A consumer walks into the store or starts to browse the Internet looking for that all important diamond jewelry piece. They have their budget, but just how well-informed are they regarding the diamond they can afford? How do they decide how much they are willing to pay for the diamond? Do they really know if what they’re paying is a fair price for the stone? What about price-lists - just how much does a consumer know of the great issue of diamond pricing? And, as far as the Internet goes, are they flocking to the mouse in search of a bargain? Or, do they prefer to close the sale at a jewelers with an actual door rather than a portal?

 

IDEX and Pricescope.com posed these and many other questions to diamond consumers. All of those taking part in the survey had previously bought more than one piece of diamond jewelry. All were extremely Internet savvy and, as users of pricescope.com, were certainly more diamond aware than the average consumer. So, while this may not be a representational selection of consumers looking for diamond jewelry, all responders had very strong opinions and mind-sets regarding the state of diamond jewelry purchasing and diamond pricing today.

 

All of those taking part in the research group noted that first they determine their budget and then go looking for the ‘most’ diamond for their money. ‘Most’ for many means researching a combination of the four C’s and deciding beforehand which are their priorities, i.e. size over clarity, or color over size etc. For the majority, more than size, their major priority is that of the cut, several even noting they’d be willing to pay extra for what they perceive to be the ‘best’ cut. Again, it’s their own personal perception of what constitutes the ‘best’ cut. Once they’ve decided on all of the above parameters, it’s then a matter of searching the Internet to see what’s available. With this research in hand, many will then head out the door to local jewelers to see inventory and compare prices.

 

“To sum up - it was cut rather than price which determined it for me.”

 

“I am not willing to pay a premium for things I cannot detect with the naked eye.  For me, anything above an eye-clean SI1 will cost money I'd rather put into the carat weight.  Ditto for anything above a true I color in a round brilliant.”

 

“I’m willing to pay extra for great service and a ton of upfront information.”

 

“For me, I start with a fixed budget of how much I can afford and then see how much diamond I can get for the budget I have.”

 

“I will pay a slight premium for peace of mind in the buying process.”

 

“I am absolutely willing to pay more for generous return and upgrade policies.”

 

How Important Is A Diamond Certificate And Just What Does It Mean To You?

 

As one diamond buyer summed up the conundrum: ‘Would I buy an uncerted diamond? Yes if it was under $300 and came from a trusted vendor or was on the used market at a steep discount. Would I buy a $10,000 diamond uncerted? No way no how.’ Most consumers believe a certificate serves as a good guideline when purchasing a diamond, but many point out that an independent appraisal is as important if not more so. As one said: “I want to pay for what the diamond is, not what a piece of paper says it is.” Nonetheless, certificates from reputable organizations carry a great deal of weight.

 

Consumers agree that a grading report is not only a matter of accurate and reliable description, but is crucial in order to maintain and uphold consumer confidence in diamonds. Certificates are regarded as useful in the buying process, creating an equalizing force between different vendors’ stones. “Once I own the stone, I couldn’t care less about the certificate, but it helps create an ‘apples to apples’ shopping environment, which is important,” one consumer said. In addition, a diamond without a certificate raises the nagging question: ‘If it is such a great stone, why doesn’t it have a certificate in this day and age?’ Certificates have become so widespread that they are a requirement in the market.

 

“Higher prices for certified goods makes sense. I see this as some sort of transactions cost: one gets to pay for safety instead of just taking a risk.”

 

“The paper (certificate) means absolutely nothing to me. It's just a toy to play with. However, it is very helpful when searching for a diamond, especially over the net.” 

 

“I don't put more importance in a cert vs. an appraisal from someone I trust and believe to be good at what they do. Theoretically I'd buy an uncerted stone.”

How Has The Internet Affected Your Diamond Buying Process?

