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In-Depth
Headlines to Bottom Lines
Selling colored diamonds to consumers requires special techniques by retailers.
By Ettagale Blauer
When a fancy intense pink diamond sells for millions of dollars at a global auction house, the ripples can be felt in towns across America. Some local retailers are capitalizing on those “gee whiz” headlines by introducing fancy color diamonds into their merchandise mix. It is a move that requires considerable preparatory groundwork. For some product lines, adding them to a store’s inventory can be as easy as making space in a display case. That’s not the case with colored diamonds. The retailer has to educate himself and his staff about the unique properties, relative rarity, range and market for fancy color diamonds. He has to identify and locate sources for the stones, assess whether his customer base will find them appealing and affordable and then come up with a marketing plan that creates excitement around these unique gems.
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When she began her expansion into fancy color diamonds, the category was unfamiliar territory to Schuring, whose usual suppliers took care of her white diamond needs. So she contacted the Natural Color Diamond Association (NCDIA), the umbrella organization that promotes these rainbow stones. The association, in turn, put her in touch with some of its members, who are dealers in colored diamonds. “A group of dealers sent goods on memo to the store,” Schuring explains. “I was overwhelmed with the amount they sent, the price range and the color range. They were very generous with the merchandise.” The range was wide, indeed, starting from pieces with colored diamond slices at $1,000 and soaring into the stratosphere. Unlike extremely well-financed global giants in the jewelry industry, smaller retailers often need help and advice from their suppliers when entering new product segments — not to mention inventory. Colored-diamond dealer L.J. West has designed its website specifically to educate its retailer customers before they present new products to their own customers. Included is a section that explains the properties and appeal of fancy color diamonds thoroughly and clearly. “The 27-hue color wheel, based on GIA’s definitions of color, is an excellent teaching tool for anyone just starting to offer colored diamonds,” says Larry West. Developed by GIA’s Gem Trade Laboratory (GTL), the wheel presents 27 hue names to describe colored diamonds in a continuous circle. West adds that his company “works with retailers, co-oping ads in national magazines.” Ads in Town & Country, the Robb Report and Elite Traveler show a range of fancy colored stone jewelry and then direct the consumer to key retail outlets. West, whose firm is a main buyer of Argyle pinks, can select matching stones to create fine jewelry in its 47th Street offices in New York City’s Diamond District. The company also provides goods on memo and allows retailers to rotate merchandise until they find the right mix for their clientele.
Though located just 16 miles as the crow flies from the George Washington Bridge that connects New Jersey with New York, Devon Fine Jewelry is a classic example of an upscale neighborhood jeweler. The town of Wyckoff is listed as one of the 100 highest-income cities in the United States. With that income level, it’s no surprise that the residents are receptive to innovative marketing for new products. “It’s just a matter of offering something that is unique,” Schuring says. Her sophisticated clientele was receptive to the store’s promotion of fancy color diamonds because the retailer already has a reputation for selling a wide range of colored gemstones. Schuring says she keeps track of the different gem species the store offers and it now stands at 100. Family-owned businesses become their own brands based on tradition and their hard-earned reputations. For Siegel, the Princeton location of Hamilton Jewelers is unique in the world of small towns. In addition to a world-renowned university, the town boasts art museums and a walkable downtown that could be the dictionary definition of charming. It is also a destination for a global, well-heeled clientele. “Princeton has a very educated base of customers,” says Siegel. “Some enjoy the gemological factors. You have to target your audience with the right information. If you have a couple interested in a cluster ring, not the reason something is blue, you have to focus on what information they want and need. Those of us who are gemologists might want to give too much information.” The key is having the information at your fingertips, should it be needed. Having the information also gives the salesperson the confidence to explain the value of the jewels.
Siegel’s grandfather, who had been wintering in West Palm Beach while operating the Princeton store, decided to retire there in the early 1970s. Retirement didn’t agree with him and he opened a jewelry store there, soon followed by a second in Palm Beach Gardens. To entice the region’s super-rich customer base, Hamilton Jewelers held its first exhibition of fancy color diamond jewelry in March 2013 on a yacht in the marina at West Palm Beach, complete with fine dining and an educational lecture for 150 invited guests. Siegel says, “When we do an event, it’s not just jewelry. The high end needs more than a trunk show.” Hamilton worked with its colored diamond resources to bring in a selection of extremely fine colored diamond jewelry. After the evening event, the jewelry was available for viewing at the firm’s two Florida locations through the following week. Schuring says the wide range of memo goods suppliers provided when she introduced fancy color diamonds to her customers helped to close sales immediately. A mailing to clients and local advertising inviting customers in during a week-long event featuring the new diamonds were all the enticement she needed to bring them into the store. Currently, two large sales are pending. The lower end of memo goods provided, she says, even gave her something to offer customers at the “entry level” of purchasing.
Those dazzling headlines when a fancy color diamond or a piece of colored diamond jewelry gets star billing at an international auction provide a very valuable — and free — conversation opener for retailers. “For the luxury independent jeweler, these auction sales are something that does come up in conversation with the top clients,” says Siegel. “It is impossible to ignore the significant consumer and trade press on the record-breaking prices being achieved by the rare and unusual colored diamonds in the red-hot auction market.” An expansion into this lucrative and highly specialized side of the diamond business gives retailers a new niche that reinforces their own position as an informed and innovative source of unique stones. It also gives their customers one more reason to make them their exclusive personal jeweler.
Article from the Rapaport Magazine - October 2014. To subscribe click here.
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