Buying Diamonds: Consumers’ Problems and a Solution

[strmrdr]

Date: 5/7/2009 7:52:46 AM
Author: Garry H (Cut Nut)
Storm the cost of design, printing and distribution for all the designers (remember we will have an alternate of an additional 100 at any one time) is going to fell a few forests.

And each retailer is going to have ever changine new stones and bombardment from 105 cut designs???


No baby, it will be all able to be encapsulated in the computer web connection.


It could be that you as a designer have a certain space to use with whatever txt or graphics you desire to lace in the search and display fields. o trees. Info on demand.


does that work for you?

Yes Garry something like that.
I was thinking the retailer would print it on demand and as needed.
Maybe a pdf file, their wouldn't be extra work for next diamond because the designer would do the work.
Add a field for the pdf name and have the page create it as a link, upload pdf file.
They print it and staple a business card to it and send it home with the consumer that wants some time to make up their mind or to show to their friends and family.
Cheap advertising for the program and the store and allows the designer who wants to add value to their designs do so.

But space for a few lines and a couple images is good to.

 

[strmrdr]

Thought of more questions...

What lighting conditions will be represented in the light box?
Will they be available in DC?
What advantages will it have over other light boxes?

Personally I''m not a huge fan of light boxes because so far they haven''t been able to make them realistic enough.
In other conversations you have agreed with this.
What will set yours apart?

 

[Garry H (Cut Nut)]

Date: 5/10/2009 5:52:46 AM
Author: strmrdr
Thought of more questions...

What lighting conditions will be represented in the light box?
Will they be available in DC?
What advantages will it have over other light boxes?

Personally I''m not a huge fan of light boxes because so far they haven''t been able to make them realistic enough.
In other conversations you have agreed with this.
What will set yours apart?

1. the lighting will show fire, a balance and a brightness diffused light that will show dark zones.

2. the exact same lighting will be in DiamCalc, and whats more the diamonds in the light box will be placed in a holder that will move through standard rocking motions. DiamCalc and Gem Adviser Inclusion will make the exact same motions in the exact same light with the exact same diamonds. This is how people will become confident to buy from the computer images.

3. As you know Storm I have been critical of other light boxes. We have studied them, and I have worked in a room above my store for a year developing a system which is based on a patent pending concept. We still have not totally finalized the light box, Sergey wants to experiment with some new LED technology too. But from all my experiments we believe we have the best system for discrimination of quality differences.

4. what sets it apart is that we modelled in comparison to various parts of my store - how different diamonds look at different desks under halogens and also a full life sized variant of my patent pending version which has been used for about 4 years. I have also recently renovated my second store into this type of lighting. It provides an excellent balance between fire and brilliance, is carbon friendly and uses 2500K color temperature which is a comfortable working environment.

 

[Lorelei]

I think it is a fantastic idea with great potential.

 

[Diamond Explorer]

Garry,

This seems like it could be the real diamond 2.0 experience. I look forward to learning of new developments. Are you looking to team up with independent jewelers, larger chains, or both? Great Idea! You can''t argue with just in time inventory, very efficient. Is this idea being promoted in Vegas this year?

 

[Garry H (Cut Nut)]

Date: 5/13/2009 1:03:57 AM
Author: Diamond Explorer
Garry,

This seems like it could be the real diamond 2.0 experience. I look forward to learning of new developments. Are you looking to team up with independent jewelers, larger chains, or both? Great Idea! You can''t argue with just in time inventory, very efficient. Is this idea being promoted in Vegas this year?

Hi Jonthon,
Our preference is middle upper market chains at first, or some cohesive group because we need scale to kick it off.
Mums and Pops could come after the infrastructure was in place. It should work well in Europe where there is a low level of trust of jewelers and that probaly has a lot to do with too little professional knowldedge. The rest of the world is our oyster.

I will be on a cut grading panel on thursday in 2 weeks at JCK Vegas and this will be a main part of my presentation. Hope you will be there. Peter Yantzer and Prof Agwarral will be there too.

 

[Rockdiamond]

HI Garry- a very interesting concept!
In fact, we''ve started a "pilot program" where we are buying rough to cut into old mine stones.
It''s a lot of fun on a stone by stone basis- we''re buying stones that will yield the shapes we want, but using the skill of the cutter to design the particulars of the cut. Of course we trust the cutter based on years of proven results.
We''re also not buying the high dollar colorless, or deep yellow rough- Using brown and cape goods makes the whole thing far more affordable ( and fun).

