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Advice to B&M Stores on Battling Online Competetion

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Paul-Antwerp

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What I find interesting, is that 12 out of 15 consumers would have researched its diamond purchase on the Internet. I would love that to be correct.

Now, we only need to make sure that more of them run into Pricescope, where they can get the best possible information on the most important C: Cut. Just imagine the force of 80% of the consumers reading the Pricescope-tutorial and surfing this forum.

This reminds me of Bob Dylan, the times, they are a-chaaaaaaanging.

Live long,
 

WinkHPD

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From the article:

Quote:

Panelists disagreed about what to do when a customer wants a store to set a diamond they bought over the Internet. “We offer those customers everything we can get to get them to come back to us next time,” Corey said. But Celia Feder of Jay Feder Jewelers in Denver said her store “would not absorb the risk of setting a stone we didn’t sell.”

Feder was unenthusiastic about the current “branding” trend. It’s hard to see a label on the ring, she said, “unless you have a billboard on your back. What’s going to happen when all those branded diamonds come back as trade-ins?” she asked.

End Quote:
------------
When we set a stone we did not sell we get it in writing that we are not responsible should there be any problems. I have many clients who originally bought their stone on the net and came to us when turned down by other jewelers. I had to gulp hard the first time I told people I would not be responsible for any problems and it got real easy after the first dozen or so. None of them ever had any problems, but I don't think I want to be eating a 10k + stone for a $35 setting fee. (Yes, I know that is more than they charge in New York, if you want to pay $5, go to New York. I have had THAT conversation both on the net and in the office!)

I think that Madam Feder has missed the point (and the boat) about diamond branding and I think the article would have benefited from more of the positive examples of people like Feydakin who have properly adapted and grown because of the Internet.

As far as trade ins, if the stone is properly documented and laser engraved then there is no reason for us not to treat the branded stone as special if we agree that it is special. If a purported H&A brand shows a weak or partial pattern, it will not get a premium here, but if it is of equal quality to one of our branded stones we will treat it equally.
 

Hest88

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Off-topic: Feydakin, may I ask where your shop is located and if you have a specialty? I checked the link in your profile and it, uh, goes to a rather interesting--and non-diamond-related--site.
 

Rank Amateur

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----------------
On 6/6/2004 5:12:17 PM Superidealist wrote:

Summary: Bond with the customer. (link)----------------


Or collude with other B&Ms not to do business with suppliers who supply online dealers.

Or fear-mongering and name-calling (generally underrated as sales tactics).

Or hold your semi-weekly "70% off" sale.
 

WinkHPD

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I am hoping that was said in jest, collusion is such an ugly word, and I suspect a little bit illegal.

There are some who advocate that though, but I think that genie is well and truly out of the bottle.

As for the 70% off sales, the only thing about them that mystifies me is why they work so well. One would think that the public would get a little smart about this, but apparently they never have and don't appear to ever be going to. Old PT Barnum obviously knew what he was talking about.

Wink a non colluding, non name calling non 70% off selling kind of a retail guy who also sells a lot on the net 'cause he can.
 

CaptAubrey

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collusion is as collusion does.






i found this section of the article quite amusing:


Corey tries to get around this by stressing the things that make his stores unique: Customers can compare different diamonds. There’s resizing, lifetime cleaning and inspecting, and a chance to upgrade. And consumers can keep their money in the community.

“There can only be one possible advantage to buying a diamond on the Internet: price,” Corey said. “We want you as a customer for life.”


it's this kind of complacency that is going to kill b&m jewelry retailing. in fact, surveys show that most online retailers are beating the pants off the average b&m when it comes to customer service. there's a hilarious article in the most recent issue of idex, where the editors went mystery shopping to see what things were like at the retail level. among other nonsense they encountered, one salesperson told them that her store didn't need to worry about conflict diamonds because "we get all our diamonds from texas, not africa." this remark was followed by this bizarre scene after the editors picked out a ring:



the certificate for the ring couldn't be found. latrice [the salesgirl] searched high and low but to no avail. i asked anyway what the stone's color and clarity were. but, without the certificate, there was no way of knowing. the ring wasn't even tagged with the details. "i can't sell you this ring without the certificate!" she bemoaned while hunting through a haphazard pile of elegantly presented gia certs. in the end, no certificate, no sale, no matter how desperate the buyer might be.



