A Primer About Subjectivity In Online Retail Diamond Prices
Traditionally diamonds are sold in a jewelry store, but as people began switching to online shopping, they started purchasing them from online diamond retailers. The biggest advantages of this are that it offers a wider selection, lower price, and is hence more affordable. Also, a customer can easily compare stones from different online dealers and purchase the most cost-effective option. This also helped to expand the market for diamonds, as well as increased their popularity. In this article we will explore online diamond retail prices; read on to know more about this.
Price Dispersion
When you search for a specific type of diamond between different retail channels, the price varies due to imperfect consumer information and asymmetry of information. This is called price dispersion and results in higher prices at traditional diamond jewelry stores. However, when purchasing from reputable diamond dealers online, the prices are lower due to minimal price dispersion. This is because the internet gives transparency by providing all the relevant information at the fingertips of the customer. As a result, there is almost no information asymmetry along with increasing product selection and availability. Besides, online stores can provide niche products that are generally not offered by physical retail stores due to their low demand.
Diamond Characteristics
As already stated, the big advantage of online diamond retail is that it provides all the relevant information in one place. All online diamond retailers allow their customers to compare different diamonds, and this is augmented with search filters. For example, you can easily search for stones based on the 4Cs of diamond quality, i.e. cut, carat, color, and clarity. These search results come with high-quality images, video clips, detailed product descriptions, and certifications; this makes the selection process easier. Moreover, reputable online diamond dealers offer money-back guarantee, easy return policies, and genuine certifications.
Price Obfuscation
The retailers, both online as well as brick and mortar stores use strategies to increase price dispersion, and thereby achieve price premiums. When it comes to online shopping, this can be done by increasing the number of windows that a customer must click-through to know the final price of a product.
The other way this is done is by providing too much information to the customer, of which the lack of understating of some of them may complicate their decision making. Here too many details obfuscate the customer’s understanding, forcing them to search less and purchase products for a suboptimal price. This is highly effective for online diamond shopping as the search results will be overwhelming, and finding the right combination of attributes becomes impossible.
We hope that this article will help you to assess the right value of diamonds when purchasing them online.