Online shopping has long been popular, and the interaction between online and offline has become a common mode for everyone. As we see the real estate industry using VR technology for online property viewings, the insurance industry promoting online insurance purchases, everyday items and appliances being sold online, and the digitization of gold and currency, the diamond industry, which has been considered relatively traditional, is also being impacted by this wave of innovation.
1. Ways Customers Compare Diamonds
In the past, when consumers compared where to buy diamonds, they would often visit multiple jewelry stores, ask friends and family for recommendations, or wait for jewelry exhibitions in hopes of finding special deals. Nowadays, many consumers prefer to compare diamonds online, where they can see a large number of diamonds displayed transparently on major diamond websites. These sites provide clear prices, high-definition 360-degree videos, certificate information, and more. This makes it difficult for traditional jewelry stores to attract new customers.
2. Easier Access to Better Prices
Prices on major diamond websites are usually much better than those in traditional jewelry stores. Why? These websites often upload a large amount of diamond data directly from the source to the website for consumers to purchase. On the other hand, diamonds in jewelry stores often go through agents and wholesalers, adding layers of profit and making them more expensive. Customers today find it much easier to compare prices, leading to decreased profit margins for diamond sellers. As they seek better prices from suppliers, these suppliers, in turn, attract new retail partners with lower prices, resulting in a drop in diamond prices.
3. Importance and Channels of Information
In the past, consumers obtained diamond information through face-to-face communication with jewelry store staff, based on the store's decor and the staff's expertise. However, modern consumers are more knowledgeable and savvy, seeking in-depth information before making purchase decisions. Many consumers now research relevant information online before visiting jewelry stores. Therefore, in addition to providing products and services, accurate and in-depth information is more crucial for today's diamond retailers.
4. Increased Difficulty in Counterfeiting Due to Information Flow
In the past, when information wasn't easily accessible, there were many cases of diamond counterfeiting. The lure of enormous profits attracted unscrupulous traders. Additionally, the knowledge about diamonds, diamond testing tools, and information within the diamond industry were all tightly controlled by industry insiders, making it difficult for consumers to verify the authenticity of diamonds. However, the widespread availability of information today means that even ordinary consumers without specialized knowledge can find useful information online to distinguish diamonds, increasing the difficulty of selling fake diamonds.
5. Reduced Distance Between Producers and Consumers
In the past, diamonds often went through a complex supply chain involving agents and wholesalers before reaching jewelry stores. However, with the convenience of the internet, mature international logistics, and cross-border payment systems, producers can now directly collaborate with retailers around the world, shortening the supply chain. This significantly reduces the role of agents and intermediaries, allowing consumers to buy diamonds at better prices.
6. Increased Market Competition
Due to the internet, the widespread availability of international logistics, and cross-border payment systems, the barriers to selling diamonds have significantly lowered. In the past, becoming a diamond seller required finding diamond agents or intermediaries in the local area. However, now it's much easier to work with international diamond suppliers through the internet. This has led to more new entrants in the market, intensifying competition. Different companies highlight their strengths through pricing, styles, or corporate image to stand out in the competition, enriching consumer choices.
7. Impact of Cultivated Diamonds
With the advancement of technology, cultivated diamonds have entered the market on a large scale. In the past, the high cost of cultivated diamonds prevented them from becoming mainstream retail products, leading many natural diamond retailers to not keep much inventory. However, after 2020, De Beers introduced cultivated diamonds at $7000 per carat, officially bringing them into the market. Cultivated diamonds now have the same composition and appearance as real diamonds, and with mainstream certificates and the revised US diamond definition, the concept of synthetic diamonds being fake is being challenged. Leading online diamond retailers are now selling both natural and cultivated diamonds. In many developed regions, the market share of cultivated diamonds has exceeded 30% and is increasing every year, further squeezing the market for natural diamonds.
8. Decline in Cash Transactions and Mainland Chinese Customers
During the heyday of cross-border travel, many mainland Chinese customers traveled to Hong Kong or Macau with cash to purchase diamonds and gold. However, with tightened cash transaction regulations and improved technological surveillance, mainland Chinese customers can no longer carry large amounts of cash when crossing borders. This has further challenged the already struggling diamond market. With transactions becoming electronic and authenticated, purchasing jewelry will slowly become a monitored consumer activity.
We can anticipate that more technological elements will enter the diamond industry in the future. Digitized certificates, AI-designed customizations, virtual currency applications, and more are all impacting the traditional diamond retail business. The entire diamond retail industry will move towards prioritizing customer interests and convenience. To stand out, diamond sellers will need to think from the customer's perspective and take extra steps.
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