Storm made this statement
"In today’s diamond market diamonds are cut based on what the industry thinks the consumer may want to buy."
I find this to be only partially true. There''s an incredibly complex set of decisions a cutter need to make. Of course he needs to take popularity of shape into account- but there''s also maximizing yield, minimizing imperfection- all the while maintaining a high level of excellence in the cut.

On a larger scale, here''s the questions I''d have:

My impression is that it is seemingly unworkable based on current market conditions. There are also a lot of variables - what happens if the stone gets destroyed on the wheel?

Why would cutters enter into such an arrangement?
It seems to take all the potential financial gain out of the equation for them. There''s no question some stones are huge windfalls for a cutter- but this is balanced by the ones that don''t meet expectations- or get damaged during cutting. If the cutter can''t ''hit a home run'' occasionally, the entire risk of the operation may become untenable.

From what I see here in NYC, buying rough is so very difficult that turning any profit at all has been practically impossible for the past 18 months.
Lately, rough has come down, and cutters have started to buy again- but many cutters were lost during this shakeout.
I have no doubt Storm can design some beautiful cuts- but as he''s pointed out, it''s going to take a huge investment.


Overall, I find the concept quite interesting- and comes at a very good time- this industry need some excitement!
Given the expertise of the individuals involved, I feel confident the considerations raised will be addressed.
I''ll bet a lot of participants in Las Vegas will sign up!

 

[Garry H (Cut Nut)]

Date: 5/13/2009 6:25:13 PM
Author: Rockdiamond

HI Garry- a very interesting concept!
In fact, we''ve started a ''pilot program'' where we are buying rough to cut into old mine stones.
It''s a lot of fun on a stone by stone basis- we''re buying stones that will yield the shapes we want, but using the skill of the cutter to design the particulars of the cut. Of course we trust the cutter based on years of proven results.
We''re also not buying the high dollar colorless, or deep yellow rough- Using brown and cape goods makes the whole thing far more affordable ( and fun).

Storm made this statement
''In today’s diamond market diamonds are cut based on what the industry thinks the consumer may want to buy.''
I find this to be only partially true. There''s an incredibly complex set of decisions a cutter need to make. Of course he needs to take popularity of shape into account- but there''s also maximizing yield, minimizing imperfection- all the while maintaining a high level of excellence in the cut. The cutters involved will not be ''artisanal'' they are manufacturers with computer aided design and computer aided manufacture - they will make available up to 100 designs for each rough diamond that is being planned. If you want you can see and play with a free viewer technology here http://www.octonus.com/oct/products/oxygen/viewer/ and download very complex models here http://www.octonus.com/oct/download/oxy_demo_files.phtml (go to the last link first please)

On a larger scale, here''s the questions I''d have:

My impression is that it is seemingly unworkable based on current market conditions. There are also a lot of variables - what happens if the stone gets destroyed on the wheel? Our group is putting the finishing touches to a water cooled facet grinding and bruting system, so only the final polish is done on the wheel, reducing heat and stress. Other companies are focusing on new laser faceting technologies that reduce stress - but these risks hold true for all rough diamonds.

Why would cutters enter into such an arrangement?
It seems to take all the potential financial gain out of the equation for them. There''s no question some stones are huge windfalls for a cutter- but this is balanced by the ones that don''t meet expectations- or get damaged during cutting. If the cutter can''t ''hit a home run'' occasionally, the entire risk of the operation may become untenable. the cutter may run plans on say 20% of the likely usable rough that has many alternate plans, then window the best options (which is normal for our clients anyway) and make as many as 20-50 plans (also normal) before deciding that this stone has say 7 or 15 aoptions that will bring in $10,000 to $10,500 - in that case the stone will be money in the bank much faster than if they cut any one option and send it out thru the regular sales process (which itself is a cost center).

From what I see here in NYC, buying rough is so very difficult that turning any profit at all has been practically impossible for the past 18 months.
Lately, rough has come down, and cutters have started to buy again- but many cutters were lost during this shakeout. if you study the OctoNus approach you will understand why the artisanal approach in the old world is being whipped at the post by the new world and the East.

I have no doubt Storm can design some beautiful cuts- but as he''s pointed out, it''s going to take a huge investment. not at all, he can submit designs and make deals directly with cutters. We will introduce new designs in 3 of the 10 masters and the winners will become art of the entire system - such designers names and brands will be openly promoted, so there is no reason why Storm could not become very famous and see many thousands of his stones produced. It is in Next Diamonds bsest interest to protect and foster this innovation cycle and we will take it directly to the regular whlsesale market too.


