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.
Understanding the Role of Artificial Intelligence (AI) in the Diamond Industry
Artificial intelligence leverages computers and machines to mimic the problem-solving and decision-making capabilities of the human mind. It has come into our lives rapidly, and transformed the world in many positive waysmaking it easier for people to contact friends, send emails, and ride a ride-sharing app. But when it comes to AI and something as personal as engagement ring shopping, is there a place for automation?
To answer this, it’s important to first understand the longevity behind diamonds as well as the reason jewelry even exists today. You may be surprised to know that most diamonds are at least 990,000,000 years old, with many as old as 3.2 billion years, (Source). It has been discovered that the first jewelry making occurred 142,000 to 150,000 years ago by Archaeologists working in the Bizmoune Cave in southwest Morocco, with the sole intent of expressing identity, (Source). Understanding that jewelry making was born from the desire to express oneself via art and is linked to one's identity, greatly contradicts AIs automated approach to jewelry shopping.
Blue Nile, a well known jewelry company that started entirely as an online retailer and disrupted the diamond industry, is now opening multiple brick and mortar retail stores due to the realization that buying something as personal as an engagement ring or heirloom piece requires communication, education and observing the item in person. They have foregone their online only model to meet consumers needs and accommodate those who feel never seeing their diamond in person before purchase is too risky.
Diamonds have value in terms of cash money, and obviously a strictly graded diamond is more valuable than a poorly rated diamond. There is always a reason why one diamond is less expensive than another. More often than not, potential buyers believe the difference in price is due to retail margins, however the most common reason for price inequality is diamond inequality. This is not something AI bots take into account because there are so many variables to consider. Be sure you’re asking these important questions to any diamond retailer you work with.
The most important thing to consider when buying a diamond is both the diamond and the dealer, not just the diamond report. Diamond reports do not assign dollar amounts, they only describe diamond characteristics. This is where real life jewelers play a vital role in helping to determine the price and guide you around getting the best value for your budget, a talent that cannot be replicated by AI.
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, say a robot. Read more about how online retailers cannot offer aquality guarantee.
As a retail business owner, we believe our mission is to add value to the consumer and help guide in the purchasing process in order to ensure the customer makes an educated decision at a fair price and leaves feeling proud of their purchase. Explaining why one diamond is half the price of another is important information to have in real time when considering diamonds.
Twelve years ago, when La Bijouterie was formed, we made the purposeful decision to open a brick and mortar location, not an online store, because we value the importance of helping customers in person, especially when making the biggest and most emotionally charged decisions of their lives. It seems as though today’s consumers value the same.
While Blue Nile may use AI to help determine style suggestions based on purchase history and tracking, there’s a good amount of marketing that goes into what you’re being targeted without really understanding why or the unique footprint of the stone you’re considering.
In the case of engagement ring shopping, AI takes the humanization, the identity of expression, and the personalization out of something as intimate as picking out a tangible symbol of your love for the person you wish to spend your life with.
At La Bijouterie, we take a personalized 1:1 in-person appointment approach. We adopted this way of conducting business over 6 years ago because it allows us to educate the potential buyer and it has proven to be most successful. Now more than ever, customers are seeing the value of dedicated and uninterrupted appointments. It’s a time to ask questions and express any concerns you may have.
Interested in setting up a Phase I appointment? You can do sohere. To learn more about the “Reasons To Think Twice Before Purchasing a Diamond Online,”click here. Want to learn about the 4 C’s of Diamond purchasing,click here. As always,reach out to us with any questions you may have. We love hearing from you!
At Your Service,
Founder of La Bijouterie