Without question (Part 3)

Is the industry becoming complacent?

Part 3 of 4

By Hemdeep Patel

Gemmological diamond reports and jewellery appraisals continue to play an important role in our industry, since they are the key methods in which grades are presented to customers. As the number of laboratories increase, the various grading methodologies and techniques are creating deviations from the traditional grading scale. Diamonds that were once graded as VS2 from one laboratory are now graded as VS1 from another. And now SI2-graded stones comprise what would have traditionally been I1 diamonds. The loosening of grading scales has filtered down from the laboratories and through the diamond supply chain, as people have found the easiest way to keep profits intact is to widen the grading scale.

The information provided by these gemmological reports is then presented to consumers in one of three methods. One group of retailers sells diamonds by allowing customers to inspect the stone with the use of a loupe or microscope while showing them the gemmological report to interpret the details. This sales method allows the client to see how what they viewed through the microscope or loupe relates to the lab’s findings. Even though many retailers are not set up for this level of sales support, those jewellers who are able to provide it find they are able to close deals with even the most skeptical of buyers. In other words, each diamond is being sold on its merits, as well as on the report that accompanies it.

Alternatively, there are other retailers who do not provide this level of sales support and find there is still enough business to be successful. They are able to do so as there is a significant segment of buyers that is not interested in the way a diamond is graded, but rather is focused on buying a stone of a particular set of grades at the lowest price. By accessing the large network of available diamond reports, these retailers can find a suitable stone for their clients.

The final method encompasses a whole host of well-established e-tailers providing a massive virtual inventory of discounted GIA-graded diamonds i.e. stones that can’t be inspected, but are bought on the basis of a report containing findings, language, and diagrams that consumers usually find foreign and without any context. Here again, the sale is made on the basis of price, without context or useful explanation. In fact, consumers likely rank all the stones by price and simply purchase the least expensive one.

All three kinds of retailers have found themselves at a crossroads of what the next step should be. Many brick-and-mortar storeowners are re-evaluating the business of buying and holding diamond inventory, with some preferring to order stones on memo whenever there is a potential sale. Others find selling a diamond with a misstated grading report is key to keeping them afloat and in business.

Those retailers who have built their business on a full sales support-buying experience have continued to push forward and have found customers appreciate the added expertise and are willing to pay the premium. Yet, there remains increased competition with e-tailers, and as technology improves, frustration may increase. My belief is they will adopt technology that allows consumers to view the actual stone online, including all its grading characteristics. This is just another question brick-and-mortar retailers will have to address at some point and counteract. How that will happen is something we should all start thinking about now.

More to come of this story in Part 4.

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Without question (Part 2)

Is the industry becoming complacent?

Part 2 of 4

By Hemdeep Patel

Since joining the industry full-time 20 years ago, the question of standardization of diamond grading amongst all laboratories has been one for which I have struggled to find an easy answer. Though

I understand the grading policies of laboratories vary, hence the differences in grading results, the idea the industry can use the same grading language and scales to describe very different looking stones has never sat well with me. To someone on the outside looking in, they would have a tough time accepting our grading scales as logical. Rather, laboratories might suggest that grading terms are only loose suggestions of what the grades could be and perhaps the grades of three labs might be needed to average out the results for any particular stone.

To some, this may seem time-consuming and expensive. However, consider the cost of a report might be anywhere from less than one per cent to three per cent that of the average diamond sold as a centre for an engagement ring. In addition, since many of the leading gemmological laboratories are located in major cutting centres, the impact on time might be insignificant. Of course, that is not to say many stones are already shipped to multiple laboratories to obtain the best grade possible to maximize the bottom line.

As a consumer, I know I would have a hard time accepting a salesperson’s explanation of how the value or grade of any particular item they are offering for sale can be up for interpretation and is subjective in nature. And if the item for sale costs thousands, if not tens of thousands of dollars, I would tread lightly into a scenario where the selling price was based on a single grader’s subjective evaluation and would expect to be shown the merits beyond the report.

More to come of this story in Part 3.

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Without question (Part 1)

Is the industry becoming complacent?

Part 1 of 4

By Hemdeep Patel

Earlier this year, I had the opportunity to visit my daughter’s Grade 4 class to make a brief presentation on gemmology, as well as the gemstone and diamond industries. It was meant to be part of their geology studies, which they were studying at the time, and so the principle focus of my talk revolved around some of the core foundations of our industry.

In order to prepare, I jotted down basic facts regarding how gemstones and diamonds are mined and cut, as well as some of the interesting features of a few varieties. With information in hand, I felt quite prepared to educate this group of nine-year-olds on the finer points of our industry.

