On-Line Diamond Interview
I recently received an e-mail from a journalism student looking to do an article on jewelry sales online. Laura had some great questions that are well worth posting. So with Laura's permission, here is her original e-mail and my answers.
Dear David,
I am a senior journalism student at California State University, Northridge, and I am currently working on an article (for grade not for print) about the boom of online sales of engagement rings. I was wondering if I would be able to ask you a few questions on the topic? I would like to include your views in my article.
Below are the questions I would like to ask you if you would like to help me out.
1. In my research I discovered that independent jewelry shops rely heavily on the sale of engagement rings as their main source of revenue. What has been the effect on independent jewelry shops since Blue Nile, and others, have opened online websites where people can purchase engagement rings that are less expensive but are the same cut, carat, color etc?
Independents have certainly lost sales to online diamond retailers, however online diamonds sales, while growing, still represent a relatively small part of the growing engagement ring market in the US. And while it may appear that online retailers are offering the same ring for less – they often are not. Diamonds are not the commodity that some would have people believe. By that I mean that two diamonds of similar cut, color, clarity and caret weight are not necessarily equally beautiful. I have looked at more engagement rings that where purchased online than I care to count and while as a general rule (there have been some frightening exceptions), when purchased from a reputable company customers are getting what they paid for - I have, however, yet to see a customer who got the best they could have for their money. The difference is always significant.
2. Has the popular rise of online jewelry stores affected bigger chains like Tiffany, Zales etc?
I'm sure it has- but to what degree I cannot say. Most of the majors also have effective online stores to compliment their traditional operations – I would think it has been a benefit because their customers too have the best of both worlds at their disposal. This is also true of many independent operations as well.
3. What is the difference in mark up on an engagement ring that would sell in an independent store to one that would sell on Blue Nile?
Markups depend on many factors and are going to vary between different retailers. This is true both for online stores as well as independents. Since most online stores sell “al a carte” vs all inclusive - the way most independents do – the difference is can be insignificant to none at all when its all added up.
4. Buying an engagement ring is one of the most important purchases a man (or couple) will ever make. Apart from the price, why do you think some people are happy to buy, without seeing the actual ring they are purchasing, such an important (and expensive) item?
I have to say that this had perplexed me for quite a while. Having been in this business for 25 years I have to admit I never saw it coming. You have to understand that I have never, nor do I know any jeweler who has ever brought any diamond without first looking at it!
That said I think there are several reasons.
• Most important is that many people have brought into the premise that a diamond is a commodity and diamonds of similar grading are of equal beauty and value. There is also the perception that an independent laboratory report, or “cert”, especially from the GIA, is a guarantee of that beauty and value. This is a fundamental misunderstanding of both the grading systems purpose and the limitations of and the reason for an independent grading report. However misguided - these perceptions are what make online diamond sales possible.
• For years the industry has been plagued with jewelry retailers selling by using misleading tactics and false discounting, which has confused the customer and eroded the faith and confidence of the public in the value of diamonds. Throw in uneducated and bad behavior by sales associates, poor service, shoddy jewelry and the list goes on, it is no wonder that jewelers are no longer perceived, and in many cases for good reason, as professionals that can be trusted.
• Control – I think the internet gives the buyer a feeling of being in control of the situation, instead of having to rely on someone else. There is also a level of comfort in making your decision based on angles, percentages, numbers and letters. It takes the subjectivity out of the equation and makes it like purchasing a car – compare the stats, compare the price. It is the worst possible way to buy a diamond – but I can understand it.
5. Do you think that buying an engagement ring online takes a bit of the romance out of the whole process?
Absolutely! Just like every woman is an individual – every diamond is an individual. Believe it or not diamonds will “talk to you”. I can look at hundreds of wonderfully beautiful diamonds and a few will stand out to me and talk. This is nothing you can quantify or put on a chart – it is all about individual beauty.
For someone to take time, to look at and compare diamonds, searching for that perfect one – that to me, is the ultimate expression of love.
6. Do sales associates at retailers, in particular, Tiffany, earn any commission on engagement ring sales? The men I have interviewed say that they opted to buy an engagement ring online after having a negative experience with a sales associate - the name Tiffany popped up numerous times.
It depends on the retailer – some associates are on commission and some are not. I do not know about Tiffany’s – but it is not the first time I have heard the complaint.
As I said earlier – bad behavior on the part of sales associates is a problem; I‘m not sure that being on commission is the only cause.
When shopping for an engagement ring you are really shopping for a jeweler as much as a ring. If you are faced with a negative experience I always recommend you keep shopping – there are many excellent jewelers out there who will make the buying experience exceptional. It may take some work - but the right jeweler will transform the process into what it should be – a wonderful enjoyable experience with results that will exceed your expectations. You can’t get that online.
7. Is the increase of online sales of engagement rings only in America or is this trend occurring around the world?
I would guess it is, but I am only familiar with the US market.
8. What do you forecast for the future of the online engagement ring market?
I think it will continue to grow for a few more years at least – but I am already seeing some signs of a backlash as more and more people realize that while the internet (like everything) has its advantages - it also has some serious disadvantages when it comes to the purchase of fine jewelry – I deal with the fallout every day.
An engagement ring is not only a very major purchase – unlike any other- it also symbolizes a couples love and commitment, the best results always come with the help and guidance of a trained professional.
Thank you so much for taking the time out to answer my questions. I am very excited to write this article and will happily email you a copy when it is complete.
Thanks again,
Laura



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