Rapaport: Education Equals Trust

[pricescope]

Good interview: Education Equals Trust

Funny enough, I was going to touch some/same points in my lecture today...

 

[strmrdr]

Interesting.
A Pricescope consumer would eat him for lunch but his strategy would work against blue nile and amazon and some of the others.
Against the personalized service, price points and quality level that whiteflash, gog, Wink, diamondexpert and the rest of the gang provide he wouldnt fare as well.

Overall he gets it but I dont like his attitude.
In the long run I dont think branded diamonds are going to be a saving grace for most vendors like he is counting on.

 

[belle]

interesting article. i do think his summary of the impact that the internet has on diamond sales is probably true. retailers need to realize who their customers are and use that to the best of their advantage.

thanks for posting this leonid. best of luck with your lecture today!!

 

[USFBulls]

As a newbie who until I discovered PS would have never thought of buying online I think his strategy of product differentiation can work well. I say this because I think most people would be scared to purchase a diamond online.

After educating myself via this forum and other research my fears are gone. I also think it would be hard for him to convince most on this forum he could offer such supperior service and quality that would warrant his mark-ups.....

just my 2 cents.....

 

[NoonersMom]

Very interesting article. I have to agree with Strm on many points. However, as a consumer, I don''t care for his attitude. It rubbed me the wrong way. There will always be people that purchase based on brand and what they believe is value. "Value", just as beauty, is in the eye of the beholder. It just happens that my definition of value doesn''t match with his. I suspect this is the case for many PSers. This just makes me appreciate PS and the reputable PS vendors that much more!

Leonid good luck with your presentation today!

 

[USFBulls]

one more thing... i know my future fiance will be thrilled once i tell her i purchased her diamond online....got great quality, service....and best of all a great price!

his quote of do you want to tell your fiance you got her ring at cheapdiamonds.com is crap IMHO

no i rather tell her i got ripped off at your store

 

[MissAva]

I agreed with almost everything he said...except that a girl would be ashamed of the whole dirtcheapdiamonds thing. Girls are not getting a diamond they are getting a husband. And I think his tactic of "give me your credit card" seems harsh and would be the sort of thing that would have me change my mind about where I was purchasing my diamond and setting. Thats just me though service is nubmer one but so is a polite attitude.

 

[Regular Guy]

To me, the remarkable places...that we really need to learn from...are especially places like GOG and Nice Ice, where they provide a) one set of prices and b) serve both the internet and their local clientele.

On a contemporary thread here, where a Canadian is asking for feedback on GOG, the writer (Detox) reports:

"I can definitely tell that my research is starting to pay off. I walked into a local Jewelers (family business) near my home in Toronto. Not being dressed sophisticated I wasn''t really being waited on even though the store was practically empty. finally when someone did come to help me I asked for a specific set of parameters for a diamond and immediately ears perked up.

The owner was now helping me...........LOL. They owner said "wow that is very specific criteria" He immediately handed me a loupe while he prepared the microscope for view. Am I the only one who shakes like a made man while holidng a loose diamond with tweezers..............I hate that part.

Anyway, I was up front and told the jeweler that I had being doing my research for the past month we discussed diamonds a little. I could tell he did not try to pull the wool over my eyes once (probably thought he couldn''t anway). When I asked whatt he prices where he immediately said "the prices on those tags mean nothing, here is the real price" and the prices dropped like $1200-$1800 per diamond. I was just looking "

Now doesn''t that just say it all?

When shopping on the internet, the world is your market, and you need to set prices accordingly to draw someone to you. Locally, since circumstances may just draw someone in, with the cause being significantly different for why someone would come into your store, it''s only rational to have prices consistent with the cause that draws your customer to you.

Locally, when shopping for a car, car dealers will -- without apology -- have two sets of prices...the internet price, and the regular price. (Actually, we did go to a dealer after being told all their "advertised" cars had been sold, negotiated for a car, and purchased it at the "negotiated" price, and only later, when having gone home, and learned the car we bought was in our stack of advertised papers that we walked in with, we had to call and ask for the refund of several hundred dollars, based on their misinformation; at this point it is simply our expectation that the check is in the mail).

