Can the Web Be a Diamond's Best Friend?
thestandard.net
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By Jacob Ward
Internet Diamonds closed a $6 million round of
financing on Thursday, making it the first
VC-backed pure-play Internet diamond retailer
in the country. But jewelry trade associations
like the Manufacturing Jewelers and Suppliers
of America have been providing Web
development services to their members for a
while. There are dozens of ways to buy
diamonds online. The real problem may be that
no one's been buying.
"We get a tremendous number of inquiries,
and we spit out the bottom-line price we can
live with," says Michael Kay, creative director of
London Gold, a Phoenix, Ariz., retailer that set
up an Internet store recently. "But 99 percent
of the time, we get no response." Besides, he
says, "No one can appreciate the beauty of a
stone over the Internet."
Buying diamonds isn't like buying identical
goods such as CDs or books – consumers have
to take into account the naturally occurring
differences between each diamond. "Most
people tend to think that diamonds are
manufactured," says Ren Miller, executive
editor of Professional Jeweler, an industry trade
magazine. "But diamonds are like snowflakes –
there are so many quality factors, especially
with the cut and the clarity of the diamond. You
have to be able to trust your jeweler to explain
what the differences are."
Internet Diamonds supplies information about
rating diamonds, with Web pages that explain
and display certificates from the Gemological
Institute of America (the venerated, nonprofit
diamond grader), as well as diagrams (but not
photographs) and the four "C's" (carat, color,
clarity and cut) for each diamond.
But can the trust that real-world jewelers have
toiled to establish follow them into
e-commerce? Consumers are only just
beginning to acclimate to $15 and $20
purchases online; meanwhile, a 1.76-carat
round diamond, certified by the GIA laboratory,
is on special for $14,241 at the Internet
Diamonds site. Other players seem to think
consumers will catch on. It's rumored that
Tiffany, the famed luxury-goods retailer, will
make an e-commerce play soon, and that cable
channel QVC's online component is about to
launch a jewelry site.
Internet Diamonds intends to make consumers
comfortable with low-price guarantees and a
10-day no-charge return policy. "We offer the
same caliber diamond as Tiffany or anyone
else," says Doug Williams, VP of supplier
relations and cofounder of Williams & Sons, the
25-year-old diamond retailer that became
Internet Diamonds three and a half years ago.
"The Gemological certificate guarantees value."
Cable shopping channels have upgraded the
quality of diamonds they sell via 800 numbers
recently, and Miller says it just goes to show
that a market may be on the way.
"If you look at shopping habits five years ago,
you'd have thought there wouldn't be a market
for this," Miller says. "But now QVC has
18-karat diamonds and gold from Italy, and it's
their most successful thing. Even though
people might be hesitant to buy over the
Internet, once they do it one time, they'll get
more used to it."
Williams believes the diamond business is due
for a leap forward. "The diamond industry is a
very antique industry. The last thing to hit the
diamond industry was the mall."
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