Blue Nile at $125M revenue.

[pricescope]

Many online diamond dealers report soft business in the recent months.

In the meantime Blue Nile revenue has grown almost 180% to $125 million this year from $45 million in 2000.

Full article in USA Today: He turned Web site in the rough into online jewel

 

[Mara]

Congrats to Blue Nile...great revenue goals met!




Interesting close on the article from the CEO Vardon:




"We don't understand why anybody would buy anywhere but with us."




Hmmm....maybe I should send him an email and let him know about the IdealScope and Bscope. Also to make Sarins more available. Don't make your customers request more information on stones you have in inventory...put them up for all to see so that when they call you to inquire about a stone, the sales process is shorter and you have a more serious customer.




Not to mention inventory....and quality of cut. Those would be reasons. BN doesn't carry true H&A much less superideals..etc.

 

[in_need_of_help]

Everyone knows of BN. They must spend a great deal on marketing. However, their prices are very high, perhaps to pay for the marketing.

 

[Looking4stone]

Would you not reccommend BN? What sites offer the best value for the diamond?

 

[Arlington]

----------------
On 11/7/2003 3:09:34 PM Looking4stone wrote:

Would you not reccommend BN? What sites offer the best value for the diamond?----------------

Several people have posted positive reviews of Blue Nile here on the forum, I wouldn't just dismiss them out of hand. However, there appears to be some anecdotal evidence from recent shoppers that they charge a bit more than some other online vendors for similar stones. I can say that when I was shopping for a diamond a few months ago I found them to be a bit less accomodating than some of the smaller fish in the sea who spend a lot of effort making sure they are selling a quality product (Whiteflash, Good Old Gold in particular). But that was just me.

Value is nearly impossible to quantify in my opinion because people place value on different things. Some shoppers place great value in Tiffany diamonds, others believe them to be overpriced. Some people prefer a super-ideal, branded Hearts and Arrows diamonds and it gives them value to pay a bit more for it; while others think it's simply not worth it for them.

You aren't, by any chance, an accountant are you? PLEASE say no!

 

[aljdewey]

----------------
On 11/7/2003 3:33:16 PM Arlington wrote:




You aren't, by any chance, an accountant are you? PLEASE say no!

----------------

LMAO......!!!!!!!!! I second that wholeheartedly! Say it ain't so!

 

[Chrisk327]

BN has a lot going for it. People here cite high prices. However, compared to a normal B&M or mall store BN has great prices. Yeah you can find stones cheaper on the internet, but its not always that easy.

We here have a forum and venders on here have developed a trust with those of us who lurk here. However, most people don't go here, don't research hard, and won't spend the time to develop enough trust to make the leap to buy a $$$ purchase from a small operation over the internet.
BN has advertised enough and established enough of a presense to make normal people take notice, as oppose to the obsessive people like myself, who research to death.

As for the posting of Sarins and idealscope images ... yeah it would be nice. However, a bunch of venders here don't put that online either.

I may go for a blue nile diamond or i may not. Having recieved a lot of info and benefit from this forum I would like to give my business here if the numbers, stone and setting work out. But as a business I admire BN

 

[Mara]

----------------
On 11/7/2003 4:56:37 PM Chrisk327 wrote:





As for the posting of Sarins and idealscope images ... yeah it would be nice. However, a bunch of venders here don't put that online either.

----------------

In actuality, most of the online vendors who frequent this forum do have stones on their site that have Sarin reports and Scope images. Some have ALL their diamonds with this information, most have some. Just wanted to clarify....almost all of the vendors I recommend have some form of Sarin or Scope or actual diamond images on their sites--most have all of the above. BN in comparison gives you the GIA or AGS cert as a popup, and then makes you request all the other information. Not a huge deal IF they have it.

But ANY company that has it...in my opinion...not just BN...should post it. Full disclosure!

 

[canadiangrrl]

BN has successfully captured the guy who wants to know "just enough." I would wager that the majority of their e-ring customers don't ask for Sarins or IS images. But in theory, if they do indeed have the info, why not make it available?