Overall, I find the concept quite interesting- and comes at a very good time- this industry need some excitement!
Given the expertise of the individuals involved, I feel confident the considerations raised will be addressed.
I''ll bet a lot of participants in Las Vegas will sign up! First we need a partner to operate the infrastructure (we have the technology and many of the worlds largest manufacturers already have enough planning equipment) - and we will probably not roll out to Mums and Pops till latter.

Thanks for your excellent questions David

 

[Diamond Explorer]

Date: 5/13/2009 8:38:14 AM
Author: Garry H (Cut Nut)

Date: 5/13/2009 1:03:57 AM

Author: Diamond Explorer

Garry,


This seems like it could be the real diamond 2.0 experience. I look forward to learning of new developments. Are you looking to team up with independent jewelers, larger chains, or both? Great Idea! You can''t argue with just in time inventory, very efficient. Is this idea being promoted in Vegas this year?

Hi Jonthon,

Our preference is middle upper market chains at first, or some cohesive group because we need scale to kick it off.

Mums and Pops could come after the infrastructure was in place. It should work well in Europe where there is a low level of trust of jewelers and that probaly has a lot to do with too little professional knowldedge. The rest of the world is our oyster.


I will be on a cut grading panel on thursday in 2 weeks at JCK Vegas and this will be a main part of my presentation. Hope you will be there. Peter Yantzer and Prof Agwarral will be there too.

Awesome Garry,

I just changed my flight to come in a day earlier so that I can make the conference. Look forward to seeing you in person and learning about this new program.

 

[Garry H (Cut Nut)]

Date: 5/11/2009 8:20:08 AM
Author: Lorelei
I think it is a fantastic idea with great potential.

Yes Lorelei, but would you go into a store and buy a diamond from here:

 

[Lorelei]

LOL!

 

[Garry H (Cut Nut)]

Date: 5/14/2009 8:05:54 AM
Author: Lorelei
LOL!

I thought it was funny too when I thought of the idea - but seriously (don''t call me shirley) - would you sit down with a sales rep in front of a light box and go thru a diamond tutorial and a crash course in what you know in 15 minutes and then spend 1/2 hour to an hour deciding what you want with more and more time looking at the computer screen.

Not would you now Lorelei (and others) - would you before you found Pricescope and became a seriously well educated diamond buff?

 

[strmrdr]

Date: 5/14/2009 8:13:39 AM
Author: Garry H (Cut Nut)

Date: 5/14/2009 8:05:54 AM

Author: Lorelei

LOL!

I thought it was funny too when I thought of the idea - but seriously (don''t call me shirley) - would you sit down with a sales rep in front of a light box and go thru a diamond tutorial and a crash course in what you know in 15 minutes and then spend 1/2 hour to an hour deciding what you want with more and more time looking at the computer screen.


Not would you now Lorelei (and others) - would you before you found Pricescope and became a seriously well educated diamond buff?

isn''t really all that different from how a lot of stores around here do it.
They have flip books showing the 4C that they use, then they break out the diamonds.
I would rather look at it on a computer screen than a flip book

The real power is they can access the website from home and show others and get an opinion.

 

[jasontb]

My gut tells me this is far too complicated. I think it is innovative and a good idea. I would enjoy the process myself. But I can't see it being popular.

Imagine if you went to a car dealer and they sat you down at a computer and told you to pick all the different features you wanted in an automobile. Body style, engine, brakes, tires, color, options, etc. Then hand over some money, wait, and pick it up in a month after it's made. I think it's a fair analogy. I think most people would be intimidated by the process and have a hard time connecting their specifications with reality, even if you built them a 3D model. People would rather walk onto a lot, sit in the car, say 'Ooh, this is the one I want!' and drive away with it. It's also a lot easier to sell the car when they can sit in (and fall in love with) it.

But I would love the ability to custom spec my own car. Are there enough people like me out there?

I don't like the fact that I resorted to an analogy, but oh well. My point is that a) I think the process will be seen as daunting to most people and b) I think the process will strip the romance and emotional aspects out of the purchase

 

[strmrdr]

Date: 5/14/2009 7:52:47 PM
Author: jasontb
My gut tells me this is far too complicated. I think it is innovative and a good idea. I would enjoy the process myself. But I can't see it being popular.


Imagine if you went to a car dealer and they sat you down at a computer and told you to pick all the different features you wanted in an automobile. Body style, engine, brakes, tires, color, options, etc. Then hand over some money, wait, and pick it up in a month after it's made. I think it's a fair analogy. I think most people would be intimidated by the process and have a hard time connecting their specifications with reality, even if you built them a 3D model. People would rather walk onto a lot, sit in the car, say 'Ooh, this is the one I want!' and drive away with it. It's also a lot easier to sell the car when they can sit in (and fall in love with) it.


