Spence Diamonds has aggressive plans to expand its footprint across North America in the coming years.
Eric Lindberg, the company’s executive chairman, told Retail Insider that Spence Diamonds definitely has plans to grow the business to other places bringing its offering from the current 10 stores to up to 40 to 45 locations across Canada and the United States.
“There are a lot of diamond retail operations in North America already that are pretty well entrenched in all of these markets. There’s not an area where there’s an obvious gap in terms of the ability of diamond retail,” said Lindberg.
“But as we have taken a look over the course of the last three years, the diamond retail buying experience this is really one of the most retrograde retail experiences that still exists really sort of largely operating in a 1950s and 1960s approach – the very highly adversarial nature of retail that operated back then. And today outside of diamond retail, and probably used car lots and mattress stores, there aren’t a lot of other areas in retail that haven’t been turned into a positive experiential customer first environment.
“Our intention is to bring that level of modern retail experience . . . over the course of the next four to six years to every major market in North America.”
Lindberg said the company’s desire to grow its footprint is driven not by the need for more diamond retail in general but because it thinks the industry hasn’t adapted to serving younger customers, providing a great experience in the store and providing the types of products and services that modern customers expect today.
Spence Diamonds was founded in Vancouver in 1978. It currently has 10 stores – seven of them, the early generation stores, are in Canada with three in the Greater Toronto Area, two in Vancouver and one each in Calgary and Edmonton. Newer generation, experiential-focused, stores are operating in the Silicon Valley in California, Scottsdale, Arizona and Austin, Texas.
The American stores opened within a few months of each other about 18 months ago.
Lindberg said there is speculative talk in the media that younger consumers are migrating away from diamonds as a mark of engagement, marriage or other activities. But he said demand for diamonds remains very, very strong.
The company’s success recently is due to its initiative to modernize its customer proposition.
“In 2017, when we deployed a whole host of improvements in the Spence experience, while the rest of retail was flat and declining, we saw a huge same store sales increase last year, particularly around our bridal sales,” said Lindberg. “You can generate tons of growth in retail if you’re obsessed with making your customers happy and with meeting their needs which is what our entire business has been changed into being focused on.”
Part of that includes Spence’s Artisan Created Diamonds. The company says it is the only diamond retailer in the U.S. and Canada to showcase both Artisan Created Diamonds, which are man-made in a laboratory setting, as well as earth-mined diamonds side-by-side, offering customers the most extensive diamond education and choice.
The Artisan Created Diamonds are indistinguishable from earth-mined diamonds. They display the same chemical and optical properties because the technology used to create them replicates how diamonds are formed in the earth.
Lindberg said Artisan Created Diamonds are always at least 25 per cent larger and are of a higher quality by two clarity grades than a similarly priced mined diamond.
He said Spence offers more than 2,500 engagement ring styles that can be made with both Artisan Created or earth-mined, or rings can be customized and designed from scratch.
“Our manufacturing studio in Vancouver can now make a customer any ring,” said Lindberg. “Spence very uniquely is vertically integrated and so we can, on the ring design side, make anything that a customer wants in about a 10-day period which is really unprecedented anywhere in mainstream diamond retail.”
He said the rest of the industry has had “its head in the sand” regarding the Artisan Created Diamonds as four to five years ago the science behind manufacturing diamonds finally reached the point where in a laboratory environment the industry was able to create diamonds that are of gem grade.
“The technology is really amazing. It is an extraordinary process by which over a 12-week period we’re now able to create diamonds that are indistinguishable that are physically identical to mined diamonds,” said Lindberg.
Starting about a year and a half ago, Spence made it a standard policy to encourage customers to look at all options of diamonds.
“We only began selling the Artisan Created Diamonds a year and a half ago and the customer adoption I would say has absolutely shocked us the degree to which both Canadian and U.S. customers when presented with those choices people have gravitated to the Artisan diamonds at a rate that I think is really unprecedented for any new product type like this . . . It is unbelievable how much consumers love the Artisan Created Diamonds.”