Has PS and the Internet had a impact on the retail market?

[set2374]

I have been shopping for the perfect diamond (for my budget and priorities) for the past 2 months. I started off as a diamond novice and now, after 2 months on PS, still a diamond novice, but with enough information to know when seller is BSing me. My father and I were talking there other day and when he went to buy a ring for my mom, you just went into a few of the local jewelers and they told you what was good and what was frozen spit and you trusted them. You paid the price (after what you thought was negotiation) and you left satisfied. GIA was around, but that was never something the typical consumer thought about (this was back in 196. Today, we have PS, diamondtalk and many other sites that can absolutely innundate you with information and opinions. It''s fabulous. Where else can an average joe consumer like me have an opportunity to talk to experts who really really know their stuff. To be able to listen to John, David and Gary debate the virtues of optical symmetry is really fantastic and I appreciate the opportunity to read all of your thoughts and comments. That being said, has PS and other forums in conjunction with internet vendors made a significant impact in the way consumers in general approach their purchases. Has internet changed the diamond retail/wholesale business? For those B&M guys out there (e.g., Bob Pearlman), do you find that consumers today are more educated and informed on average than they were 15-20 years ago??? If there is an increase in consumer awareness, has this had an impact on the types of diamonds being sold and the standards to which cutters are holding themselves?? Just some random thoughts.

 

[lostdog]

It's had a big impact on a small (though important) part of the market (the ideal, near-ideal, or would-be ideal market). And a smaller effect on a larger part of the market.

People around here have quoted some numbers about the vast majority of purchases, where price and size may be the only two critera that ever register with the buyers, so PS's impact hasn't reached that far. Give it time.........

 

[JohnQuixote]

I'm going to vault from lostdog's trampoline here. Looking toward the future, here's why I feel the PS influence will continue to grow.

...We hear this from new registrants all the time: "I've been here looking around and this is amazingly helpful..." The thing that is so attractive about Pricescope is that the community's first interest is helping new consumers become better informed, and new consumers instantly sense that.

Our native 'prosumer' population thrives with a diverse range of tastes and standards, so there is 'someone' for 'everyone new.' The regulars all have an intrinsic desire to help and share, whether it's with newcomers or with their fellow regulars - and many of the former become the latter.

Specialists in related fields are able to gather and debate things in our 'niche' society, from Belgium to Houston to Oz and back. Do you realize how far down my block I have to go before I find someone I can argue about lower girdle facet percentages with? (and they're always out of sugar anyway).

Those with a business interest benefit from exposure and from consumer recommendations and testimonials. Another positive aspect is the ability for companies to interface directly with their markets - which can result in improved communications and a level of earned trust.

There is something positive for everyone.

The sum result is healthy discussion. Sure, there may be 'interesting' (or differing) advice in places, but the balance of valuable education and relevant discussion occurring here is overwhelming.

Will PS and the Internet have an impact?

This is the information age. Pricescope is bursting with information. You do the math.

 

[set2374]

Interesting thoughts John.

 

[Detox]

I am in a similar situation, I have researched and researched using pricescope and other sites mentioned here to ensure I am making an informed decision and getting the best value for my money. Do I think a website like this will impact the market, in my opinion not likely.

From my diamond shopping experience (which is finally almost coming to a close) I have releazed a few things.

1. People who choose to do the research, will. And there are not as many as you might think.
2. Many people will purchase blindly from someone if reffered. It makes them feel like they are getting the best deal.
3. Pricescopers represent a small number of the consumer population.

Spending time here has taught me a lot and provided me with confidence in my purhase. Being Canadian I do wish there was a little more information on GemScan as a cert lab because almost all of the diamonds for sale here are have a GemScan cert.

I will definetely spread the word to friends about this site. However, 8 times out of 10 they will go with what they feel more comfortable with..........................and that is not buying from the internet.

