This content was first published on IGR – Italian Gemological Review no. 4 in 2018. The information provided here is therefore current as of the original publication date.
Ok. We are talking about a durable, unique, rare and eternal good. But what would happen if, before buying a diamond at a retail store, a consumer wanted to verify the information received by the retailer in order to be fully satisfied? It is an emotionally important purchase. As they keep on repeating that a diamond is forever, we expect clarity and certainties. The buyer expects, if not to make a financial investment, at least to protect better his money when compared to other perishable consumption goods. An umbrella against inflation, against the erosion of value over time.
Let’s try to put ourselves in our consumer’s place, in the shoes of a person we will call Mr X. If we were him how would we make this comparison between what we are told by the seller and reality? On which bases would we make decision on the features of diamonds that are worth to rely on? Let’s imagine he passed the learning phases, that he is aware of the 4 Cs parameters, that he knows the reputation and reliability of the main gemmological certification institutes. And that, at the end, he decides to focus his request on one carat G diamond with excellent cut, proportions, polishing and no fluorescence.
First our Mr X will visit his trusted jeweller not as an expert, but not even unprepared. If he doesn’t receive clear and professional answers he will only be left to make a comparison evaluating the offers of other sellers. The obvious step is to visit other retail stores. However, he won’t take long to search the web, as it almost always occurs today. It will be as Mr X had entered a circus. Retailers, wholesalers, banks, intermediaries will appear on his smartphone as wizards, jugglers and fake prophets. Each ready to make promises. At the end, our Mr X will have to cope with much confusion if not traps, snares, approximation.
The need to orient the consumer towards purchase prices is a topic that has been dealt with different times by diamond operators. Some years ago, they already proposed of using full quotation Rapaport after VAT as retail price list. Lately IDEX has tried to make things clear by implementing the Diamond Retail Benchmark, a user friendly instrument that, through an algorithm, updates the quotations calculating an average of retail request prices on a global level. Such system is based on progressive discounts from the price list leading, then, the retailer to make his own evaluations. He will always be the one to determine how to consistently position the price of diamonds when compared to the quality and the presence of certificates, if any. The retailer is left to decide how to position his prices evaluating his service, promotions and post-sale service as a whole.
By Sergio Sorrentino, published on IGR – Italian Gemological Review #4, Summer 2018.