Similarly, locally, it is likely that Charleston Alexander, a jeweler who is actually expanding in our DC area, may well have 2 sets of prices. I can actually even somewhat understand this. And so, reflecting on both the reasonableness of this, and also, recalling Yohawking''s suggestions about this...seeing a B&M providing wares that reasonably serve both their local, and also, a world-wide market...is really something to see.

 

[Regular Guy]

BTW, who doesn''t like education, and therefore...who doesnt like Pricescope?

Taken to want to extrapolate further, however...as to the implications of education....

I posted the note above because the underpinnings of both the interviewee (Mark Moeller) Leonid introduced, as well as the notes from writer Detox, seemed to both be drawn towards the same light, or implied query...why are things the way they are with local vendors vs the internet. My conclusion about the scope of the market just seemed to be the obvious conclusion.

As to education, as a strategic component to a vendor''s effort to draw consumers...seems like this may be a coincident artifact...that points to the vendors genuineness, their actual personal interest in this endeavor, and their likely longevity. Whether they use this education to enhance their contribution to society, or instead, fall to the prey of the "dark side," and use this to threaten consumers, suggesting that by not going to them, they will suffer the consequences for the errors they will make in the selection process...this is yet another thing. But the association between the media for making diamonds available for sale (storefront vs. website), and the addition of the feature of highlighting education as part of the services offered...I think that relationship may ultimately be somewhat spurious.

 

[bar01]

Sigh,

These guys still don’t get it. Let me respond to two of the biggest myths guys like this keep spouting.

Comment “I have yet to see anybody that can sell the best quality, at the best price, and also service their clients”

My Response – BS! Try Whiteflash, or GOG, or Cherrypicked, etc... This reason I went online is because of the lousy customer service, or lousy prices, and/or lousy quality in the majority of B&M store’s near me. I have said it before and I will say it again – my experience buying from on line vendors was better, more personal, more relaxing, more informative, more custom, and more enjoyable.

Comment: “The internet company isn’t sending you the diamond without paying for it”

My response: More BS – I got to look at my loose diamonds and sapphire, risk free for 10-14 days before buying. During this time I examined the heck out of them in my own home then took them to a professional independent appraiser and then decided to buy them after I was completely comfortable. Of course they had my credit card number during this time.

 

[Dancing Fire]

Date: 6/2/2005 10:11:40 AM
Author: USFBulls
one more thing... i know my future fiance will be thrilled once i tell her i purchased her diamond online....got great quality, service....and best of all a great price!

his quote of do you want to tell your fiance you got her ring at cheapdiamonds.com is crap IMHO

no i rather tell her i got ripped off at your store

if i''m gonna get rip off, i rather tell her i got ripped off at Harry Winston''s,at least i can stick my chest out.if i told her i got rip off by MM,she will probably ask me,who the "F" is MM?

 

[pricescope]

Thanks for good wishes, guys. It''s over now and I think is was pretty good. We''ll try to put video online in a few days....

 

[Kaleigh]

Glad all went well Leonid, can''t wait to see the video!!!

 

[aljdewey]

I actually thought quite highly of the way MM approaches things. That''s not to say I agree with everything he said.....I think one of the stupidest quotes I''ve read this year was " I just couldn’t be proud of the fact that I bought my wife a diamond on cheapdiamonds.com". In my world, I''d be more embarassed to say I bought a diamond at one of the elite places (HW, Cartier, Tiff''s, whatever).

A name is a name is a name.

But, I have to say that he is one of the vendors that I think is moving in the RIGHT direction.....trying to build value in what HE provides. To me, this is FAR better than those vendors who are doing the hand-wringing and cursing about how the internet is the devil incarnate, and how the shills are trying to steal bread off honest jewelers'' tables.....blah, blah, blah. You all know the type I''m referring to.