 

[petersong]

Yes. I agree. Only a small population though it will grow. One thing a lot of internet-education-and-shopping people, including me forget: time cost of education-yourself. See, one people''s hourly rate is about $60 per hour. If he spends total of 10 hours to search, educate, and research again, then think about cost. Well, I know my cost and I just cannot change my shopping habbit that is the fact that I want to learn something before shopping. I spend a lot time to sleep after 12PM to do this research, to do that comparison. Well, my wife, she knows nothing about the diamond and just keep her sleep every night

Also, some people get a lot of time to use this rebate and that rebate to get free this printer (I did get two free printers), that free stuff. While, recently I give up even I see free things because I do not have time to fill up these rebate form...

Think about shopping attitude and habbit and time cost..

 

[JohnQuixote]

Date: 7/15/2005 12:57:53 PM
Author: Detox

Do I think a website like this will impact the market, in my opinion not likely.

Ah, but it already has.

Martin Rapaport's State Of The Diamond Industry report, Leonid's Internet Marketing presentation and Kathy Ireland's keynote address at JCK all testified to the impact of consumers empowered with internet information. Rapaport suggested to B&M dealers that such consumer info sites are 'here to stay,' and they must adapt to the fact that customers will be coming into their stores armed with more and more education from the 'net.

Detox, perhaps you meant that not everyone will start buying on the 'net? I agree with you, although I think more people are comfortable purchasing on the 'net now than 5 years ago and this may continue to grow. However, the OP asked if PS and the internet has had an impact on the retail market in general. There is no doubt there has already been an impact, with more to come.

Every time a consumer arrives and discovers Sarins, the difference in grading labs, price comparisons, etc. and uses that knowledge in the retail market it has an impact.

 

[baltneu]

I guess the jury is out on this one. PS and other intenet sites like PS are very helpful to people who shop on the internet or use the internet for information. It is not clear to anyone what percent of buyers buy on the internet vs. Retail stores. There is another twist to it also; those people who use PS and then still go to Retail stores to buy rather than buy from PS vendors. I recently referred someone to PS, but he went and bought from Retail. So I think it is hard to measure accurately.

 

[MissAva]

Personally I think it will have a larger impact on my generation. I know a number of people who after havign theirs ears shweed by moi hit PS. They did feel a need or desire to post here but still were able to learn a lot. And not buying on the internet doesnt mean PS doesnt have an imapct. It helps younger/newere counsumers learn what the basics are and how much room there really is in the B&M prices. I have learned a ton about settings and what is best for those of us hard on our jewelry. I read things for almost two months prior to getting up the nerve to post. I think others come on get what they need a hit the market. Sometimes the impact is there but is not visable immediately.JMO of course.

 

[oldminer]

The Internet is having impact in nearly every part of the world and it is a growing database just full of knowledge for people who learn how to access it. Pricescope is important to us, but it is a tiny element in the large overall sea of change.

This is a great forum. There are several other forums around with potential, but they just may not be as successful. It takes a special mix and some good luck to carry it off. Pricescope has done it. This has been good for the particpants.

The increase in consumer knowledge is not always welcomed by everyone. There is plenty of worry and anger out there in traditional retail land. Some power is now in the hands of an elite group of consumers that used to be only in the hands of retailers. Most consumers are still just picking something and buying it. I thnk this will gradually change some, but I don''t see a time when the Internet will be the main source of jewelry or diamonds for consumers. The Internet will be the place to research value and possibly to buy specialty items, especially some branded ones.

The impact of knowledge is what brought us out of the dark ages, so I have great expectations.

 

[JohnQuixote]

Well shucks.

Dave said precisely what I was trying to in my last 2 posts, but did a better job of it.

 

[belle]

Date: 7/15/2005 2:09:24 PM
Author: JohnQuixote
Well shucks.

Dave said precisely what I was trying to in my last 2 posts, but did a better job of it.

now you know how i feel most of the time!

well said dave. i agree.

 

[oldminer]

John: I took the good ideas found in your postings and cooked up a more general paragraph or two. This is what makes a forum like this so much better than being in isolation. We would never have known each other. People would not have known about us. Now we are all connected and doing something which makes the knowledge relatively easier than every before to understand.

