In fact, low-end discounters are identified as the biggest problem facing the industry today by 24 percent of retailers. They're more prevalent. Discount department stores are not only less expensive, but convenient for shoppers who are in the store already and stop by the jewelry counter. On the positive side, discounters have opened up new markets for colored stones like tanzanite and, before that, blue topaz. What annoys retailers are the tactics used by discounters, such as artificially hiking and then slashing prices for deep discounts.
Mass merchandisers have to use a hard sell to be competitive in their market niche, says Carpenter.
They use unrealistic selling prices to discount from. Independent retailers, in turn, are combating this trend by selling goods that can't be shopped, like high-quality colored gems. Fine Zambian amethyst is going to knock the pants off something else, but a discounter isn't going to carry it. Amethyst surged to fourth place among retailers' favorites in 2000. While many American industries are rushing into e-business, retail jewelers, who have built their reputations on personal service, are approaching the Internet one click at a time.