for latrice, though, there was a silver lining to this cloud. she tried the ring on before putting it back its case and decided that, yes, this was the ring her boyfriend should buy for her. "you know what," she grinned, "i'm not going to take it off. i love it. i'm sure we'll find the certificate in the end, i just have to have it."


and these people wonder why more and more people are buying online?

 

hoorray

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I may get flogged for saying this (although it's been Wink's day for flogging...), but I think one of the most important thing B&M jewelers being to the table today is a good benchman. Internet vendors can compete on quality goods, design, price, and even customer service, but it's important to have and hard to find a good benchman with a good jeweler/businessman to go with him. I'm not going to ship things around for misc service, changes, brainstorming, etc. I really appreciate having someone live to go to for those things. (and I struggle to find one since I'm an internet buyer
15.gif
).
 

WinkHPD

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RE: As Wink said, why should B&Ms go out of their way to help an internet buyer when they have good local customers willing to support them??

End quote:

I said that? I sure did not mean to. I always go out of my way to help all of my clients, but I also go out of my way to make sure that people who bring me things they bought elsewhere are letting me work on them at THEIR risk and not mine. That risk is properly borne only by the vendor or the buyer, not some poor guy making half a buck on the setting.

I agree with you that my $35 fee is too low, but you should hear all the yelping by those telling me they can get it for $5 in LA or NY. Heck, so can I, but I pay more than that here in Idaho.

We have "market tested" the fee. At $25 we sold too many settings and buried my benchman and at $45 we sold very few. Seems that at $35 we sell about 75% of those we quote which gives us a happy balance. That does not include the postage to and back so it is not cheap.

Wink
 

WinkHPD

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Not a problem, no offense was taken. I just talk too much at times and sometimes end up obscuring what I am really trying to say. I just wanted to clarify that I think we MUST give great service, but should not assume someone else's risk.

As a benchman I am sure you have seen some of the garbage that is passed off as jewelry on the net, tiny tinny prongs waiting to snap off in mountings set with CZ side stones so that no heat can be used to repair the prong if it does snap. Much of it is so bad we just return it. I am always surprized when someone says, "Hey, it was cheap, if it breaks it breaks." I do not understand why any one would want a six month ring when for a relatively few dollars more they can have one that will wear for years.

Wink
 

WinkHPD

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I am in agreement with you there. Those who want to stick to or return to the old model will have a hard time in the next few years.

Wink
 

Hest88

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Yes, we've talked about this many times before. It's the same in other industries as well. I have no patience for booksellers who moan about online competition yet refuse to do anything to change their business model.

Fey, the reason B&Ms should help Internet customers is the same reason why a B&M should help a customer who brings in something from another local B&M---by proving you have superior customer service you cement loyalty and attract new customers. So many B&M jewelers have such a grudge against Internet purchases when they should just be thinking of them as purchases from other competitors not *Internet* purchases--because that's essentially what they are. I'm sure there are B&Ms who don't need Internet customers, but for every one of those there are probably many who have or will lose customers to the alternatives.

There's a local B&M here who treated me very well once, by fixing my DH's ring (that I bought on the Internet) and then not charging me for it. I haven't forgotten. Someday I will purchase something from them--though since they're a fairly high-end store it may take me another few years--because I was so impressed with their customer service.
 

aljdewey

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----------------
On 6/7/2004 8:35:47 PM CaptAubrey wrote:






i found this section of the article quite amusing:


Corey tries to get around this by stressing the things that make his stores unique: Customers can compare different diamonds. There’s resizing, lifetime cleaning and inspecting, and a chance to upgrade. And consumers can keep their money in the community.