But I would love the ability to custom spec my own car. Are there enough people like me out there?


I don't like the fact that I resorted to an analogy, but oh well. My point is that a) I think the process will be seen as daunting to most people and b) I think the process will strip the romance and emotional aspects out of the purchase

one of my ex-clients is a scion dealer and they do exactly this and they sell a ton of them this way.
They wanted permission to set up a kiosk at the mall with just a booth, computer and pictures but they couldn't get permission for it.

Each dealer has a customized page with the dealer name and this on it:
http://www.scion.com/bys/pub/

They have a rack of paint samples, carpet samples, seat material samples.
It is really pretty cool and it works, next time you are near one stop in and check it out.
Roughly 2/3rds of their sales are made this way.

 

[Garry H (Cut Nut)]

Date: 5/15/2009 12:43:49 PM
Author: strmrdr

Date: 5/14/2009 7:52:47 PM
Author: jasontb
My gut tells me this is far too complicated. I think it is innovative and a good idea. I would enjoy the process myself. But I can''t see it being popular.


Imagine if you went to a car dealer and they sat you down at a computer and told you to pick all the different features you wanted in an automobile. Body style, engine, brakes, tires, color, options, etc. Then hand over some money, wait, and pick it up in a month after it''s made. I think it''s a fair analogy. I think most people would be intimidated by the process and have a hard time connecting their specifications with reality, even if you built them a 3D model. People would rather walk onto a lot, sit in the car, say ''Ooh, this is the one I want!'' and drive away with it. It''s also a lot easier to sell the car when they can sit in (and fall in love with) it.


But I would love the ability to custom spec my own car. Are there enough people like me out there?


I don''t like the fact that I resorted to an analogy, but oh well. My point is that a) I think the process will be seen as daunting to most people and b) I think the process will strip the romance and emotional aspects out of the purchase

one of my ex-clients is a scion dealer and they do exactly this and they sell a ton of them this way.
They wanted permission to set up a kiosk at the mall with just a booth, computer and pictures but they couldn''t get permission for it.

Each dealer has a customized page with the dealer name and this on it:
http://www.scion.com/bys/pub/

They have a rack of paint samples, carpet samples, seat material samples.
It is really pretty cool and it works, next time you are near one stop in and check it out.
Roughly 2/3rds of their sales are made this way.

I guess the point we could take from this is there are different preferences for "how to buy" for different people.

For example geeky engineer male types are far more likely to buy online than most any other identifyable group.

What type of person would be attracted to buy this way? Maybe not the Tiffany Cartier experiance seeker - at least not until this method becomes widely known for bringing new and innovative diamonds to the market.

But we do suspect that there is a large number of ordinary people who get scared silly and really do not enjoy / trust / have fun buying larger diamonds - but they feel compelled to do it, because diamonds are one of the main symbols of commitment.

So we are trying to demistify the process nad let people ''test drive'' as well as really get good sales advice at the counter and undestand clarity and color etc

 

[strmrdr]

Date: 5/15/2009 7:11:32 PM
Author: Garry H (Cut Nut)
I guess the point we could take from this is there are different preferences for ''how to buy'' for different people.


For example geeky engineer male types are far more likely to buy online than most any other identifyable group.


What type of person would be attracted to buy this way? Maybe not the Tiffany Cartier experiance seeker - at least not until this method becomes widely known for bringing new and innovative diamonds to the market.


But we do suspect that there is a large number of ordinary people who get scared silly and really do not enjoy / trust / have fun buying larger diamonds - but they feel compelled to do it, because diamonds are one of the main symbols of commitment.


So we are trying to demistify the process nad let people ''test drive'' as well as really get good sales advice at the counter and undestand clarity and color etc

Their target market is 18 to 20 somethings buying their first new car.
A large percentage of their customers are woman.
They are given a color printout of their picks and they can go to the website and log in and view their picks and show others.
Should they buy they don''t have to visit the dealer again until their car is in stock and sign the paperwork and drive off in their car.
Everything can be handled over the phone.
With a good salesperson it works slick.
Some buyers never set foot in the showroom until they pick up the car.
When your in vegas visit a scion dealer.

 

[Garry H (Cut Nut)]

Self service

Or, if I may call it

DIY

 

[strmrdr]

Date: 5/15/2009 8:17:04 PM
Author: Garry H (Cut Nut)

Self service

Or, if I may call it

DIY

more like guided DIY for most customers, where the confident buyers can do DIY.
There are a lot of parallels with online diamond buying as practiced on PS.
Someone can have the salesperson guide them, they can have a friend/stranger guide them, or they can mix the 2.
The confident can just say I want this one.

