Professional Jeweler Archive: Loose Diamonds at Retail: Is the Party Over?

March 2004

Editorial


Loose Diamonds at Retail: Is the Party Over?


Will retail jewelers ever again sell loose diamonds with the success they once did? Because of daunting competition from Web sites, even superbly run jewelry stores are feeling the heat. Many consumers believe the best-run Web sites will match or outdo the “added value” benefits formerly available only in-store. In fact, many factors that once argued against on-line shopping just aren’t an issue any more. For example:
  • Do you think you have the most educated sales associates in the nation? Buyers often say Web sites are just as good – or better.
  • Have you trained your staff to offer superb service? That still works with some consumers, but those who are used to self-service prefer to buy online. They like the ability to relax and think things over without a human salesperson hovering.
  • Do you emphasize your local ties and professional judgment? That’s great, but many buyers aren’t as scared as they used to be to shop online because of money-back guarantees and credit card protection. As for judgment, many online buyers now add a trip to an independent appraiser to their purchase process as added assurance.

I say these things not to discourage you, but to express reality as explained to me by two New York City diamond dealers who specialize in hearts-and-arrows Ideal-cut diamonds. These dealers – Laurent Landau and Stuart Skolnik of LC International – are trying to help independent jewelers fight back (see our April issue for details). They’ve created an array of tools to keep customers buying, but they say the tide is turning – at least where generic loose diamonds are concerned. I attended a press conference for the Couture Collection’s fall Diamond Leadership Conference within a day of my conversation at LC International. The conference resulted from worries by the group’s high-end retail members primarily about – you guessed it – online competition.

What’s a jeweler to do? For starters, there will always be customers who prefer to talk face-to-face with a person in a branded, trusted store. You should continue attracting, cultivating and keeping these folks loyal. But even your best customers eventually may find themselves unable to resist the siren song of the Internet for a loose diamond purchase. So plan for it. It’s probably a good idea anyway, because shortages of better loose diamonds are coming for all but the most privileged, connected retailers.

Now that the goose that laid the golden egg has flown the coop, what can you turn to? How about everything else you’re uniquely qualified to sell? Broaden your selection of expensive mountings. When customers walk in with Internet diamonds, encourage them to buy a gorgeous platinum designer setting. Take advantage of the fashion world’s embrace of color to get more aggressive about selling colored gemstones. What about gold? The styles haven’t been this creative in years.

Also in this issue, we feature a series of articles about men’s jewelry and gifts – an undermarketed category that also happens to celebrate innovations such as high-tech titanium, tungsten carbide and other non-traditional metals. There’s even a story about a whole new category in jewelry stores: fine pocket knives decorated with precious metals and gems that jewelers say are selling well to men and women.

Maybe it’s time to stop chasing the prettiest girl in class – one who may be out of your reach now. I’m not saying you should stop selling loose diamonds – just start noticing the vast array of other merchandise available to you and your customers.

– Peggy Jo Donahue

Copyright © 2004 by Bond Communications