Retail jeweller lying?

[denverappraiser]

I'm floored by the fact that, although >90% of jewelry transactions are made face to face, internet sales remain such a panic-button for so many professionals. Every year "ways to fight" the internet are discussed at trade gatherings.

The fastest growing categories in the retail diamond business are the Internet specialty shops, the big box stores like Costco and Walmart, and the TV shopping networks. This is not a coincidence and the people running specialty jewelry stores are right to pay attention. At the same time, professional jewelers have some very real advantages on the competitive playing field. They don’t need to resort to BS scare tactics.

 

[bunnycat]

One reason I don't get into where I get my diamonds from is that I'm not looking to get an opinion on the quality, and not looking to shop to replace them, so there's nothing a B&M vendor can offer other than criticism that will make me unhappy. For what it's worth, I do feel badly for a lot of B&M jewelers, it is very hard to compete on pricing with some online vendors (think mom & pop shop versus Wal-Mart). A B&M jeweler should be looking to compete in other ways - excellent quality stones that are close in price to what you can get online (I agree with Gypsy that it's hard to find decent quality stones at B&M jewelers), and/or unique jewelry creations and service (i.e., excellent jewelry bench work). Diamonds are commodities, and it's very easy for me to compare apples to apples on price, but settings leave a lot of room to make up the margins, to offer high-quality pieces that someplace like BN can't offer due to mass production. I'll spend a lot more on a locally-crafted, memorable setting. Of course, I rarely find those, either. With regard to B&M jewelers, I do feel for them trying to compete in the modern marketplace, much like I felt for Polaroid, but you need to find a way to adapt to changing times, and most aren't doing that.

I'd feel bad except most of the ones I've met are jerks... I think the BEST way they can compete is by having excellent in-person service, which is something an online jeweler can never do in the same way. My local jeweler who I go to does, and every time I'm in there, no matter what time of day, there are at least three other customers there at all times. And the reason is that the staff is SO AWESOME. I try to find one piece of jewelry a month that I need to have repaired or altered just so I can have an excuse to go in and chat with them... and pay them money. Judging by a lot of the things I see other people bringing in, I think I'm not the only one who does that. Everyone who works there is actually a jeweler (not just salespeople), and they're all friendly and knowledgeable and happy to chat about any jewelry piece and let you try on everything even if they know you're just waiting to get a repair back. But most of the other jewelers I've gone to are haughty and rude and will insult my small budget or the fact that my sapphire isn't pure blue but slightly grey (which I picked on purpose - I specifically asked for a greyish blue because that is what I personally find prettiest!), and be really confused/upset that I know what I'm talking about, or whatever. And then there's the one that insulted my mom's engagement ring so hard she made my mom cry. Look, I just don't have sympathy for anyone who acts like that. Yeah, those people are losing business to online jewelers, but they should. My local guy is still doing pretty well, and he deserves to be.

This is kind of what I do as well. I may be a budget shopper, but I do try to find ways to support places that have treated me well whenever I can.

 

[WinkHPD]

There are some really unique dynamics in the diamond business. Nearly every customer starts out by looking for stones at the local stores. A fair fraction end up there but nearly every one would PREFER to shop locally even to the point that they would be willing to pay extra for the privilege to do so. What’s in debate is how much extra. In the case of bridal shoppers, it gets even better. The shopper (the groom usually) is highly motivated. He’s going to buy somewhere and probably do it fairly soon. He’s saved up his money, he’s put a fair amount of thought into it and is ready to jump.

Unlike nearly everything else you buy, the customer is NOT the consumer. It’s being purchased for someone else. The decision to buy or not buy is NOT about the merits or demerits of the stone, the store or the ring. It’s about the merits or demerits of the girl. What’s on the table is exactly what he wants to buy and who he’s going to buy it from.

Most shoppers don’t know much about what makes one stone or one ring more expensive than the next. It’s mostly a blind item and they are relying on outside advice in the form of salespeople, Internet blogs, tutorials, books, friends, advertising, brochures, appraisers, and others to develop a feel for how it works. The advice received is decidedly conflicting so it’s necessary to choose some and reject others out of hand. There’s a flood of this and every merchant will tell you why they’re the best and why those other guys are to be avoided. BS abounds. The key is education and education leads to trust. This is not a tutorial on staff training, it’s just an observation of the dynamics of jewelry stores. Customers are hungry for education, and they are going to get it from a variety of sources. Whoever they determine provides the best education is going to get the highest level of trust and whoever gets the trust gets the business (as well they should by the way).

I do have some sympathy for the locals in that the education there involves looking at inventory in some pleasant environment that they’ve built, talking to salespeople etc. All of these things cost a fair amount of money and they’re offered to you for free in the hopes that eventually you’ll buy something. That’s the way their business model works. Online folks have some costs too but a good tutorial can educate thousands of people while a personal sales person has to do it one at a time. One good writer and/or photographer can reach a LOT more people so the whole staff training problem becomes far easier to handle. Lists of inventory cost very little to produce and people tend to not understand that lists and photographs are not the same thing as actual merchandise. Most B&M stores can get a very similar selection to what you see on the Internet sites but the expectation on them is that they’ll have goods in hand that you can compare side by side while the expectation on Internet sellers is that they have lots of data. All of this means that the costs of a typical consumer education fall disproportionately on the local retailers. This is what pisses them off. They go through all of this trouble and expense on ‘free’ services and then the customers buy the most expensive part from some discounter far away.

