RAPAPORT... Proprietary, fancy shape diamonds are a way to give customers something unique and special, said David Sternblitz, vice president and treasurer of Zale Corporation. They represent quality so the price point is higher, but their margins are not necessarily significantly higher than other diamonds.
However, because a fancy shape diamond has more facets to it — for example, the brilliance of the Zales Diamond is due to its exclusive 82-facet design — customers truly feel as though they are getting a very special diamond.
Branding StrategiesZales is continuing its direct sourcing penetration; that is, it’s making an effort to source its product overseas by buying cut and polished diamonds and then assembling the product itself.
“By doing that, we’ve been able to increase the consistency of the product, buy more effectively and, in some cases, that means giving the customer a better value,” said Sternblitz. Buying diamonds loose brings more quality control, because it’s easier to inspect the diamond. It allows the company to maximize efficiencies. It’s part of an overall effort to increase communication and coordination between the Zales and Gordon brands. The two brands will have a core assortment and then other offerings to distinguish the brand, such as their proprietary stones. Since Gordons has a very ethnic customer in some markets, the brand will continue to cater to that group.
“We’ll use the synergies of the two brands rather than have them compete against each other,” said Sternblitz.
Meanwhile, one of Zale Corporation’s big spring initiatives is to move toward centralizing its merchandise— with a basic core assortment for both Zales Jewelers and Gordon’s Jewelers — in order to leverage buying power and take advantage of synergies.
Customer’s ChoiceSan Francisco, California–based Shreve & Co., which has a flagship store on Union Square and another store in Palo Alto, has a more mature market that tends to prefer round, brilliant diamonds. The company does sell radiant, emerald and princess cut diamonds as well. Its customers lean toward buying diamonds for second marriages or upgrades to their original diamonds.
Overall, the store is seeing a big upturn in its diamond business; it has turned to branded diamonds, including Hearts on Fire, Cento, the Star 129, the Gabrielle diamond and others. And it’s pushing those diamonds hard with radio commercials. The diamonds it sells range in size from 1 to 5 carats. The company is finding that it can take longer to get higher-quality or branded diamonds because vendors don’t have a large supply, according to Richard Horne, Shreve president.
Shreve & Co. carries South African diamonds and has begun traveling to South Africa with SA Gems. That vendor has given Shreve a chance and Horne likes the opportunity to get to know the source of his diamonds.
“How many jewelers know the family that cuts the diamonds?” he asks. He does—and he uses that in his marketing.
Overall, the majority of his sales are diamond solitaire earrings, diamond line bracelets and white settings.
Ronda Daily, owner of Bremer Jewelers, which has two Illinois locations, one in Peoria and the other in Bloomington, finds that fancy shapes do very well for her. She sells radiant cut, Hearts on Fire and just took on Cushette. She likes them because they’re not shoppable items; her customers can’t drop into a mall store to compare prices. Her customers love anything special; the Hearts on Fire Dream diamond does particularly well. A key factor the diamonds have to have is good proportions.
In general, business is great. Like other area jewelers, Daily had to weather a 90-day, going-out-of-business sale of K’s Merchandise, which had more than a dozen locations. But once that was complete, she saw an increase in business and thinks that independents across the Midwest are probably seeing a similar benefit.
Brittany Adair, who with her father owns Romance Diamonds in Fayetteville, Arkansas, says that radiant and ovals do best with her customers. She’s seen a lot of requests for ovals, particularly the 1.50- and 2-carat ovals. She believes the appeal is that the elongated shape of the ovals makes them look bigger. Taste is driving the preference for fancy shapes.
It’s clearly wedding season at Romance Diamonds. “A lot of people are getting engaged, so our diamond counter has been pretty busy,” Adair said.
Adair’s customers are keeping it simple with delicate shanks, a shift from the past, when her customers tended to go for big and bold shanks with lots of diamonds on them.
The Marketplace• Spring brings the bridal season.
• Journey products continue to do well.
• Circle pendants remain strong.
• Diamond fashion in general is staying strong.
• Diamond supplies are good, although finding better stones can sometimes take more time.
Article from the Rapaport Magazine - April 2007. To subscribe click here.