Seeking professional advice
Consumers are being provided irrelevant data, making sales at the store difficult. A customer looking online to buy an engagement ring is able to find hundreds of choices with a plethora of slightly different certificates all showing an equal amount of slight variances in measurements. However, they should be focusing on buying a nice quality diamond with inclusions positioned in inconspicuous places or on evaluating the overall brilliance and shine. This can only be achieved in the presence of a professional jeweller or gemmologist where they are able to compare physical diamonds for maximum value. Remember, value is not only about the lowest price, rather, the nicest stone for the lowest cost. An online shopper will choose the cheapest combination of clarity and cut leading them to purchase the lowest quality diamond, not the best value diamond.
If this online shopper was guided by a gemmologist, they would be shown the obvious deficiencies (which contribute to the low price) of the stone they selected. On a wholesale level, the cheapest diamond is not the best diamond as the market is efficient enough to price an inferior SI2 at a lower price than a nice SI2. In the online marketplace, this inferior SI2 is not differentiated because the assumption is all GIA-certified SI2s are the same. This speaks to how excessive transparency has led customers to shift their purchases from brick-and-mortar stores to the web, believing they are getting a better deal online.
Dare to compare
Although transparency has been a net positive for the jewellery trade—addressing questionable diamond sourcing, chain of ownership, and the funding of wars—the hyper-transparency at the online retail level has reduced diamond sales at retail outlets. These sales have moved online due to consumers’ emphasis on (or distraction by) miniscule differences in diamonds. Online, consumers are left to make decisions based only on price, and are therefore not maximizing their purchasing dollars—purchasing a low-quality diamond at the lowest price. Hyper-transparency is misleading consumers by distracting them from relevant information to focus on the less relevant—offering a diamond on the basis of certificate evaluation rather than a physical, real-time comparison in the presence and under the guidance of a jewellery professional.
Isaac Mimar is CEO of MDL Diamond Merchants, a diamond house based in Toronto. A second-generation diamantaire, he has an economics and finance degree from the University of Toronto, holds a gemmology degree from Gemological Institute of America (GIA), and currently serves as treasurer of the Ontario chapter of the GIA alumni association. Mimar is also an active member of the Diamond Bourse of Canada (DBC) which is now affiliated with the World Federation of Diamond Bourses (WFDB). He can be contacted via e-mail at issac@mdldiamonds.com.
