The retail jewelry market is the final frontier of our industry. Before diamonds find their way into retail store cases, a countless number of people are involved in getting these stones out of the earth, and unlocking their beauty to transform them into the exquisite pieces of art that consumers cherish, and wear as a symbol of wealth, love, and status. But all of this tedious effort is wasted if consumers cannot find an outlet to purchase diamond jewelry, and if their experience in those retail outlets is a negative one. Let’s take a look at some of the professions within the retail jewelry space that help get our product in the hands of consumers.
According to popular estimates, there are more than 70,000 retail diamond jewelry stores in the United States alone, and more than 250,000 worldwide. These stores directly employ more than a million people in various roles. It is a highly fragmented market, where many small shops have just a few employees, who play many roles within the company. On the frontline are the salespeople, who must convert interested consumers into buyers. According to a McKinsey study of US consumer behavior, experience and trust are the most important buying considerations after price.
Just as in any other type of sale, gaining the trust of a customer is top priority. Salespeople must always remember that the decision to buy an expensive piece of jewelry is a personal and emotional one, and also that they may be sharing in a couple’s intimate experience such as an engagement, anniversary, or birthday. Since consumers in today’s market are never starved for choices, salespeople must educate the consumer on what he or she is buying, and explain why their offering is better than their competitors. The degree of skills and education vary widely across the industry, but the most educated and skilled salespeople can earn significant incomes through commissions and incentives. For anyone who has ever shopped for diamond jewelry, the difference between a professional salesperson and someone who ‘just needs a job’ is immediately obvious.
Many jewelry stores offer appraisal services. This service might be provided by the owner/operator, but some larger stores may have an in-house person, who exclusively does appraisals for its various locations. Appraisals are important and must be handled with great care. Appraised values will affect insurance premiums, and are also used when dividing or selling assets in an estate sale. In the majority of cases, appraisals are done to finished pieces of jewelry, and it can be more difficult to determine the exact weight of diamonds, base metal, and other gemstones. The appraiser must be well versed in current trends in jewelry design. He or she is almost always a certified gemologist.
Just like the loose diamond trade, finished jewelry has a diverse network of wholesalers, dealers, and import/export businesses that buy in large quantities from manufacturers and deliver in smaller quantities to a network of retail outlets. Wholesaling jewelry is a high risk/high reward business. Wholesalers must be able to negotiate exclusive arrangements with jewelry manufacturers at low prices. They must also be able to readily sell their jewelry, or risk being stuck with expensive inventory. Quality control is a key factor for these businesses, and the wholesaler will usually spend a lot of time directly in the factories to ensure that he is buying a well-made product that will not lead to problems and returns.
Pawnbrokers have always been around, but their importance in the jewelry market has been growing in recent years. If a consumer is not too picky about buying used jewelry, and possibly having less choice than at a retail outlet, using a pawnbroker might be a good way to save money on diamonds. Although pawnbrokers sell a myriad of items in their stores, jewelry is often among the higher ticket items, and thus must command importance in terms of product knowledge and placement. A pawnbroker will usually have some measure of appraisal skills, and an ability to check prices against other retail competitors.
Auctions are also growing rapidly as an outlet to sell both finished jewelry and loose diamonds. The diamonds press reports regularly on the results of special jewel sales from the world’s major auction houses. However, there is also a vast network of smaller auctions that cater to local and regional markets around the world. These auctions can be a great way to access rare pieces that cannot be found at traditional retail outlets, and are usually sold at below-market prices. Jewelry dealers looking for unusual pieces that can be easily sold frequent them. The role of the auctioneer goes well beyond just conducting the auction. They are also responsible for evaluating the piece, compiling an auction catalogue, which includes photographs and detailed history, and advertising the auction to the public. They must also manage the many other people involved in the process, such as staff receiving bids on the telephone, and all of the buyers in the room.
Like so many other things in our world, computers and the internet have opened up important sales channels for diamond and jewelry retailers. Almost all major retailers have e-commerce platforms, as do some of the standalone online retailers. Unlike their bricks-and-mortar counterparts, these stores are managed by IT professionals of all stripes.
Diamonds are big business, and provide employment to millions of individuals and families around the world. Few people ever get the opportunity to see the full scope of activities across the pipeline, and the many different people that work hard to support the diamond industry. I hope I’ve opened your eyes to some of the many people behind the scenes who we all rely on to bring our product to the consumer market.
The views expressed here are solely those of the author in his private capacity. No one should act upon any opinion or information in this website without consulting a professional qualified adviser.