 

[Garry H (Cut Nut)]

Here is a little more info about the master stones themselves
Each light box will have 10 stones provided free on loan to each store:

Most likely they will be based on the same spread as a 0.90ct AGS 0 H&A''s Tolkowsky with a table about 57%.
There will be a princess AGS 0 (probably around 1.05ct) and 5 other generic cuts, probably including a cushion. These 7 stones are likely to be the same in all stores.
Then there will be 3 stones that will be experimental new cuts and proporietary designers cuts that will have their plans made available to some or all the participating manufacturers. The best sellers of these will replace the slowest selling generic cuts. This will be an iterative and developing process bringing fashion and competiton to the market. It will eventually set Next Diamond into a different market segment of custom focused design, creativity and excitment.

We think comparing diamonds of the same spread is far more useful for consumers, and it is easy for us to calculate.
Of course if the market says "hey, we like the rounds and princess and asschers" etc, well then we will run with the Vox Pop Cut Grading that flows from that.

 

[strmrdr]

What will be the 7 standard cuts and where will the specs for them come from?
Round and princess are AGS0.. rest?

 

[Serg]

Date: 5/16/2009 2:46:13 PM
Author: strmrdr
What will be the 7 standard cuts and where will the specs for them come from?

Round and princess are AGS0.. rest?

Karl,

all 10 cuts are best what we CAN FIND now.
first two RBC and Princess is very important for consumer confidence ( real comparison)
other 8 are best for professional judgement or consumer voting.
we have plan to start from classical fancy cuts like( Cushion( RT=1 and RT=1.2-1.4, Pear( two Rt), Marquise, Emerald, may be Radiant,..)

Now we are developing cushion cut. We had started from 20 different Cushion cuts , did simple optimization, selected 5 cuts. For 5 cuts we did optimization for 15 parameters, select 1. Cut it. Change our method and improve metrics and start again. A soon we will see second attempt.
Process is very slow because we can cut yet exactly what we want . Now we are developing new cut designs ( dll cuts) for Cushion and Pear. we need add some specific parameters for independent( from Rt) control azimuth of main facets .

we have plan optimize or find 10-20 examples, then do final selection
I think we could renew 50% from these 8 cuts each 2-3 years. Do you know about CutShow and CutGame projects?

 

[strmrdr]

Date: 5/18/2009 2:32:29 AM
Author: Serg
Do you know about CutShow and CutGame projects?

no....

 

[Garry H (Cut Nut)]

Date: 5/18/2009 2:39:22 AM
Author: strmrdr

Date: 5/18/2009 2:32:29 AM
Author: Serg
Do you know about CutShow and CutGame projects?

no....

Cut Show

1) The Cycle shown below will build designers and real sustainable manufactures brands
2) Lower holding and selling costs ensure profitability for businesses
3) Diamond Cut’s can become Fashion and more exciting for end users
4) Build REAL consumer confidence for diamond (less ''trust me'', more "I see, I like")
5) Individual customized cuts (especially for large unique rough)
6) Open comparison will push manufacturers to excell and improve production controls
7) Market demand = feedback to create the next wave of innovation

To bring a new cut to market before today requires an investment of $500,000 or more; part of that investment was typically a booth at a trade fair. The ‘Cut Show’ approach makes low cost new diamond cut product launches for even a single new cut feasible. A designer could sell a design to a retailer, or a manufacturer. Or a manufacturer could release a new cut and take orders from retailers.

In one booth buyers could see the new cut’s from different manufactures and designers and compare them all in same light conditions, against a Tolkowsky round, at the same time.

These Cut Show launches could be at trade shows like Basel World. The worlds fashion media could look forward to such an event the way Paris and Milan focus the world on clothing fashion.
The same Next Diamond™ Light Box comparison will help buyers compare diamonds in identical lighting. We envisage:
• Displays that allow buyers / press (general public and trade media) to see any diamond in a few standardized lighting environments.
• With the ability to view stones from any different position from outside the display (security).
• Participating firms should provide 2 or more of their stones, 1 for general display & others for buyers to examine in private buyers booths.
• Staff for private viewings should be trained independent experts who know how to handle and sell diamonds securely.
Like the Next Diamond company, this enterprise will need organizational management, promotion and a permanent staff. It could be operated by an industry not for profit body, or be run by a trade fair group or other private company. Logistics’ would include supply safes, security, several staff and several different sized master comparison stones (like Tolkowsky rounds) cut to very high precision.

 

[queenkaren]

GREAT article, thank you.