Demand for diamonds continues to go up, but so does diamond pricing. Many customers take the solution for this into their own hands. They find loose diamonds that will fit into jewelry, buying different pieces separately. They'll have it all assembled later, but by finding the best price on each component, savvy customers can save thousands.
New Generations are Wary and Savvy
This approach isn't as rare as you'd think. As the DIY generations mature, they bring with them an ability for quick research and imaginative, outside-the-box solutions. They're especially canny when it comes to bringing down the price of luxury items.
Remember, these are the generations that took a look at desktop computers, judged them too expensive, and decided it was easier to build their own out of individual components for half the price. Such solutions drove build-your-own PC websites, suppliers, and influencers into a whole new industry.
This is just one example of the way new generations like to deconstruct the sales process. They have very little confidence, trust, or faith in most services and businesses, and they're very wary of how industries build profit models off of up-charging. They demand transparency and – when uncomfortable with the level being provided – they'll readily explore alternate, piecemeal solutions that build toward the same goal. These solutions may take longer, but they offer more control over the process, as well as savings.
Comparison Shopping Diamond Pricing
This means that part of what you're selling is no longer the diamond itself. You're selling the customer experience as well. You're presenting a level of confidence, trust, and faith the customer can have in you and your brand, in addition to the product itself. This has always been true to an extent, but it's more of a focus today. Customers simply have a better trained radar for falsehood as well as greater ability to investigate alternate solutions.
The New York Times recently ran an article titled, “The Secret to Buying the Perfect Diamond.” It details how customers simply grab GIA identification numbers for individual diamonds in order to assess prices between stores. Multiple stores might try to sell the same loose diamonds because they all have access to the same individual stones.
Once customers knew this about a stone, they could shop around between several retailers for the lowest diamond pricing, in some cases saving thousands of dollars. Katja Seim at the Wharton School assessed that the very same diamond may be 12-21 percent more expensive on popular retailers' sites than on those of smaller retailers with access to the same stone.
Brand Experience Overrides DIY Desire
This means that many consumers may buy it from the smaller retailer after comparison shopping for the best portal. However, not every consumer does this. Why is this? Many trust the larger retailers. The larger retailers have a history and a reputation that can be relied upon. Customers are more likely to have previous experience with the larger retailers (or know someone who does) that shapes their confidence in future experience. Smaller retailers are sometimes viewed as more of a risk to trust.
Think of it this way. Nearly everyone supports buying locally to support small businesses. People love to buy groceries, toys, and handmade gifts locally. These are everyday items. Why wouldn't they?
Yet do people ever say this about luxury items? It's rare. When people spend money for something special, their desire to evidence that the money won't go to waste overrides a daily desire to support smaller businesses. This might seem illogical; in many ways small businesses are often more immediately accessible and accountable. Yet when it comes to luxury goods, the sheer volume and success of a large business serves as evidence that many customers are being fulfilled on a daily basis.
Smaller vs. Larger Retailers
If customers are presented with an opportunity to save money on a diamond, yet they'll have some doubt in their minds as to the trustworthiness of the seller, and they're presented with an opportunity to spend 10-20% more without any doubt in their minds, they'll often choose the more expensive route.
This means that smaller retailers need to work on community engagement, communication, and continued relationships. They also must feature testimonials and reviews – not just of their products but also their services. They need to provide easily accessible evidence to their own accountability and the reliability of their quality. They need to provide the kind of evidence that erases doubts in the mind of the buyer. This allows small retailers to take full advantage the better diamond pricing they can offer.
Larger retailers need to work on transparency and customer experience. Testimonials and reviews are still important, but there's a certain assumption that a large retailer is large because they consistently come through. Concerns that customers have here are more likely to revolve around diamond pricing, diamond sourcing, and response time for concerns they have down the road.
Cooperate with Customers; Don't Just Sell
Understand that your customers are smart and that they'll increasingly have access to better and better tools to check your claims. The service and experience you provide is a greater part of the value than it has been before because it can make customers feel more secure and legitimized in their choice.
This often means a new kind of salesmanship that's based more in cooperation and shared information. The old adage goes that only one winner leaves a sales conversation: the seller or the buyer. That's no longer very accurate. Customers simply come too well equipped these days.
That can be a very good thing. An informed customer doesn't mean a customer who will spend less. It often means a customer who will spend more because they have more confidence in the process when they have more control over it. That means part of a retailers' job now is to sometimes share that control. It can build trust that evolves some of your best continued customers and referrals.