“There can only be one possible advantage to buying a diamond on the Internet: price,” Corey said. “We want you as a customer for life.”


it's this kind of complacency that is going to kill b&m jewelry retailing. in fact, surveys show that most online retailers are beating the pants off the average b&m when it comes to customer service. ----------------


I have to agree that Corey is in complete denial. I have actually been to Days Jewelers (my parents still live in Maine), and they have more selection of AGS0 stones than many other B&Ms. Maybe that's why Corey is unenlightened.



There are several advantages to buying online.....exceptional selection of AGS0 stones, access to folks who actually CUT diamonds themselves, and tremendous customer service.



These folks are also sadly mistaken if they think that the only way to develop a relationship with a customer is face-to-face. I've never met Brian Gavin or Lesley Harris from Whiteflash in person, but I can assure you I have a great relationship with these folks. They know who I am when I call, and they've busted their collective behinds to make me happy.



Brian was my eyes in comparing a few of their stones. Of the 3 stones I considered, he actually recommended the least expensive of the three because it was the best value and the cleanest. I couldn't have been happier with the stone.



Because my first experience with them was so great, I went back to have them custom-design a ring for me using that stone. Brian listened patiently and asked many questions to be clear on what I envisioned. He patiently explained why the shank of my ring needed to be a bit wider than I initially wanted to preserve the structural integrity of the piece. He knows his craft well, and I benefit from that experience.



Whiteflash also wants customers for life, too, and they work hard to make that happen. That is *not* exclusive to B&M stores.



Corey also forgets that the free sizing ($25 or so) isn't as free when the price of the diamond has been inflated. I could likely get 12 "free" sizings with the money I saved on buying online. Lifetime upgrade? I have that with Whiteflash too.



All of my above comments shouldn't be construed as being anti-B&M, because they surely aren't. I just think that B&Ms need to wake up and realize that price is NOT the only reason to go to an online vendor, and many of the advantages that B&Ms think they are offer can be had from online vendors as well.
 

CaptAubrey

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----------------
On 6/7/2004 8:56:05 PM Feydakin wrote:





$5 will get you $20 that this was a mall store and NOT a true B&M that has any kind of history whatsoever..

----------------

you win. it was indeed a mall store. which is where most of the jewelry business gets done in this country.



my point is simply that i am getting sick of seeing so much complacency about internet retailing in this business. i don't want the small family b&m's to all disappear so that we're left with walmart, zales, and the internet. but the small stores need to adapt, and the first step is recognizing the problem. too many of them think the way that guy in the article does, that the only advantage is price and they have nothing else to worry about. not true.

 

pqcollectibles

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----------------
On 6/8/2004 1:05:14 PM CaptAubrey wrote:




----------------
On 6/7/2004 8:56:05 PM Feydakin wrote:



$5 will get you $20 that this was a mall store and NOT a true B&M that has any kind of history whatsoever..

----------------

you win. it was indeed a mall store. which is where most of the jewelry business gets done in this country.


my point is simply that i am getting sick of seeing so much complacency about internet retailing in this business. i don't want the small family b&m's to all disappear so that we're left with walmart, zales, and the internet. but the small stores need to adapt, and the first step is recognizing the problem. too many of them think the way that guy in the article does, that the only advantage is price and they have nothing else to worry about. not true.

----------------


Or Helzberg's. Where, to quote their latest ad campaign, "Their diamonds are sold by equally brilliant people."
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pricescope

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I just wanted to add that Garry Roskin did a great job in moderating that panel and the article summarized it very well.

I was actually very glad to hear Jeff Corey because he focused on what he can add positive to serve their clients instead of criticizing the internet. He made marketing research. He understand how important for sales people to listen to the customers. I think he’s on the right track.

We know that although millions are doing their research in the internet, only a few % are actually buying online. Majority of customers still prefer buying diamonds in old fashion way.

I’ll try to put here some notes that I made on that seminar. I apologize if my notes are a bit weird and incomplete. The seminar was done as several of questions offered to the panel of three jewelers.