 

No surprise here when almost all respondees began with the huge wealth of information regarding diamonds available on the Net.  And, as they noted, education does influence the final purchase. For many consumers venturing into a store and asking such information from a salesperson is not only intimidating, but unfortunately many don’t receive the information they’re after, and even worse, receive wrong information. Also, the huge inventory carried by the major diamond sites on the Net provide consumers with exposure to a wider range of stones than can be found at local stores, along with a less-pressured buying process. For many, the ease of kicking off their shoes, browsing through limitless information and a seemingly endless array of stones and prices ended up with them making a final purchase and, in several cases, over their designated limit. Why? Simply because they felt more secure in their knowledge, and, opposed to that old adage that ignorance is bliss, many, after spending in general several hours over several days visiting diamond sites, would re-define the parameters of the four C’s they were looking for and were willing to spend a ‘little’ more for the stone they wanted. As for making the actual purchase. Well, it’s not what you’d think... but that’s another question.

 

“It helped us understand the market price for what we were looking for and enabled a little negotiating.” 

 

“It was a simple thing to find vendors that were willing to answer my questions, and were eager to help find a superior product. This was not the experience I had when going from store to store to store in town.”

 

“The Internet allows me to do an extensive amount of research as opposed to being at the mercy of my local jeweler and his knowledge (or lack thereof) and his possible hard-sell.”

 

“I had access to a MUCH greater selection. Before, I was stuck looking at a local vendor's 81 table princess stones.”

 “The Internet breeds better educated consumers, not just in diamonds or jewelry but in EVERY industry. It also breeds a more demanding customer as a result of that education, and a slightly more cynical one.”

 

“The Internet helped me originally primarily as a tool for research. Who knew that there was all this information to learn about DIAMONDS, AKA faceted pieces of carbon! Once I learned a bit, it was like a drug.”

 

Internet VS A Bricks and Mortar Jeweler. Have You Bought A Diamond Over The Net? If So, Why Did You Choose The Internet Vendor, Was It Price, Service, Selection, Ease, Etc.?

 

For many, buying a diamond is still very much an emotionally linked purchase and this means that when the crunch comes most consumers still prefer to make the final buy at a physical location. But as far as our consumer group goes, once they’ve made a purchase online, then local jewelers are going to find it an uphill battle to get them back inside. As would be expected, many stated that the Net provides them with a safety blanket of information and prices. With their printout in hand they then visit a store and expect to see a comparable stone at a comparable price.

 

But, it’s not all doom and gloom for retailers. While they can’t compete price-wise with goods offered on the Net, most consumers don’t expect them too. In fact, the overwhelming majority stated that they would be willing to pay a premium to a local store purely for service and even ‘supporting local businesses’. The premium they are willing to pay though fluctuates depending on the price of the piece. If, for example, a stone is valued at $2,000, most agreed they’d be willing to pay 10-15% above the Internet price. But, for larger items, the 10-15% premium takes a sharp dip, with consumers noting that once a premium is more than a few hundred dollars, service and community support goes out the window in lieu of savings of $500 plus.

 

Many Internet vendors are also offering 10-day inspection periods, payment plans, and other incentives that retailers don’t always provide. So, perhaps it’s time for retailers to check out their Internet competition and ignoring prices, are they offering something you’re not?

 

“I am willing to pay perhaps 10% or a couple hundred dollars more for good local service and convenience, but not much more than that.”

 

“I won't pay a premium to buy loose stones locally, but I will for finished pieces since finished pieces have so much more to them than just the quality of the stones.”

“It's a tremendous advantage to be able to scroll through the stones' specs on-line, pick out the ones that fall within the parameters I'm willing to pay for, and then have my trusted on-line vendor (that's the most crucial part), look at them with his own eyes and give me an honest opinion on the stones' appearance.  Then, the narrowed down field of one or two stones can be sent to an independent appraiser for me to view and at most, I'm out some postage, insurance and appraisal/consulting fee.”

