Hearts on Fire on why it is ditching the lab talk and the Four Cs.
The Four Cs are commoditising the diamond jewellery business, according to Hearts on Fire. Instead of selling on stats that can easily be written down on a piece of paper and taken to a competitor, why not sell a diamond by its looks and retain a point of difference that is not so easily transferrable? Rachael Taylor reports.
The Four Cs were developed in 1953 at the GIA by Richard Liddicoat to offer a universal system for comparing the quality of the diamonds. In modern diamond jewellery retailing the Four Cs are omnipresent, but this is not always a positive according to some in the trade.
When the Four Cs started to be used by consumers to make purchasing decisions this was hailed as a revolution that would help consumers to understand what they were buying and so help jewellers clinch sales. As a result it is rare now to find a jeweller in the UK that does not promote Four Cs education online or in stores.
But there are those in the jewellery trade that believe that the Four Cs are no longer as beneficial as they might once have seemed, with the system causing further confusion among consumers and also backing retailers into a corner where they have to compete on price, treating diamonds as a commodity rather than an emotionally driven purchase.
“At Hearts on Fire we are moving away from commodity talk that drives down our prices,” says Hearts on Fire key account manager Kevin Sweeney.
The US diamond jewellery brand, which has 38 points of sale in the UK, works with ideal-cut diamonds that typically carry a 15% premium compared to diamonds of a similar, clarity, colour and carat. Sweeney claims that Hearts on Fire only works with “the best type of rough” and uses this to create classic round brilliant diamonds cut to a frighteningly high level of precision to ensure that all important ideal cut. “Less than one 10th of a percent of all diamonds can be a Hearts on Fire diamond,” says Sweeney. “50% of the value of a diamond is in its cut, the cut is what enhances it.”
Because of this stringent quality control process, Hearts on Fire feels that selling diamonds on lab grading terms is irrelevant to its brand; instead, says Sweeney, it wants retailers to sell the jewellery on emotions and rely on the sparkle of the stones to make sales rather than the Four Cs.
“For too long customers have bought diamonds on how they sound, not how they look,” says Sweeney. “When we sell diamonds, we sell the Four Cs, not the emotions. We give them a formula that they can write down on a piece of paper and take somewhere else.”
Sweeney believes that by cutting out the lab talk, it makes it harder for consumers to directly compare diamond with diamond, and so price with price. In the US, the brand’s domestic market, competition has become so stiff that retailers have been known to sell diamonds at cost price just to make money on the setting, and this is something that the team at Hearts on Fire is hoping UK retailers can avoid.
“Every diamond is unique, like snowflakes, but to our customers every 2ct GSI is the same,” explains Hearts on Fire sales manager for the UK & Ireland David Hartley. “So what are our customers doing? They are undercutting each other.”
Instead of competing on price, says Hartley, retailers can look to diamond products that offer elements that are not easily transferable, that have added value of some form that makes them less easy to price check on Google.
Hearts on Fire is not the only brand using the promise of superior cuts to create this extra added value. Diamond brands such as MasterCut and Leo Diamond have gone a step further to create their own special cuts of diamonds with an increased number of cuts that the brands claim offer a superior return of light. Again, this is an extra feature that makes it hard for a consumer to take the specifications down on paper to a rival jeweller in the town, or indeed online.
While Hearts on Fire promotes its ideal cut as a key selling point, it says that it is not interested in developing special cuts and will continue to focus on the traditional brilliant round cut. Hartley says that he believes that such modern cuts are designed to “benefit the cutter as cutting close to the rough loses weight”. He adds: “A lot of these extra facteted diamonds have a lot of extra weight in the bottom.”
However, he does go on to say that the rise of branded diamonds has benefited the industry as it brought about an awareness of branding in general in the diamond sector, which is a strategy that Hearts on Fire is hoping to capitalise on as it plans to “become the Rolex of diamonds”.
The Hearts on Fire team accept that branding can often be greeted with cynicism as being a gimmick, which is why the brand is working closely with retailers to offer in-store tools that show off the benefits of buying a Hearts on Fire diamond. It has a wealth of information and in-store videos, but the team’s favourite tool is something called the “two-minute wonder”. The brand encourages retailers to hold a loose Hearts on Fire diamond in stock and show it under a water-based magnification tool that shows off the pattern of eight hearts on the back of the diamond that demonstrate a superior cut.
It is a simple trick, one that Hartley and Sweeney say retailers do not utilise enough, but is so effective that the duo claim that 98% of people who buy a Hearts on Fire diamond never buy from another source again.
The brand is predominantly popular in the US, where it has a dedicated following, and is continuing to push into the UK while simultaneously refreshing its offer. In the past the brand was very focused on producing single product designs, but now it is moving into creating collections that centre on a hero piece but fan out into other price points and designs.
Heading up the creation of this collection is designer who has worked at Garrard and Stephen Webster and is predominantly designing non-bridal jewellery in yellow gold. Sweeney says that the collection is already popular in the US, but admits that it will be a struggle in the UK where he says that between 80% and 90% of its market is still dominated by wedding jewellery.
But be it a diamond engagement ring or a yellow gold diamond pendant, Hearts on Fire says that its primary passion is to change the way that diamonds are sold, throwing out the lab talk and buying with eyes and hearts.
As Hartley surmises: “We buy meat and potatoes by weight. Why should we buy diamonds by weight? We should buy them by how they look. The Four Cs are commoditising the industry and the only people that win are the consumers.”
This article was taken from the September 2012 issue of Professional Jeweller magazine. To see a digital version of the issue click here.