Q1. How to address the situation when a customer shows a printout (prices) from the internet.

Jeff Corey: Days Jewelers

  • Reality: Internet prices are 10%-30% less,
  • More people will be educated in the web,
  • Jewelers should understand the customers, what they want.
  • Research shown that in average people spent 7.2 month researching, many in the internet.
  • People are buying because they developed relationship with sales people, not even a store
  • relationship of trust and comfort is extremely important
  • ask questions what customer is looking for
  • ask why they select this jeweler
  • find out where they had shopped before
  • Internet has better prices but no possibility to compare, see with microscope, upgrade, sizing, years of experience and integrity, service to community.


Celia Feder www.jayfederjewelers.com
If a customer shows internet prices, retailers are competing with wholesalers who drop ship to their customers using Pricescope. Mrs. Feder likes the idea to boycott these wholesalers. She names a website for the trade started by "other jeweler" that will only list diamonds not available on Pricescope.
 

pricescope

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Q2. What would you say about diamonds with grading reports from other store without seeing the diamonds?

C.F.:
  • Cert is just an opinion, you only can say something when you see and compare diamonds.
  • Comparison is a key. Retailer should have enough diamonds in their inventory to show and compare.
 

pricescope

Ideal_Rock
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Q3. Branded Diamonds

J.C.:
Carry their own brand diamonds and brand their own name and integrity. Doesn’t carry nation-wide because doesn’t want to pass the cost of the promotions to their customers.

C.F.:
Against branding because it is difficult to see difference and value may change with the time and it can be difficult to trade in later.
 

pricescope

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Q.4. How to set a stone that was bought in the Internet?

J.C.: Offers the same level of quality and responsibility

C.F.: Explains the risk involved and doesn’t not accept responsibility to adsorb the risk.
 

pricescope

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Q.5. What if a customer wants ideal cut diamond?

C.F.: There is no one ideal. Ideals are changing. It also depends on the ideal viewing environment.

J.F.: Explains what ideal cut means and tries to understand what customer really needs
 

pricescope

Ideal_Rock
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There were a few other Q&A's…

I think the discussion was rather constructive and positive. So I ask you guys not to be harsh with your judgments. Only open positive dialog can help. Confrontation is destructive.
 

mountainrocks

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Just wanted to say that we shopped at Jay Feder's (Celia Feder's store) when I was looking for my Princess Cut. It's interesting to read her comments here after being in their store.

First of all, their salespeople were very nice, and very helpful, but they were also among the most "anti-internet" places we visited. I had done some research before we went in there and I had printouts of several diamonds, including the one I eventually bought from Whiteflash.

They told us that we would get no service from an Internet company, that our diamond would be drop-shipped, and that we'd never have contact with a real person. When I explained that at Whiteflash I was buying a diamond from inventory (expert selection), I was working with a real person, and I had a lifetime trade-in, the sales person looked at the Whiteflash prices and told me that when something sounds too good to be true it usually is. (note to future Whiteflash customers: It isn't)

Their sales person (a Graduate Gemoligist) also told me that in normal conditions I wouldn't be able to see any difference between a Princess with an 80% table/ 79% depth (what they had) and a Princess with a 68% table/71% depth (The Whiteflash stone I was looking at). They also told us that when we bought a diamond, we were choosing a jewler for life, and we shouldn't expect to get good service from a local store if we bought a diamond from the Internet.

(BTW neither of those things are true either, My diamond is amazing, and I've had great service from another local store who has already earned my business on another purchase).

Jay Feder's was a nice store, with nice people, far better than the mall, but I think they, and most B&M's, need to wake up and understand the real reasons that people are buying online. It's not just price that's diving the move to online diamond buying. In fact, in my case price wasn't in the top three considerations. It's the selection, the quality, and the service of the online vendors that sets them apart. Those are things that B&M's should be happy to compete on, but by burying their heads in the sand and crying "it's just the price" they are dooming themselves to a very brief existence.
 
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