What is posted here is all pretty much available in books for researchers and scholars, but regular people could never learn about it so readily in past decades. Now, knowledge is accessible, free and put into digestible chunks.

The more knowledge is accessible, the more people will advance in their understanding of difficult subjects. When people attain a certain increased level of understanding, they then can better communicate about complex issues. No doubt about it, diamonds are one of those complex topics.

 

[valeria101]

I don't know if anyone can tell how much Pricescope did or did not - the sellers posting here could probably come up with a joint estimate of sales and someone could draw a map to see how far the chatter has reached on the groundamong buyers and what not. It would be harer to tell what do the 90% of PS browsers who never post and do not buy from PS sellers. If anything, perhaps this mysterious majority holds the answer.


However, two things may count for a wider analysis:

- for once, the means of showing diamonds online are getting allot better. I am not just cunting WF's improved site or the graceful but niche contribution of projects like Elmyr Services, but larger scale happenings: the imagery present on GemCal NAd AGS lab reports and GIA's cut grades (if they ever materialize) that are authoritative ways to convey the looks of these gems online. So the tradeoff between touching one stone in flesh and seeng 100 images online becomes harder to cut.
For now, there are no extended databases of diamonds with visual presentation, but the maker of the one I know became a siteholder (Stuller, that is)... Perhaps these few factoids can be put together to conclude that there will be allot more diamonds online and their presentation will make them a closer substitute to those on the ground. And this should be at least as important as search costs are for diamond buyes are (=i.e. the difficulty of assembling a significant sample of diamonds to choose from in a traditional store).

- secondly, PS is growing up too. Slowly but surely the range and (individual) value of things talked about and traded here seems to go up. As a communication network based on refferences about relatively rare events (how often does one buy large diamonds ?), it may be far from it's critical mass yet.

Just a thought, and allot of wishful thinking from my part perhaps

 

[petersong]

Yes. Masters. I agree with all what you said. But that does not mean it is perfect. Think about when we all research,study, educate online for such little things. Do not you think we should spend more time playing with babies? Knowledge is powerful and I am a computer guy but just lost the original things when we goes to the computer machine internet world...

 

[sapphic]

Personally I think it is a matter of personality. Some people will research the hell out of buying a TV whereas others will just go to Best Buy and pick the brightest one they see. Even in the past, shrewd diamond shoppers could buy books that give them all the information they need to make a good purchase.

 

[belle]

Date: 7/15/2005 3:14:34 PM
Author: sapphic
Even in the past, shrewd diamond shoppers could buy books that give them all the information they need to make a good purchase.

true, but they couldn''t get real time price comparisons or do hca calculations with a book.
not to mention the unfounded benefit of being able to interact and ask questions of a wide variety of industry experts as well educated consumers.

 

[set2374]

I figured I would get something started with posing this question. I am the type of consumer that wants to know as much information as humanly possible before making a purchase, particularly one with lots of zeros. I want to squeeze as much value as possible for every dollar I spend. I take great pride and pleasure in the whole shopping process. I don''t want to just "get it over with". So, I think I am not a "typical consumer". That said, I do think that a more casual researcher that may spend two or three hours reading through the information on pricescope is going to be in a marketly better position than he or she would have been in twenty years ago, when most had to rely on the trusted local jewelers for their diamond education. I would imagine that a very small minority of diamond consumers actually make their purchases online, but the fact that there is an online market has far broader significance on the market in general. Let''s take rapaport sheets for example. The educational information on PS advises the novice about rapaport and then advices them about the "traps" associated with its use. Although it''s easy for novices to fall into these "rap traps", the result of falling into a rap trap is still far better than not know about the rap at all and going down to the local "maul" store and paying $20,000 for a 2 carat ISI2 that, if it had a grading report from GIA or AGS would, at best be J I1. I am sure it''s happend plenty of times back in the day. I would rather fall into the rap trap anytime that get stuck in that deal! Ok... so that''s an extreme example and I would rather stay out of the rap trap all together, but it illustrates my point. B&Ms either now or in the near future will have to adjust their business practices to compete with the internet or change their business plan entirely. The internet business can work on lower margins because they have less overheard so the net profit per sale could easily be the same or higher for the internet vendor even with substantially lower margins. The internet vendor also caters to a much larger market... the entire United States or, for that matter, world. The B&M (with notable exceptions like Winky and Pearlman, that walk on both sides of the vendor fence) caters to a smaller local or regional market. While you can see this effect in other industries (automobile, computers (dell, gateway), clothing etc.), the diamond market is particularly susceptible because it''s a comparatively low volume, high mark up industry with lots of room for one vendor to undercut another. Margins are already low in the electronics industry so if you shop carefully you can save a few dollars here or there, but nothing like what you see with diamonds and other jewelery. This is the dawn of a whole new era in the diamond industry, at least in my lay opinion.

