Blue Nile has now committed whole-hog to growing its fashion jewelry business—it’s hiring a design director, has appointed a new chief merchant, and just unveiled its first proprietary line with Monique Lhuillier.
At a Sept. 5 presentation at a Citi Technology Conference, CEO Harvey Kanter admitted that turning Blue Nile into a site for “non-engagement” and fashion jewelry—as opposed to just low-priced diamond engagement rings—has been “difficult.” But he said it was part of a “30 month plan” that won’t pay off until 2014. He stressed that the site wants to change its entire image, to become “less transactional and more inspiring and engaging.”
“We don’t want to be the Amazon of jewelry,” says Kanter—though now, that’s basically what the site is. “We have to have a point of view… If you are a David Yurman customer, you like what their aesthetic is. We are strongly oriented … towards developing an aesthetic and point of view in the marketplace.”
As I’ve written, this is a risky strategy for Blue Nile—yet it’s also the logical way for the site to go, especially if a looming Internet sales tax hurts its price advantage. What’s also interesting is how it mirrors larger industry trends.
Many mall jewelers were for years, like Blue Nile, just cheap places to buy jewelry. But this week, the CEO of Signet cited the company’s growing suite of brands—Jane Seymour, Neil Lane, and Tolkowsky—as one its main competitive advantages, which have led customers into higher price points. Zale is also talking more about proprietary brands.
My colleague Jennifer Heebner suggests local retailers reach out to local designers and celebrities and develop their own exclusive partnerships. Avi Krawitz at diamonds.net even argues this increase in brands may ultimately drive more business than the industry’s traditional generic marketing model. All in all, we are seeing a real change in our industry, and it’s exciting to watch.