The Retail Apocalypse: Reality or Fake News?
Ever since the catastrophic take-off of online e-commerce sites (ahem.. Amazon), brick and mortar stores have been shaking in their blue jeans. Macys, BCBG, and Tommy Hilfiger to name a few have each filed for bankruptcy since 2018, and that’s just the start of it. Even with what seems to be a doom and gloom mentality for most B&M retailers, a major question still remains... how does this shift in purchasing affect retailers where transactions are largely based on trust?
Take for example the jewelry industry, or more specifically, engagement ring jewelers. Often times buying an engagement ring is a one time purchases and more importantly, the first large purchase for a young couple. There is a lot to be educated on when it comes to a diamond purchase (read about the 4 C’s), and a blind purchase without physically touching or seeing the product often times doesn’t work for most couples. You’re not buying a robotic vacuum cleaner or a t-shirt after all.
Of course you have online sites such as Blue Nile that claim to be a “A modern approach to celebrating life’s most cherished traditions”, but does this so called modern approach work when it comes to buying something so personal, and more so, is the jewelry industry as a whole really hurting due to the e-commerce boom?
An article from National Jewelers does a great job comparing and contrasting certain statistics around if all brick and mortar stores should be worried. According to the article:
“Research group IHL said more stores had opened than closed this year, counting 8,428 closures and 11,393 openings. U.S. retail sales are on the rise. The retail landscape is changing, but sales are still growing. U.S. retail sales are up 3 percent year-over-year, totaling $82.7 billion through June 2019, according to IHL’s study. The closures are concentrated in the department store and specialty retail segments, said IHL. Within those two segments, the closures have been driven by a handful of companies.
The study found that e-commerce currently represents 19 percent of all retail sales with 10 percent of those sales coming from e-tailers. The remaining 9 percent stems from traditional retailers. Online sales are expected to account for 25 percent of retail by 2021, with physical stores involved in 81 percent of all retail fulfillment. In general, we see company-specific issues (too much debt, over- expansion, poor models) in the companies that are closing stores or are going bankrupt, not a systemic overall retail issue.
This article quickly debunks the myth that retail as a whole will struggle without an online presence and clarifies that it has more to do with a companies business model than actually being solely an e-comm brand.
Great. But what about the jewelry industry as a whole? Is there an advantage to buying online? I mean, as we all know, shopping online is synonymous with finding the best deal around...right? Actually wrong. Check out the following stats around diamond sales as a while and why buying a diamond online may end up costing you more.
According to the latest Bain & Company report:
“The global demand for rough diamonds is projected to grow at approximately one to four percent per year through 2030, while supply is projected to grow at a far slower pace, somewhere between zero and one percent. An improved economy and increases in disposable income are driving diamond consumption in America, and China’s long-term demand for diamonds is expected to increase as well. India’s growing middle class represents an additional area for consumer growth, with a rapidly growing demand for diamond bridal jewelry.”
More so, purchasing a diamond online means you’re not able to work with an experienced jeweler to come up with a diamond ring, (setting and all), that fits within your budget. It’s a common misconception that shopping online will get you a better deal. An experienced jeweler can help you prioritize what is most important to you and your significant other, (say diamond size perhaps), and find you the best options given your criteria and budget.
But how will you know that you’re getting a quality product? Well, a diamond should be inspected top to bottom with a magnifying glass so you have a clear understanding of what you’re actually purchasing. An online website has no pressure to offer you a top quality diamond at a reasonable price since you’re not meeting them face to face after all...which brings us to our next point.
Did you know that online diamond stores do not offer any quality guarantee? If something is in fact wrong with the diamond you purchased, (say an imperfection you weren’t expecting, or the color is off), it would result in you overpaying for a diamond you thought was a great deal. The truth is there is a lot to consider outside of the 4Cs that someone who isn’t in the diamond profession would have no way of knowing.
Lastly, buying a diamond online means making one of the biggest financial purchases of your life completely blind. As you might imagine, it takes years to understand and learn how to evaluate a diamond, which is why buying online can be so tricky and unforgiving. Sure you can try to pawn off a faulty diamond, but you will end up losing hundreds, if not thousands in the process. Do yourself a favor and go with a jeweler that prides themselves on the customer service they offer, and has many repeat customers.
So to wrap this all up in a shiny box, the brick and mortar industry isn’t going anywhere so long as the store has a healthy business model. Second, the brick and mortar jewelry industry is thriving due to how most individuals like to make these big life purchases- educated and with a trustworthy jeweler. Lastly, buying a diamond online could end up costing you more money in the end. What are your thoughts on all of this? We’d love to hear them! Leave us a comment below or book a no-stress appointment.