 

[Rhino]

Agreed. Heh... Dave has a wonderful way with words.

In every market there are those who research and those who do not. PS folk and most internet types are those who happen to delve more into the research aspect and it is those who will be rewarded for their efforts and really get the best bang for their buck. The lazy buyer who just wants to walk into a store, pick a stone that seems to be good to them and buys are EXACTLY what most B&M''s like. An ignorant or uneducated client. As was pointed out there are many who will still come to the net for information and buy locally. That''s fine but at least they are purchasing with more knowledge that will help steer them in the right direction. The Internet is about empowering consumers to make more intelligent decisions and I can only see that growing, not diminishing.

As a B&M retailer/etailer the Internet has completely changed the way we buy and sell diamonds and has changed our business rather dramatically. Most B&M''s however are resistant to the net and look for ways to fight and combat it. If they don''t learn to roll with the punches I think they''ll be seeing more and more decreases in sales and more and more sales done through the net as consumers weigh all their options.

 

[JohnQuixote]

Date: 7/15/2005 2:38:50 PM
Author: oldminer

John: I took the good ideas found in your postings and cooked up a more general paragraph or two. This is what makes a forum like this so much better than being in isolation. We would never have known each other. People would not have known about us. Now we are all connected and doing something which makes the knowledge relatively easier than every before to understand.

Dave, thanks for the compliment. I think your cooking is always gourmet on its own, but use my spices any time you like.

Your statement amplifies the reason I find it rewarding to spend time here even when I'm off the clock.

 

[MissAva]

Date: 7/15/2005 3:06:59 PM
Author: petersong
Yes. Masters. I agree with all what you said. But that does not mean it is perfect. Think about when we all research,study, educate online for such little things. Do not you think we should spend more time playing with babies? Knowledge is powerful and I am a computer guy but just lost the original things when we goes to the computer machine internet world...

What makes you think that the people who research things are lacking in other areas. Perhaps responsible aprents want to be responsbile in all areas of their lives including purchases. The diffrence between what you will pay from a PS vendor (ie Jewlery Zone, Nice Ice, WhiteFlash DirtCheapDiamonds...etc) is signifcantly less then what you would pay for a comperable stone with out knowing what to say and look for. That extra money could go to those babies. And not everything is lost when something changes. I love using the internet for keeping up with my family I can write/read e-mails at two or three in the am when the people I love most are sleeping and would not appreciate a quick visit or phone call. I think the computer and the internet is a tool, how one uses it is up to them.

 

[petersong]

This question is for Lynn B. What are your final critical reasons/decision making points that cause you decide to buy H&As from diamondideas instead of from whiteflash? If you can remember. Thanks.

 

[strmrdr]

I think the net is going to have an impact on the diamond business far beyond what it has now.
But I also think there are going to be some twists and turns in that path.
It will be fun to watch and observe but its going to be painful for some in the business.

In a lot of ways the diamond industry has been operating in the old ways and held on to them longer than a lot/most of the other industries.
Maybe too long for their own good.
It was painful for the other industries and its going to be painful for the diamond industry.

The high cost of entry and the control of the rough has allowed it to remain unchanged as long as it has.
That is changing.
Rough is coming from more diverse places and suppliers.
I think in the end the industry will come out very strong but more scattered and split up more into groups than it is today.