers want right now versus, say, six months or a year ago or pre-pandemic. How are you adapting to sort of the changing consumer needs? And what are people's priorities when it comes to their jewelry shopping right now?

BETH GERSTEIN: I think that it's really important to continue to look at the data. We're a very data driven organization. And we use our customer insights to be able to introduce product very quickly. So within three or four months, if we see a new trend, we're able to launch a new collection. We're able to understand what customers are looking for, whether it's elongated shapes like ovals or emeralds, whether it's yellow gold, and then really build an assortment that's trend forward for that customer.

We see right now customers really want jewelry with meaning, with significance. So we have this really beautiful Zodiac medallion collection. And that's been performing really well. So I think it's about responding to the customer and understanding what they're looking for. Sustainability is at our core. And so everything that we do has a mission behind it, and just continuing to reinforce that to the customer. We have a really great Fairmind jewelry collection, where these products give back and they're sourced responsibly. And that really resonates with the younger millennial and Gen Z consumers as well.

SEANA SMITH: Beth, you sell natural diamonds. You also sell lab-grown diamonds. What's the price difference between those? And what's the interest like in those lab-grown diamonds? Because I don't think a lot of people know much about them.

BETH GERSTEIN: Yeah, lab-grown diamonds, we've actually had them since 2012, so for quite a while. These are diamonds that are actually manufactured in the lab. And a lot of our customers respond very well to them because they're mining-free, so they have a sustainable component to them. They're also unique. They're beautiful. They're affordable. And price differential can be about 30% or more. And customers, I think, respond really well to that, given that the products are virtually identical to the naked eye.

DAVE BRIGGS: What's the disadvantage to buying lab-grown?

BETH GERSTEIN: Well, I think some customers really respond well to the romanticism of natural diamonds, the history that they were born from the Earth over billions of years. And it's just a very personal decision. Buying diamonds is emotional. And people, I think, feel strongly one way or another. And certainly, our position is that we want to cater to whatever customers are looking for now and provide a variety of different options.

SEANA SMITH: Beth--

RACHELLE AKUFFO: And I want to ask you because we've seen, obviously, commodity prices spiking. It can be harder to store some of these materials. How difficult has it been for your company to sort of adapt to this? And how has that translated into prices?

BETH GERSTEIN: Well, the benefit of our model is we're very asset light. So we make to order. We have virtual diamond inventory. And that means that as prices are fluctuating, we don't have to invest a lot of capital, especially at the height of the market. We also have this very well designed pricing optimization engine. And so we're constantly optimizing our prices to be able to make sure that we're optimizing for demand and margin at a high level.

I think that it starts with your brand. And it's important that you're able to provide a really compelling product and experience for the customer. And as your costs are changing, that you are reacting accordingly. But so far, we've been able to maintain very strong margins and expect to be able to do that going forward.

SEANA SMITH: Beth Gerstein, thank you so much for joining us. And also Dave is over here, off camera, grabbing as many rings as he can to put them on his hands during that.

DAVE BRIGGS: I'm like Costanza. I want to be a hand model for you guys.

SEANA SMITH: I know. You just can't help yourself. You've been eyeing the whole thing as Beth's been talking. But Beth, thanks so much for taking the time to join us.