 

[Chrisk327]

I had only checked out like a few before the post, some had full info, some didn't. I shouldn't have generalized on a small sample.

Anyway, full disclosure costs money, which is why they don't do it. Granted I'm interested in full disclosure, but most people I would guess are not. In concept everyone wants everything disclosed. In practice, 95% of the population doesn't know enough to understand and it would just confuse them. There are a lot of "just enough" guys i bet.

 

[stephcola]

I thought I'd share my very positive Blue Nile experience with all the naysayers. I began my diamond journey in August after my 3 ct. engagement ring was stolen. I had a reasonable insurance settlement as my ring had been recently reappraised.

I wanted a quick resolution and started with local B & M stores. I knew I wanted atleast 3 ct. round and I thought an (I) color or better. My stone was appraised as an (I) SI1 and I now know it was either a spectacular (I) or an (H).Everyone tried to sell me stones I did not want. Too expensive (just add a few thousand $$$...), or too small, not the right color and finally too included. Before I found Pricescope, I did purchase a stone locally, and returned it - Thank Goodness!!! It was an EGL, large table, (I) probably (J), SI1, probably SI2. They gave me the whole pitch - threw alot of terms I was unfamiliar with and boom. The only smart thing I did was make sure of their return policy. I returned the ring and searched again. This time I did go on line and found Blue Nile.

I was totally impressed that a person answered the phone - every single time I called. The person who helped me the most, Steve was a gem. Noone could be more patient than him. I am certain I drove him to drink but he never let on. All the customer service people were very courteous, knowledgeable and incredibly patient with me. I had them pull several stones and made many, many gemologists examine them and explain in detail over and over again ...where the flaws were etc. I liked the fact that they own their inventory so they can eyeball the stones for you.

I looked at the GIA cert and did some number crunching and boom. I had a beautiful stone. I decided to return it, however, because I was able to see the yellow tint in the (I) - the stone was 3.38 ct. so maybe the size had alot to do with it.They did not recommend the (I), I asked for it. The return was simple and painless and the search continued.

At this point, I had read the tutorials, and read the forum posts daily. I did alot of homework and learned alot. I also contacted several online vendors about stones and was also treated very well. I will say that I kept being told that it would be very difficult to find what I was looking for in my price range. I travelled to view stones and continued to look at the local places - just for experience.

Well, Blue Nile came through for me again and I am thrilled to report I am wearing my ring, finally today!!!! I am certain that I have gotten the absolute best stone I could find within my parameters. Everyone on the forum helped with diamond calc, HCA , etc. and it came in at 1.2 FIC. The stone is a 3.01 (H) SI1 (which I am certain should have been a VS2 because you can barely (barely) see the pinpoint inclusion near the girdle _ even with a 10x loupe. It is virtually eyeclean at 10x!!!

The table is 54 and depth 60.9 and it is white and very fiery. The stone looks an awful lot like the photos of the 8*'s on the web!!!This stone came in slighly under my budget. I was told it could not be done and I did it!!! Blue Nile provided me with the Sarins and all the other info I needed to make my decision. I found their pricing to be less than all the online vendors for similar stones.

There is a reason Blue Nile has been so successful. Keep in mind, I would have gladly bought a stone from several of the well known online vendors, they just did not have anything that fit the bill at this time.

I would totally recommend Blue Nile to anyone but would advise to do your homework first. Thanks a million Steve!!!

 

[canadiangrrl]

Stephcola, I don't get the impression that there are a lot of BN naysayers in our midst.

I like BN, although we never considered buying from them. Their website is easy to navigate, their settings are pretty, they have a lot of inventory, and their information is reasonably good (although it lacks the necessary upfront info that many of us are looking for.) But they will provide Sarins on their stones and from everything I've heard (I have two girlfriends whose e-rings are from BN) their customer service is terrific. If you're not seeking very detailed information and B'scope, Firescope, and IS images/reports, BN just might do the trick.