As the students listened to my presentation, I found myself fielding a wide range of ‘why’ questions. Why are the months of the year assigned a specific birthstone? Why are some gemstones given certain names? Now these questions led me to think of those we ask within our industry about how things are done. Though many of us have a fairly good understanding of the jewellery marketplace, I think we have entered a stage in the rapid growth of the industry where we have stopped asking some ‘why’ questions and accepted issues and trends as the new norm. And in some cases, we have refrained from asking questions entirely.

Critical questions may not have quick or easy answers, but rest assured they have to be thought about in a meaningful way, as they can have a direct impact on the success and health of our industry and by extension, your business. The most unique feature of the jewellery industry is that many wide-ranging global and local factors and trends affect the marketplace, such as how the changing price of rough diamonds or gemstones at the mining level impacts the price of polished stones; likewise, the surge in the price of gold over the last five years. Consider also how many jewellers use social media to increase their brand awareness. This is one industry where a knowledgeable member can be well-prepared to make wise choices for their business.

More to come of this story in Part 2.

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Virtual classroom (Part 4)

How online training and education can keep your staff in the know

Part 4 of 4

By Jeffrey Ross and Patti Moloney

Another important consideration is whether the training system is hosted on the cloud or is software you download. Keep in mind, software requires technical support and updates that a system hosted on the cloud does not.

Finally, you will want to ensure performance metrics are included. This allows you to track employee progress, ensuring compliance and understanding, as well as enabling you to measure the effectiveness of different approaches, such as split-testing sales techniques on your showroom floor.

The days of mammoth HR manuals and full-day training sessions are long gone. An online educational system is a targeted approach to training employees and partners, sharing information that is geared to specific skill levels and allowing business owners to track progress and compliance of the material. Whether staff is learning about workplace safety measures or marketing techniques, these systems can cultivate a deeper knowledge of your company’s products and practices, which can translate into greater customer trust and increased sales on the showroom floor.

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Virtual classroom (Part 3)

How online training and education can keep your staff in the know

Part 3 of 4

By Jeffrey Ross and Patti Moloney

There are two ways to approach an online training system for your business. The first option is to hire a third-party vendor to develop educational materials and content for your online system. The second option is the ‘do-it-yourself’ approach, where you create your own educational materials, quizzes, and content. This one is most cost-effective, especially for small- to medium-size businesses.

Next, you’ll want to shop around for an LMS that is suited to your needs. Many popular systems, such as Skyprep and Mindflash, offer free 30-day functional trials, allowing you to experiment with logistics, as well as ensure it is user-friendly and meets your requirements. It is important the system you choose supports the document types you will be working with. For instance, if your educational materials include PowerPoint presentations, images, or videos, you should be certain the system can support these formats. Determining whether you can incorporate branding elements or if the training can be accessed by an app or iPad are also important considerations.

Often, fees are based on the number of people who will be using the system. Some allow for unlimited users, while less expensive options may cap the number permitted. The most basic online training systems can be purchased for as little as $50 per month. That fee increases with the number of users required and can run upward of several thousand dollars per month. In the middle of the spectrum, you can find systems for around $100 per month for 100 users. Be sure to look for one that does not require a contract. The size of your company and number of employees or partners using the tool dictates which option is right for your business.

More to come of this story in Part 4.

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Virtual classroom (Part 2)

How online training and education can keep your staff in the know

Part 2 of 4

By Jeffrey Ross and Patti Moloney

Traditionally, business owners organized full- or half-day sessions, or after-hours meetings to ensure employees had the necessary training to carry out their responsibilities. However, this form of training can be both costly and time-consuming. Scheduling conflicts are often an issue, making it difficult for all employees to attend each training session. The training is also geared to a group of employees with differing levels of experience and knowledge, rather than being targeted to each employee’s specific training needs.

Online training and education can be a much more effective way to ensure staff is knowledgeable, current, and able to field the most technical of customer questions. While in the past online training formats were reserved for large companies with deep pockets, the recent emergence of numerous affordable learning management systems (LMS) means companies of any size can now take advantage of this beneficial tool. It’s a growing movement in many sectors—including universities, banks, and industry—to streamline the learning process, increase productivity, and track progress, representing big savings in training costs with better results.

Learning management systems have many uses, such as product knowledge, virtual staff meetings, workplace safety protocol, theft prevention, sales techniques, company culture, special offers, and new product launches. Where training used to mean taking employees off the shop floor, resulting in a loss of productivity, it can now be done in a more convenient manner.

The time-saving element of online training is immense when you consider it can be re-used multiple times. Imagine setting up content for a new hire once and simply re-assigning it for each new employee. The amount of time you can save is invaluable. It’s also a great option for companies with several locations or ones that supply products to various retailers. For example, our line of jewellery is carried by dozens of retailers across the country. Through online training, we can deliver product knowledge to multiple locations in a standardized way, while also cutting down on the time we would otherwise have spent travelling to each retailer to deliver the training in person. An online system allows us to set up the desired training once and distribute it to our retailers, thus unifying and strengthening our brand and message.

More to come of this story in Part 3.

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