”It seems as though there is such a blur between e-vendor and bricks and mortar. Many are both. In either case, it is important to know the individual people at each place.”

 

“I would definitely buy a diamond over the Internet, as long as I got it appraised and there was a return policy, etc.”

 

“I haven't bought from an online vendor because my local jeweler has always been able to get me what I want at a very good price, but I definitely would consider an online purchase if an online vendor had something I wanted.”

 

Where Would You Go To Find A Diamond With The Lowest Mark-Up?

As we mentioned, this group was extremely Internet aware and not surprisingly this could be seen in the responses received. The Internet, more specifically eBay, came out on tops as the place to visit if you’re looking for a great bargain. But, as almost everyone mentioned, you may not find what you’re looking for on eBay, but if you do, it’s bargain city. Following eBay and the Net, it was then onto pawn shops. But again, the lack of selection was pointed out, with some even mentioning that buying a diamond or diamond piece that had been pawned seemed like buying into ‘ill-luck’. According to this group, your local independent is most likely to be more expensive than other stores, but as we’ve seen from other responses, consumers are still willing to pay the extra for service, locale and a face-to-face encounter with someone they trust.

 

“The cheapest place to get ANY diamond would probably be eBay, but I would not just buy ANY diamond.”

 

“Definitely eBay, but you have to be VERY careful.” 

 

“The cheapest diamonds overall I've found in the NY diamond district.  The best deal on high quality, ideal cut diamonds, I found on line.” 

 

“Once I had the criteria set for the stone I was trying to find, the Internet had the best price.”

 

“I think if you are lucky you may have a chance to save the most amount of money with eBay.”

 

And, for those of you looking for a ‘cheap’ diamond, that many say is an oxymoron, one of the participants concluded with these words of advice:

 

“You want cheap diamonds, my cousin Vinnie can hook you up... But he only sells out of the trunk of his Caddy, at night, behind the Pizza Shop under the bridge.”

 

“Many girls would love to buy a cheap diamond for themselves, but would kill any guy who bought them one.”

Would You Buy A Lab-Made Diamond Instead Of A Natural Diamond?

As one buyer put it: “Natural diamonds are rare, that is their beauty. They are created by nature and fashioned by man. Synthetic diamonds are nowhere near that in spite of the fact that some of them really look nice. One should call it what it is and what it is not.”

As for how much a synthetic stone is worth compared to a natural diamond, most consumers were in agreement that the answer is considerably less. Some people expressed the view that they were willing to buy synthetic stones for their fashion jewelry but absolutely not for an important piece of jewelry, such as an engagement ring, wedding band or eternity ring. Also when looking at synthetic diamonds, most consumers noted they were simply too expensive. “The cost would have to be around CZ level for me to consider it.”

 

One interesting view was that if inexpensive synthetic diamonds in colorless, small sizes became available at prices low enough to truly compete with the H/J I1-I2 mass market and had G/H color and were SI1 or better clarity, they would "kill the lowest end of the small diamond business. People who buy these low-end small diamonds set in jewelry are not experts nor do they generally care a lot about what they are buying. They are cruising for a ‘look’ at the right price, and they have a budget. In addition to that, these people far outnumber affluent buyers.”

 

“It's kind of like the difference between a genuine brand watch that costs $4,500 and a $10 knock-off I can buy on the street corner. It would never mean as much to me as the real thing.”

 

“I have no problem with natural vs. man made as long as people are educated and informed about it. Make your choice and decide what you are willing to pay for it.”

 

“I've worn a CZ. When it was brand new, nobody could tell the difference, apart from a jeweler with a loupe. But I knew, and it bothered me no end.”

 

“There is no way I would buy or wear a synthetic diamond. Fake is fake, whether it's a Louis Vuitton hand bag, a Rolex watch or lab-made diamond.”

 

WHEN YOU PURCHASED YOUR DIAMOND, WAS IT AN ENJOYABLE EXPERIENCE?

