Blue Nile’s Second App—and Why It’s Important

Blue
Nile unveiling its second mobile app
this week hasn’t received a lot of
attention in the industry—but perhaps it should.

Many years back, there was considerable
debate
over whether shoppers would buy jewelry online. After all, didn’t
shoppers want to see and feel their jewelry? Would they really buy such a
high-value item on the Internet? And wouldn’t selling online “cheapen” a brand?

In the years since, all these questions have resolved
themselves. Yes, most consumers want to see and feel jewelry, but enough want
to buy online that Blue Nile now does over $300 million a year in business. And
enough luxury names now sell online that it’s silly to talk about a brand being
“cheapened.”

But even today, most of the industry’s big names have not
made e-commerce a big priority. On a recent list compiled by Internet
Retailer,
Blue Nile did double the e-commerce business of
its nearest jeweler competitor, Tiffany
. The rest of the big names in the industry didn’t even come close. However, lately it seems some mass-market jewelers have woken up a bit. For all everyone has said about Zale, the company
deserves credit for becoming aggressive with its Internet site. (Zales.com
was recently hailed as one of the company’s best-performing divisions
.)  And Sterling’s
hiring of a new head of e-commerce
may signal the company is finally
getting more ambitious in this sphere. Yet the sector remains largely dominated
by Blue Nile and other pure-players like Bidz.com—who saw an opportunity, and
took it. “The brick-and-mortar people
left the door open,” one e-tailer told me, in
a story I wrote 10 years ago

And now, we come to m-commerce, which, many feel, has the
power to be
just as transformative as e-commerce
. Blue Nile’s new app considerably
expands its offerings to include a lot more jewelry listings. And it’s done
well with its first app; it now drives 25 percent of its traffic, and according
to CNBC,
the average Blue Nile mobile “shopper spends about 10 percent more than a
traditional Web shopper, and their iPad shoppers spend about 62 percent more
than a traditional Web shopper.” It’s also given the site a reach it never had
before; in one case, a customer even bought a diamond from a ski lift. 

Now many traditional jewelers are still getting their heads
around consumers buying diamonds from ski lifts. But if people want to buy
from strange places, why should they be questioned? As Ellen Davis of the National
Retail Federation recently told me in an interview: 

Consumers today want to have the
exact same experience with your business whether it is in the store, on your website, or on their phone. They want to be able to know pricing, they want the same service, they
want to be able to do returns. They will shop when and where it’s convenient
for them. And if you don’t meet their needs, they will go somewhere else.

Very true. Yet, while Blue Nile has already released its
second app, most of the big names in the jewelry business haven’t even released
their first. Tiffany
does have one
, and it’s beautiful and impressive, but in most cases it
doesn’t even list item prices or give consumers an opportunity to buy (which
has become a big compliant among reviewers on ITunes).

The upshot is, once again, Blue Nile—and other “pure play”
sites like Whiteflash and James Allen—mostly
have the growing m-commerce sector to themselves. History may be repeating itself. 

JCK News Director