Online vs. Brick-and-Mortar – In the Ring: the Diamond Sector

Better prices, better service, and full transparency: the internet is revolutionizing the diamond industry as online retail sales rise

In the first quarter of 2009, in the face of flat retail sales, online sales in the US were up 11 percent and showed a 2.2 percent rise in the second quarter. And predictions for the holiday season are even brighter for e-commerce: while retail sales are expected to stay flat, at best, online sales will see an 8 percent increase over 2008, according to the US Online Holiday Retail Forecast 2009 conducted by Forrester Research. 

According to the survey, 61 percent of shoppers say they like shopping online because the e-tailers offer unique products not found elsewhere, and 52 percent say they find it easier to compare products and prices online than in retail stores.

As for the diamond market, the International Diamond Exchange Online Research reports a net loss (openings minus closings) of 372 US jewelry retail stores in the first nine months of 2009, a significant increase in comparison to the equivalent nine month period in 2008, which saw a net loss of 308 jewelry retailers.

Itzik Polnauer, E-commerce Manager for Leibish & Co – a 30 year veteran in the fancy colored diamonds business and the owner of FancyDiamonds.net – said that between May and November of 2009, his company’s website has experienced a 25% increase in the number of visitors per month, compared to an 18% increase during the same period last year. "People are looking for a wide range of diamonds and prices, while much attention is paid currently to the fashionable black diamonds", says Polnauer and adds, “The shift from offline to online shopping is prominent and permanent”. 

In the online diamond arena, many are enjoying the online sales surge while some find it difficult to stay afloat. But where does the difference lie? Polnauer says successful user-friendly sites understand that buying a diamond can be a daunting task. They put the shoppers at ease by allowing them to have full control over the buying process through a wealth of diamond-related information, high quality customer service, improved security, money back guarantee policies and full transparency.  

According to the 2009 Online Purchases Study of the Jewelry Consumer Opinion Council, 95 percent of shoppers say convenience is the reason they shop online, 82 percent like the lower prices, and 72 percent prefer the wider product availability. In addition, the same study found 63 percent of shoppers who purchased fine jewelry online are “extremely satisfied” with their purchase. 

FancyDiamonds.net is a leading site for fancy colored diamonds and one of the pioneers in its field. FancyDiamonds offers a wide range of the rare natural colored diamonds and jewelry. Since 1995, the site has been catering to a wide variety of global costumers, from collectors to jewelry designers and consumers.