Like so many industries today, the diamond sector continues to struggle with supply chain digitization. The process of B2B procurement between diamond vendors and jewelry retailers is often stuck on legacy processes like phone calls, emails and paper check payments, creating the same kinds of bottlenecks and inefficiencies that plague other markets.
What’s unique about the diamond space, however, is that there is an opportunity to drive value through the digitization of B2B commerce that goes beyond the electronification of documents or the streamlining of processes.
According to Anmol Bhansali, director at Goldiam International, the evolution of the diamond sector’s B2B eCommerce adoption journey has created new opportunities to strengthen the competitiveness of small and independent jewelry retailers. Speaking with PYMNTS, Bhansali explains how more optimized digital procurement workflows are leveling the playing field between small buyers and the largest jewelry retailers, and discusses the avenues through which the diamond market maintains supply chain trust in a digital environment.
A B2B eCommerce Evolution
The diamond sector isn’t a total stranger to digital procurement. Today, the B2B eCommerce model has secured relatively high penetration as wholesalers embrace online platforms to display their product offerings.
But this initial phase of B2B commerce digitization has left plenty of gaps that keep inefficiencies in place.
“Within this traditional model, there is a plethora of wholesalers that have listed products, but don’t have transaction or customization capabilities,” explained Bhansali. “The transaction is still done offline, through phone calls or order processing via email.”
Unsurprisingly, this strategy also means paper checks remain common, which Bhansali described as a payment method that is neither healthy nor sustainable for the sector. Goldiam is looking to participate in the next phase of B2B eCommerce for the diamond supply chain, having recently announced the soft launch of its U.S. B2B eCommerce operations, dubbed Jewel Fleet.
As Bhansali explained, the platform not only displays products, but can also support customization of those products based on diamond quality, metal type and more, with customized pricing in real time as well.
Leveling The Playing Field
Among the most impactful features of this second phase of B2B eCommerce adoption is the capability to complete transactions online. While B2B eCommerce portals use a variety of payment methods to facilitate transactions, Goldiam has integrated Stripe to facilitate credit card transactions for its retail buyers.
Not only do cards support the digitization and integration that the industry seeks, but they also level the playing field for smaller, independent jewelry retailers that have historically struggled to access competitive prices available to the industry’s largest retailers, like Kay or Zales, thanks to the strength of their credit histories that enables lower rates.
“This has led to a multi-decades-long market share loss from the independent retailers toward major retailers,” said Bhansali.
Card payments, he continued, mitigate risk for both buyers and suppliers, enabling vendors to provide discounts to their customers without taking on trade credit risk.
“Regardless of who, how or where the retailer operates, how well it does or what their credit score is, the minute the transaction goes through, we confirm the order,” Bhansali added.
Fostering Supply Chain Trust
As the diamond industry continues to digitize procurement workflows, there are other factors unique to the sector that will have to endure some problem-solving.
For example, this industry is particularly susceptible to fraud and other supply chain risks. For diamond buyers, it is imperative that suppliers can prove the quality of an item and verify that it has been obtained in compliance with international laws and standards related to everything from quality controls to human rights protections.
Historically, it’s been important for purchasers to attend trade shows and view products in-person. That’s not necessarily going to go away, particularly when it comes to working with newer suppliers, said Bhansali.
“I wouldn’t say trade shows are a thing of the past, but digitization is rapidly growing, and an important trend,” he said, adding that digital B2B platforms like Goldiam’s are implementing new ways to foster trust with potential buyers in a digital format. Features like high-resolution images and product certificates are essential not only for B2B suppliers, but also for the retailers themselves to also drive up product interest with customers.
In this way, the ongoing B2B eCommerce evolution of the diamond ecosystem continues to foster digitization in the industry’s B2C arena as well.
“Digitization on our end is a growing trend, but it’s also important on the B2C side,” Bhansali noted. “Retailers want to have their customers visualize a product before they make a purchase. That’s a partnership opportunity we have.”
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