Blue Nile gave a presentation to inventors on Feb. 26 and—thanks to this transcript from Seeking Alpha—I’ve compiled some of the more noteworthy points.
For a long while, many in the industry viewed Blue Nile as an essentially soulless site that just sold discount engagement rings by luring shoppers through SEO, well-placed Google ads, and established relations with vendors. So I did find it noteworthy that executives have finally “recognized it is a merchant” instead of just an order fulfiller. While that could ultimately turn the site into a tougher competitor down the road, it will probably be healthier for the industry overall. For the time being, executives admit, the site’s planned transformation has not come without some growing pains:
– The company is still struggling with the non-engagement market. Solution: more diamond jewelry!
“In non-engagement, it didn’t work out all as we had anticipated,” said CEO Harvery Kanter. “When we grew fashion, non-engagement, we went after things like gems.… And so hindsight 20/20, we had the customer tell us they wanted more diamond jewelry. The velocity of diamond jewelry was better, the productivity was better.”
– The company is becoming more of a retailer.
“In the past, we didn’t necessarily have deep merchandising capabilities,” said CFO David Binder. “And so when we relaunched our strategy at the beginning of 2012, we in part recognized that we are a merchant, and as we broaden the products that we sell, we need retailers. We need people, merchants who can use [analytic] data in a different way to broaden the assortment, and then came Harvey.”
– Its much-heralded Monique Lhuillier line: doing pretty well.
“Monique Lhuillier has been a really phenomenal success story,” said Kanter. “The very first week she hit we sold 21 units and that doesn’t sound like a lot. But when her average price point is $8,000, $9,000, it’s a meaningful number. The 21 units were comprised of 13 units of bridal engagement settings and 8 units of bands, and that in and of itself is normally a one- to three-month process. But customers knew she was on the site and the minute she hit it sold.… [W]e’ll actually launch some small level of fashion jewelry with Monique in the second half of this year.”
– More brands are coming.
“We don’t have a vision that we’ll be 20 or 30 brands,” Kanter said. “We don’t have a vision that it’s only two or three.”
– The company will add content to its site:
“We have a belief that content and being a website that is more than just a, for lack of a better way to say it, a website that hawks goods,” Kanter said. “We can become a really highly engaging place to spend time.”