Just as the debate a decade ago about whether consumers will buy high-priced jewelry over the Internet has long been settled, it’s now clear that a growing number of consumers are willing to buy diamonds over their smartphones.
In the conference call following the announcement of its recent financial results, Blue Nile CEO Harvey Kanter said the company just completed an $85,000 transaction over its app. And that’s not even the largest it’s ever done: At one point, someone bought a $300,000 diamond from Blue Nile over their phone. And then there was the $40,000 purchase—that was ultimately traced to a ski lift. (Yes, a ski lift.)
In a way, it’s not surprising that this is happening. Smartphones and mobile devices are basically portable computers. And consumers are increasingly trusting their mobile devices by using them for payments and banking. And if you’ve decided where you want to buy a diamond, you might as well pull the trigger on it when you have time to kill—say, waiting on line in the supermarket.
This is a huge evolution in the jewelry market. For decades, diamonds and gems could only be bought at retail jewelry stores. Then, department stores and other mass-marketers entered the picture. Then came the Internet—but at least with the Internet in its early days, people had to be at home or at their offices. Now they can buy a diamond at any place, and any time. This is the new world we are living in, and it seems we have reached a tipping point, where mobile will become more and more important.
In retail circles, the big buzzword now is “showrooming”—which means consumers going to stores like Best Buy, checking out products like TVs, then ordering them for cheaper right then and there over Amazon. Basically, they are treating brick-and-mortar stores like showrooms.
“Showrooming” is a little less likely to impact jewelers, of course—not all jewelry products, with the exception of things like loose diamonds, can be easily comparison-shopped. But it does once again show the importance of offering first-rate service and a great in-store experience, as well as stocking proprietary brands and products that people can’t buy elsewhere. (Which is where frequently “showroomed” retailers, like Target, want to take their business.)
In addition, savvy brick-and-mortar players need to insure their sites are mobile-enabled, and start exploring other mobile strategies, as Forevermark is doing. For now, Blue Nile and other dot-com players have a tremendous head start with the growing legions of mobile shoppers. But there is still time for other jewelry players to get in the game.