Do Consumers Really Want to Buy Diamonds Online?
February 11, 21
It's often hard to understand cause and effect. Retailers have seen a surge in online diamond sales as a direct result of coronavirus restrictions. But how much of that will stick if and when things ever return to "normal"? Our underlying desire to buy a gem online may not be as strong as some headline figures would suggest. Signet saw e-commerce sales surge 61 per cent across its brands over the holiday season. For Tiffany the figure was 80 per cent. And across the US online sales of all jewelry soared by 62 per cent in January. Digital sales may be the silver lining of the global pandemic, but are we really embracing online sales, or is it merely a question of needs must? I say that because only a small minority of consumers actually want to but their jewelry online, according to a survey by the business consultants Bain & Company.
Only 11 per cent of US shoppers say their first preference would be to buy diamond jewelry through e-commerce, a figure that has risen only fractionally from 10 per cent in 2016. The remaining 89 per cent would still opt for an actual store. Specialized brand stores were favorite (29 per cent), followed by a department store, independent store, and duty free/discount store. In other key markets, China and India, only eight per cent said online would be their first choice.
At least that's what they say. But another survey, also by Bain, tells a different story. The overwhelming majority may say they favor bricks and mortar, but push comes to shove, they go shopping online. In the US a quarter of young buyers (millennials and Generation Z) say they chose and paid for their most recent jewelry purchase online, entirely shunning any actual store. Only 33 per cent shopped as their parents and grandparents did before the internet - by walking into stores with no online research. The remainder used a smartphone, laptop or other device for at least part of the process. Eighteen per cent chose online but picked up their purchase at a store and 24 per cent did their research online but made the actual purchase in store. Among the older generations 17 per cent said they chose and bought online.
So as we saw above only 11 per cent of US residents say online is their first choice. But many, many more are actually buying online, and many, many more are engaging with the internet to make their purchase. In China, where only eight per cent favored online purchases, at least 20 per cent said their last jewelry purchase was online. In India, where eight per cent also said they preferred online, 16 per cent of younger generations actually bought their last item online. The figure was six per cent for older generations. As with every set of stats, there are many ways in which they can be interpreted, or misinterpreted. And there are many variations of the same question that can elicit very different responses. But the apparent mismatch between those saying they favor a physical store and those actually buying from one suggests that many consumers are in a state of flux, as indeed, is the market. They aren't sure themselves quite where their preferences lie, especially when it comes to diamonds which are, for most, a rare and expensive purchase that they want to see and want to feel for real.
The statistics cited above are taken from The Global Diamond Industry 2020-21 report - Brilliant Under Pressure, published this week by Bain and the Antwerp World Diamond Centre (AWDC).