Defend Diamond Jewelry's Value Or Learn To Live With Sale Prices
A friend of mine was recently in Los Angeles on a business trip. Aware of my connection with diamonds, he delightedly told me a story about how he had bought his wife a diamond bracelet.
So far, so good, I thought. What was the reason for the purchase, I asked. A wedding anniversary or some other milestone? Or maybe because he travels so much and leaves his wife at home with two children under 10 years of age, he wanted to "compensate" her as it were. To keep her happy with a special gift.
I was impressed that he had found time in a busy schedule to track down a jewelers. How had he decided where to buy given the barely half a day he had free before heading for the airport and the return flight, I enquired.
That led to the not so great side of the story. He saw a jewelry store whose windows were emblazoned with 75% off posters. What better opportunity to buy a piece of jewelry, he thought. He was happy with the price, and his wife was delighted with the gift.
None of this is new, of course. We have all seen stores offering such discounts. I remember on a trip to Antwerp some years ago seeing a line of jewelry stores all offering substantial reductions, each one appearing to want to out-do his neighbor in an insane race to the bottom.
The industry spends considerable resources and time telling consumers that diamonds are special, that they represent important lifetime events, that they symbolize love and long-term relationships.
The romance of diamonds: created billions of years deep under the ground, and only a carat or so of rough diamond in each huge truck full of ore brought to the surface. The diamond is then carefully checked, sorted, sold, cut and polished and carefully set in a piece of jewelry for you, the consumer, to buy at a 75% discount.
The message is pretty clear to consumers: diamonds are just another commodity. More expensive than coal, tea or oil, but nonetheless just a commodity. In the same way that you expect a sale in a clothing store to throw up a bunch of bargains, jewelers are telling buyers that they can also expect to pick up an item of jewelry at bargain basement prices.
For the jeweler, it may make sense: he can get rid of old stock and, with the cash coming in, can buy new lines. And when the new goods come in, the 75% off posters come down. But will the customers come into the store?
If you have got them used to 75% reductions, why on earth would they now pay full price? Sure, it's a new line and design, but, hey, a diamond is just a diamond. If I paid $1,000 last time, why would I now fork out $4,000 for something that looks fairly similar?
Retailers are not just shooting themselves in the foot, but also causing damage to the whole diamond pipeline. Either a diamond jewelry item is exquisite and has a timeless quality or it's just a nice bauble that the buyer is happy to pick up at a knockdown price.
Originally published in IDEX Online