diamondsbylauren
Brilliant_Rock
- Joined
- Oct 18, 2003
- Messages
- 1,128
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On 8/26/2004 11:12:18 PM davidjackson wrote:
D Riley -
Your comment was fascinating; thank you. If I understood it correctly, you're saying that some key aspects of diamonds which cannot currently be measured according to widely accepted metrics will soon be measurable. If that's true, it seems to make a lot of sense that diamonds will become increasingly commoditized.
Garry -
I'm not sure your perfume analogy is accurate. Here's why. Perfumes are not commodities, because each fragrance is unique. That uniqueness then opens the door for branding opportunities. As you allude to, perfume vendors spend more on packaging and advertising than the creation and manufacture of the perfume itself. But a plain platinum wedding band with no decoration, to use another example, is a commodity, because wherever you buy it from it will be identical, and its characteristics are determined by objective metrics (size, weight, shape etc). A company with a powerful brand may be able to sell a commodity at a slightly higher price, but consumers generally will put a cap on that price premium because they know the products are essentially identical. My gut feeling is that this is the case with diamonds, once the issues that you've raised about measuring the quality of the cut are worked out (as D Riley suggested they will be). Sure, you might pay 5% or 10% or even 15% more for the cache of buying a diamond from Tiffany, but 30% more or 40% more? Not if you know that you could buy an identical product from an Internet vendor for much less.
By the way, that is why I clearly distinguished in the piece between engagement rings and Tiffany's other products. Tiffany's other jewelry is not a commodity, because the designs are unique and can't be purchased elsewhere. The same is true of the bulk of the products it sells in the $80-$750 range. But diamond engagement rings are different, because their design is standard (I understand that there are variances in settings, but I don't think that's significant enough of a differentiator) and the stone at some point - if not now - will be measurable against agreed metrics.
This discussion has been really helpful for me. Thank you to everyone who has participated so far.
2 other questions:
1. Does anyone have any anecdotes about people intially thinking they would buy from Tiffany and then purchasing from the Internet instead?
2. Do you think it's possible that a company like Blue Nile could establish enough of a brand name to become the 'Tiffany of the Internet'?----------------
Hi David,
Diamonds will never be a "commidity" per se- they definately retain value well in certain cases.
I'm of the belief that no machine will ever be able to judge what needs to be seen by ones eyes.
Even if we could assume that there was a way to accurately judge a diamond's cut using it's measurements, there are other factors to consider- such as imperfection placement which will afect a stones saleability, and therefore it's value.
Bottom line- even with all the new tools, I know of no dealer who would buy a diamond sight unseen, regardless of the tools currently avialable.
It's not likely to change because 2.00 G/SI1 diamonds are not fungible.
Regarding Tiffany's- they have extrmemly strict standards, and produce a consistently wonderful product.
In my opinion a large percentage of the people looking for what Tiffany's offers would not want to shop anyplace other than a Cartier, Harry Winston, or Van Cleef.
The internet has allowed some very fine companies ( and a bunch less than fine) to sell to more and more people that would never walk into Tiffany's It's possible to buy diamonds and jewelry that are comperable in terms of quality. At prices quite a bit lower.
Blue Nile has done a wonderful job of establishing a great online brand name.