March 05, 2008

Blue Nile

Ok mulitchannel folks, you didn't have many ideas for how to grow Orange Julius into a multichannel brand.

So what do you think about Blue Nile, the online purveyor of jewelry? The leaders of our industry strongly believe a brand needs to be multichannel. Blue Nile doesn't have a catalog, doesn't have retail stores, and yet, built a credible business.

How would you explain their success in an environment that experts believe favors multichannel strategy?


5 comments:

  1. I’ve never heard of Orange Julius or Blue Nile, although I like the color theme you’ve got going on. ;-)

    Your questions did make me curious enough that I looked up the location of the nearest Orange Julius. They have a handy-dandy map feature on their website. Based on that result (you can see my location at the red star), I won’t be hopping in the car for a smoothie. It’d be interesting to see what else might work for them, though, and I hope you’ll hear some ideas about that.

    For Blue Nile, I ran an advanced Google search to see who’s linking to their website. Blue Nile ranked very high (fourth place) in Future Now’s 2007 Retail Customer Experience Study. They were looking at things like quality and detail of the website images, the effectiveness of the product copy description, the availability of customer reviews, the ease and simplicity of checkout, clarity of return policies, and a bunch of other stuff that can be read at the link.

    Offhand, I’d say that’s probably relevant to the issue.

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  2. Anonymous9:21 AM

    I hadn't heard of Blue Nile, but when I visited the site I was immediately blown away by the quality of the Web 2.0 selection process for diamonds. They site is designed to immediately gratify consumers with everything they'd need to know to make a purchase. I'm left wondering how they could replicate the experience in a bricks-and-mortar storefront without a huge outlay in sales training and QA. This site's appeal, like that of Amazon, cannot be replicated in the real world.

    Thanks for another provocative post, Kevin!

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  3. Blue Nile has a good product and good customer experience. Set against the negative perception of the mall jewelers, it's easy to see why they've been able to succeed in web only. BN offers customers speed, shopping on their terms (i.e., no cheesy mall sales guys), and no pressure to buy.

    I imagine their customer profile skews younger than the mall jewelers too, which would support web only success. The techno geeks need a place to buy engagement rings and the like too.

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  4. Blue Nile. Interestingly, this is a company I first heard about in 2000 - when they were pretty fresh. They were using direct mail to acquire customers offline..in this case a marvelously creative book of tips for men - how to carve a turkey, how to get a table at a tough restaurant, and how to pick a diamond (naturally). I don't know how the piece did, but it was the most impactful piece of direct mail I'd ever received (okay, my father received it, but I rescued it from his stack of mail).

    I would also agree with all of what stagie said. But you still have to get people to your site.

    In addition to effective use of search, early direct mail success and a great site side experience, BN provides a fulfillment experience that turns customers into ambassadors (key for the jewelry market as it is a low frequency marketplace).

    I have personally found that BN offers a better value than brick and mortar jewelers (I once bought pearls for my wife from three different places - the Blue Nile pearls were the best strand among 4 jewelers, and also happened to be the least expensive). The post-sale experience was tremendous - overnight fulfillment (included in the price), unhindered no-charge return policy.

    These are all huge drivers of word of mouth and strong brand reputation. In that sense, this is a company that could really make hay in a social media context.

    Wrap all of these factors together with a high margin, and reduced costs around retail square footage and you end up with a great pure-play business model.

    It should also be noted that the number one retailer - with sales that are double the number two - is also a pure-play online retailer. I don't think Amazon has plans for a catalog or retail outlet anytime soon.

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  5. Looks like our commenters have determined that it is good to be an online pureplay in this case!

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