None of this is an excuse for rudeness or bad behavior. They chose their business model and they are under no requirement to do it. If they don’t want to be selling diamonds, they don’t have to do it. There’s money in settings and there’s money in assembly and repair labor. In the classic jewelry store of a few decades ago, the profit came in selling diamonds but that was then and this is now. Margins have plummeted for this because customers do exactly what is being discussed here. .. Buy the stone from a cheaper source elsewhere and ask the store to set it. That’s rational and reasonable behavior and being crabby about it just drives customers away from the store and the possibility of other business.

Here’s some specific advice for stores. Charge enough for your setting services and design skills that you make a living. Charge for what used to be ‘free’ advice (meaning appraisals and the like) and then do such a good job at it that YOU become the go-to expert. Be nice to everyone, even those who aren’t your customers. Not everyone will be. It is NOT a waste of time to talk to people. That’s what salespeople do. They’re in your store for a reason and even if they don’t end up buying from, you got a stab at the sale and you get the opportunity to set up the next sale. If you don’t want to do a particular deal, politely decline and pitch something you DO want to do. As mentioned above, if you want to be an Internet seller, it’s not hard to arrange. I highly recommend it and low low prices is not the only pitch (Tiffany's is into the Internet business in a big way for example). The advantage the big boys have is an illusion and there’s nothing they’re doing that you can’t also do if you want, including discount prices.

Working for many years in the trenches, doing both online and B&M sales I wholeheartedly agree with DenverAppraiser. The more time I spent with someone graciously giving them knowledge, the more likely they were to either buy from me or refer a friend to me. This was especially true when they had bought the diamond before coming to see me and I could honestly spend time building up the good qualities of the diamond that they had purchased.

Even if the diamond was horrible, it was a matter of educating until my potential client could figure that out for himself rather than just telling them that the diamond was horrible.

Some of my best mounting sales were from people who could have bought the diamond just as cheaply from me as they did buying online. I would always joke with them that I was not a jealous jeweler and that I was happy to work with them on any aspect of creating their treasure for their fiance.

DenverAppraiser does this as well as anyone I have ever seen. If he was actually selling diamonds as well as appraising them he could put a serious hurt in the Denver area jewelers's income. People want to talk with him because they know he will give them all of the straight information that they need to make an informed decision.

To this I would only add that if you do not do something well and know someone who does, don't be afraid to refer your potential client to someone who does. It builds good will, not only with your potential client, but also with your competitor who does that type of work. Good will amongst competitors is actually much better for the industry that competitors bad mouthing each other. Even if the slams are accurate they create bad feelings about the industry in the mind or your potential client.

What a great thought provoking post Neil.

Thank you,

Wink

 

[Paul-Antwerp]

I was thinking about this over the weekend, especially about Neil's excellent post, and wanted to add another perspective:

- To date, about 50% of jewelry-sales in the US take place at independently owned stores, which makes this industry an exception in the overall US-retail-landscape.
- Online-sales of jewelry have grown in the past 15 years, but seem to reach a ceiling these last years, at around 10% of overall jewelry-sales.

It is a spectacular achievement for the independents, to maintain 50% market-share in competition with chains, strong corporations and big brands. Which other retail-sector can present similar numbers? Even more spectacular probably is maintaining 90% market-share versus online-competition.

I truly wonder what is at the basis of this success. It definitely is not the scare-stories given to consumers, as I judge the average consumer sufficiently intelligent to see through this.

As was stated here already, for some retailers, it probably is their dedication to correct education, but I doubt that it brings about the above mentioned market-share.

Unfortunately, in diamonds, there is a lot of potential for education, ranging from the differences between various labs, the specific position of each diamond within the range of a lab-grade, fluorescence and let us not forget the major C, Cut. Every sales-person must be capable of giving this education, but I am sure that many take a short-cut, regularly faced with a consumer, not interested in yet another 3-hour lecture. After all, which consumer is ready to get the 'full' education in each store, when they are comparing 3 or 4 stores in their town?

Even worse is the problem for a sales-person having to correct incorrect information stated at a competitive store. Being correct is not that difficult, to be accepted as being correct is a totally different story.

So, all in all, I am amazed at the competitive resilience of the American independent jeweler. I have no idea what drives this, and there probably is not one easy cause.

Live long,

 

[princesss]

I think once the B & M stores hear you have bought the stone online, they figure that you will also purchase a setting online and that you're "wasting" their time by just looking and trying on. I'm sure there are many people who actually do this- but if they make the mistake of assuming that everyone is doing this- they will drive people to do exactly that- shop online. Then when they have to close up shop for lack of business they will bitterly complain that the online companies forced them out of business

Luckily not all jewelry stores are like this. I did find one B&M who always lets me play around and I went in there with my kids, while waiting for a movie to start, and the gal knew I as just window shooping and offered to clean my ring and just chatted with us. Good attitudes like this pay off because I left them a good Yelp review because their friendliness impressed me.

Yes, if you find a jeweler who actually enjoys their profession, it's their passion, they seem quite happy to chat and share info. I've visited a shop here that is FARRRR too expensive, but they are happy to share their love of fancy colored diamonds. They know I'd never purchase from them, I've spoken with them about where I do get my colored diamonds, and are still happy to let me ogle/try on their goods anyway. Guess who I would recommend friends/family to buy from if they want to stay local (which many do)? So even though they haven't sold me one single item, they've still made money off their kindness and customer service to me.

I have a similar local estate jeweler that I adore - I got my studs set there (and for half the price of any other store I'd talked to!), and their sales staff is wonderful. Not only that, but they a) know their inventory backwards and forwards and b) love educated consumers. I point anybody and everybody their way. Over the course of the four years I've been here, they've spent hours with me, talking jewelry and letting me play with some beautiful stones. They've even let a crowd of PSers come in and not only play with their pieces, but take pictures with them. I haven't been to their new location (they used to be right inside the mall so I could just pop in)...hmmm, I think it's time for a jewelry field trip.