MM seems to understand a few basic things well:

1. Business has to adapt to conditions, and griping about them isn''t going to change it.

2. Traditional jewelers'' time is much better spent in building a value to their *services* and products.

3. Building that value gives some customers a reason to pay a little more.

4. He fully realizes that 30% or so of consumers are the die-hard folks who are ruled by the dollar and don''t place much value in services, and he wisely isn''t trying to compete for that segment of the market.

5. Regarding the services/markup......while it may not mean a bunch to some of the extremely dollar conscious here, there IS benefit to some folks in having a local place to do prong checks/repairs and buy other goods such as colored stones, etc. It IS easier to bring a piece locally than shipping it back to an online vendor, and there *is* value to that for some folks. Value isn''t always the lowest price; oftentimes, it''s a blend of superior product and breadth of services. Many folks are willing to pay a bit for the convenience of "one-stop shopping".

Doesn''t mean it''s right for all, but I like this guy''s basic SOP. I think he''s a bit glib about it, and I also think he''s been hit hard by his own marketing train......but then again, I respect someone who believes in the value they provide.

 

[lostdog]

"But I am not selling it at the same price that the internet is, unless they want to play by the same internet rules. It works every time."

It works every time. His words. Anyway, as pointed out, the internet rules at some of the internet jewelers can be better than the typical B&M rules. Often much better. How would actual knowledge on the part of the consumer work in his scenario?

I'll take the better of the PS vendor rules. Can he do as well?

"MR: How about business-to-business (B2B) internet?

MM: I don’t think that there’s any doubt that the internet is incredibly helpful. Not so much for my vendors, but if I get an unusual call or if I want to check the price on something, I can go onto Diamonds.net and look up what everybody’s selling for and what diamonds are being offered at and immediately get a handle on exactly what’s happening. That’s invaluable, especially if you’re buying and selling and trading as we do. We’re not only buying from Lazare and Hearts on Fire, but we also buy from consumers, other diamond dealers and any other place that we can get good value. And so having that information online is tremendous"

Wait, wait! He knows exactly how the internet helps somebody buying diamonds, when it's himself. "We can get good value": a concept he's ready to dismiss as soon as a consumer seems to be looking for it. That's not one of the options for them. Pay in person for quality and service or click for price, that's the way the world works, only two outcomes.

The trouble is this guy understands it all too well. Salesmen, since they deal with the situation every day, like to employ the techniques of an information bully: cast doubt on other sources, present false choices to the consumer, challenge the consumer to decide instantaneously. It's a general FUD approach, sow fear uncertainty and doubt as to the quality of competing products hoping they will grab whatever lifeline you are throwing them. (You're their "friend", of course)

And that's the double-edged sword of consumer education. It provides a pretext for retailers to overwhelm the consumer trying to understand. Tell the consumer all sorts of esoteric things that can go wrong in the transaction or with the product. (Tiffany&Co's website does this nicely, too, if you want to see another example). The goal is to make the infromation gathering process complicated enough, uncertain and difficult enough, that the consumer is motivated to reduce the whole thing again to "comfort level" and emotion, which not incidentally gives the retailer most of the control again. How nice of a diamond to sell, and for how much money, how much markup, those sorts of issues.

The information pipeline is turned back on itself. In some hands, Education equals mistrust.

(Catch some other curious things in that article: he sells diamonds online, it's just not his good stuff; his goods are best, others sell only what they say is best. (and how do you know his stuff is best? he says so, doesn't he?); "will the certificates make the internet more powerful?" is answered with Sam Walton's received wisdom about 27 percent of people buying on price.)

So my opinion is that this guy is being somewhat clever, appearing to acknowledge the power of the internet on the one hand, while actually trying to characterize it in a way that can't threaten him too badly. He's probably a very good saleman. Interesting to see who this "works" on.

"They want to know that they’re getting good value and they don’t want to pay too much, but the experience they have with us is as important as the actual buying of the diamond."

And this shows exactly what he doesn't get, or at least won't admit. These are the strengths of the good online sellers, too.