Jewellers play catch-up with online sales tactics
Diamond jewellery retailers are under pressure amid a big shift in online buying habits
Traditional diamond jewellery outlets in the US have to find ways to innovate their sales strategies using online platforms as smaller sellers use the medium to great effect, according to the Rapaport Monthly Report.
Rapaport, the leading provider of index prices for polished diamonds and an important source of diamond market insight, said the supply of rough diamonds from the two main miners, Russia’s Alrosa and Anglo American’s 85% held subsidiary De Beers, had slowed in May and prices had increased for rough diamonds.
Further down the market pipeline, in the retail sector, there were significant changes for traditional diamond jewellery sellers, the report said.
"General retail has seen a drop in mall traffic as shopping habits have evolved, particularly affecting department stores such as JC Penney, Macy’s and Saks. Traditional retailers are still acclimatising to the shift towards online buying, which has gained greater traction in the past two years — and the momentum is expected to continue to strengthen," it said.
De Beers appeared to have curtailed the size of its offering of rough diamonds to buyers, "earmarking a greater proportion of goods for its joint venture with the Namibian government", Rapaport said.
De Beers said it had recorded sales of $520m in May, the fourth of its 10 annual sales, down from $636m a year earlier.
"We are continuing to see steady demand for rough diamonds despite the industry entering a typically quieter season," De Beers CEO Bruce Cleaver said in May.
"This raised the perception of shortages at the May sight, which was the first under the new arrangements," Rapaport said, pointing out rough prices rose an average of 1% to 2%.
After selling its stocks of lower quality rough diamonds it had built up in 2016 by lifting first-quarter sales 17% to 14-million carats, Alrosa, the largest producer by number of carats, held back on fresh supplies to buyers, Rapaport said.