Fighting Internet Diamond Dominance
High-end jewelers will brainstorm how to combat the Web's low diamond prices at a new fall conference
Consumers are buying an increasing number of big loose diamonds on the Internet. In fact, some diamond suppliers are selling directly to Web-browsing consumers. As a result, retailers are losing a big profit source because they cant compete with rock-bottom online diamond prices. These factors prompted some of the highest-end jewelers in the country to clamor for a retail diamond conference to figure out what to do.
That resulted in the Couture Diamond Leadership Conference, to be held Oct. 13-14 in New York City. Sponsored by Couture Jewellery Collection & Conference, which takes place each spring in Phoenix, AZ, the new fall conference will focus on giving high-end jewelers strategies to fight their growing frustration with diamond sales.
Among the sponsors for the fall diamond conference will be lead sponsor Hearts on Fire, as well as the A. Jaffe Signature Collection, Daniel K., Diamond Promotion Service, Diaco, the Gemological Institute of America, Hasenfeld-Stein, Julius Klein, Lazare Kaplan, Philippe Diamond and Werdiger.
The conference also will address changing diamond distribution channels, the erosion of a relationship-based industry, branded diamonds, synthetic and treated diamonds, and certification. These issues were articulated at a panel announcing the new event during the JA show in New York in January. Speakers on the panel were Russell Cohen, chairman and co-CEO of Carlyle Jewelers, Greensboro, NC; Jim Rosenheim, owner and CEO of Tiny Jewel Box, Washington, DC; Charles D. Lein, president and COO of Stuller Inc., Lafayette, LA; Sean Cohen of Codiam/Rand, New York City; and Anna Martin, senior vice president and regional manager, International Diamond and Jewelry Group, ABN AMRO Bank.
Despite other issues, the Internet remained the main topic of discussion among panel members. Retailers Rosenheim and Cohen said price is still the main motivation for most loose diamonds buyers. As a result, retailers have had to cut margins drastically to compete with the online prices.
Rosenheim suggested retailers should band together to market distinctive branded diamonds, which would provide opportunities for exclusivity. Cohen said only time will tell how many such brands are supportable. Diamond supplier Sean Cohen and Russell Cohen said success will remain with retailers who offer exceptional service and have connections to key suppliers.
After industry panelists finished, guest speaker Steve Forbes, president and CEO of Forbes and editor-in-chief of Forbes, said diamantaires can stop commoditization by differentiating their products. He said jewelers must work to transform diamond purchases into emotional acts. Citing Starbucks and General Motors, Forbes said each in its time taught consumers to think of their commodities as differentiated products worth paying more for. Consumers became emotionally invested in coffee and cars, he said, and they can do the same with diamonds.
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Competing With Online Sellers
Check out these tools and tips for independents
Stuart Skolnik and Laurent Landau of LC International, New York City, specialize in selling Ideal-cut diamonds featuring the coveted hearts-and-arrows pattern to independent jewelers. Theyre also working overtime to help their clients wrestle with the most daunting competitor theyve ever had.
LC Internationals services include an online diamond inventory retail clients can download to their Web sites and simple, thorough educational information. They also have point-of-sales tools, such as portable viewers for diamonds with the hearts-and-arrows effect that jewelers can buy to give away with a diamond purchase. Diamonds come with the American Gem Society Labs Diamond Quality Documents and the AGS certificate number laser-inscribed on the girdle.
LCs efforts are working for many retailers, but Skolnik and Landau say theres more jewelers can do to compete:
Sell Settings. Because substantial diamond profits may never return thanks to unbeatable Internet prices, make your profits selling settings. So far, online sites havent been able to stock many of the high-end branded designer settings consumers often covet, giving you an advantage.
Just Do It. Dont take out your frustration on consumers. Instead of refusing to set a diamond purchased online, welcome the opportunity to make a lifetime customer.
Sell Service. Refocus your bridal business on services, such as acting as romance counselors to nervous grooms. No Web site can replace a kind face behind the counter offering suggestions on how to propose and referrals to local restaurants, flower shops and candy purveyors. These services can earn you repeat business.
Train Em All. Consumers often complain jewelry store personnel dont have the knowledge they find routinely on Web sites. If you dont have the resources to train, go to the good Web sites and ensure your sales associates know at least that much though knowing more would be better.
Get Online. Have access to a wide choice of diamonds from your suppliers so potential customers know youll have a selection for them. Ideally, your stores Web site should be easy to find, well-stocked and so compelling you attract customers to buy from you online or visit your store.
Give Options. Buyers want the kinds of options they find routinely online, such as simple return policies and referrals to independent appraisers.
- The Couture Diamond Leadership Conference, New York City; (646) 654-4950.
by Peggy Jo Donahue
|Panelists at the Couture Diamond Leadership Conference (from left) are Chuck Lein, Jim Rosenheim, Anna Martin, Sean Cohen and Russell Cohen. The panelists announced the fall program to help high-end jewelers fight consumer flight to low-cost diamonds on the Web.