An overwhelming no came out on this questions, with many consumers stating that diamond buying is a highly stressful experience. They are concerned they won't get what they are paying for. Or, to put it more bluntly, they will get ripped off. Consumers want to be taken seriously and have issues spelled out clearly and feel that store employees have the knowledge and are willing to share it with them. What should they be looking for and what are the pros and cons of a particular gem. Many diamond buyers are also young – engagement ring buyers, for example – and do not have substantial confidence in buying more expensive goods, so they want to be put at their ease.

 

Another major related point mentioned was that many jewelers and other jewelry selling stores make little effort to provide the information and level of service that consumers think they deserve due to the amount of cash they are planning to invest in the jewel. The message for store owners seems to be: give more (information and service) and you will get more (a higher value sale).

 

“Diamonds are a remarkably blind item for most customers. The difference between a $10k stone and a $15k stone can be very subtle. Heck, the difference between a $15k stone and a $10 CZ can be tough!”

'Lots of money is at stake, everyone wants the ‘best’ and there is very little agreement about what that means.”

 

“I am in agreement with the sentiment that it is a fear of being ripped off. For many, the prospect of possibly being "tricked" out of, what for some is, a large amount of money is extremely disconcerting.”

 

 

SURVEY HIGHLIGHTS

PRICE IS NOT KING. Consumers are willing to pay a premium when purchasing from local jewelers, but most balk once the difference is more than 10-15% higher than offered through an e-commerce vendor. More than anything they’re looking for a package and are willing to pay for it. This includes personalized service, payment plans, generous return policies and upgrade offers.

 

EDUCATION IS KING. Educate them and they will come. It’s all about knowledge, service and trust. This is where the Internet comes to the fore. An overwhelming majority of those questioned use the Internet before stepping into a store - but still prefer to make the actual purchase at their local jewelers.

 

NATURAL WINS HANDS DOWN. Apart from a small minority, most consumers state clear and loud – there isn’t really an issue, yet. Yes, they would buy a synthetic piece in a fashion jewelry item, but for that all important wedding ring, anniversary ring or any emotionally linked purchase - it has to be natural. As one member of the group noted: ‘It’s like comparing a natural set to a silicone set. They may look the same, but we all want the real thing...’

 

PRICE INCREASES LOOK UPSTREAM. Well, they definitely know more than many in the industry would give them credit for. When it comes to pricing, they look towards the miners (notably almost all quoted De Beers, not any other miner) as the price setters. They believe the rough flow to the market is controlled, but on the other hand, they wouldn’t like to see a sudden flood of diamonds into the market leading to tumbling prices.

 

STILL A SCARY BUY. No matter how much knowledge they have. No matter how comfortable they feel with their jeweler. No matter how many stores and sites they’ve visited, everyone agreed that buying a diamond is a scary experience. So, what do they want from the industry in order to make the diamond buying experience feel less like they’re  taking part in the Blair Witch Project? Uniformity in description, apparently ‘ideal’ varies from jeweler to jeweler. And, above all what one consumer noted as “the ridiculous inclination to insult customers' intelligence with 50-80% off sales (which are held WEEKLY!). Any idiot with five minutes and a keyboard can easily figure out that the 1.05 H, SI-1, EGL-graded stone would NEVER be worth $16.5K---all without even sticking a toe in the lake that is understanding “make”. 

 

* * *

The idea of Pricescope as a diamond price comparison site for consumers came up in 1999. The site was launched in February 2000. A few months later Garry Holloway, (Melbourne, Australia) started to contribute advanced educational content to the site: tutorials, articles, cut analysis tools. Later on other diamond experts such as David Atlas, Yuri Shelementiev and Sergey Sivovolenko, and many others contributed to the site content and education. Thanks to contribution of many consumer enthusiasts and industry experts, Pricescope today is one of the leading sites in the content and active discussions on diamonds, gemstones, jewelry, weddings and other subjects