So why didn't we give serious consideration to buying from BN? Price. Their price points tend to be 10 to 15 percent higher than other diamond e-tailers. We were able to find a far better price for what we were seeking than we could've found at BN. In your case, you were searching for something a little out of the mainstream - a 3 carat diamond. The fact that they carry such a huge inventory enabled you to get what you want, when you wanted it. But I wouldn't recommend them to someone who's seeking a superideal, incredibly detailed cut information, or something in the more mainstream carat range. There are other online vendors who can better satisfy those needs at a more reasonable price point.

 

[Garry H (Cut Nut)]

125 million divided by 60 billion = 2% (or is it .2%) of the diamond jewellery market.

Damm good effort I think.
As to knocking their disclosure and info they give out - what about Tiffany et al ?

 

[aljdewey]

I think there are a lot of good points here by several.




BN is slightly higher priced, but the tradeoff to that is more selection. They don't provide as much information up front, but in fairness it becomes more difficult to do that in volume just from a sheer labor standpoint. Further, (and David has made this point a few times), those of us who are cut FREAKS make up a *segment* of the market.....and though growing, that segment is a minority. BN is running their business smartly.....why spend a lot of money/effort to put up information that doesn't interest 75% or more of the marketplace? That money is instead dumped into advertising, and that seems to be a smart choice on their part.




Keep in mind that BN's target audience is broader than vendors who serve a niche of the market (cut freaks) like NiceIce, GOG, etc.....although there is some overlap. Some folks who want well cut stones are also BN customers, and they carry some inventory to satisfy that segment, and they do provide the numbers, etc when asked.




Steph, I honestly don't think it's "naysaying" to recognize differences in vendors. No one is disparaging BN; they do very well with the market they serve. The description "higher priced" isn't an insult.....in some cases, "higher priced" means better stuff! (though not always).

 

[Mara]

Blue Nile definitely has one up on other sites like Diamond.Com or a Mondera...if I were to purchase from a mainstream (e.g. Target type) diamond vendor, I would choose Blue Nile. People should definitely consider them when they are searching--but recognize that they are larger and more mainstream and to me that means slightly less personal attention (then again I am just very demanding!!).




Blue Nile does offer Sarins and some items on some of their stones, which not all other mainstream type companies do. However, I just feel for ANY vendor who carries that diamond in inventory, whats the harm in posting a report or even the #s? If you have a Sarin (and most probably do), how much longer does it take to post that information when you are creating a product page? Let me answer for you from a web production perspective. All of 2 seconds. How about getting a Sarin done for those who have the machines? All of 10 minutes? So we have....10 minutes & 2 seconds to add extra information on a stone that could net you the sale of say..average $5k. Not bad from an ROI perspective!




SuperbCert has an excellent model from an ease of use and visibility perspective--they list the crown and pav angles in their little product information chart (as well as a link to Sarin) on their product page, why can't sites like BN do this? It's a few extra characters of data entry for those who do want those numbers (2 seconds of data entry!). It would add credibility to them for those of us who ARE cut-nuts and give people who are just starting out another data point to use in their search.




So in the interest of 'its so much more time and effort'...I expect a company, any company, to make that additional effort in order to garner my business. I don't want to send 20 emails to a vendor to get what I am looking for. I frequently pass up websites that don't have information on what I am looking for, any website..any information. Not just diamonds. Give me what I want to see. If you aren't sure if I want to see it, give it to me anyway. Full disclosure doesn't always have to take lots of time if your production model is setup correctly.

 

[aljdewey]

----------------
On 11/7/2003 7:23:00 PM Mara wrote:






However, I just feel for ANY vendor who carries that diamond in inventory, whats the harm in posting a report or even the #s? If you have a Sarin (and most probably do), how much longer does it take to post that information when you are creating a product page? Let me answer for you from a web production perspective. All of 2 seconds. How about getting a Sarin done for those who have the machines? All of 10 minutes? So we have....10 minutes & 2 seconds to add extra information on a stone that could net you the sale of say..average $5k. Not bad from an ROI perspective!




Mara.....girl, yanno I love ya, but you're oversimplifying this issue.




10 minutes isn't a big deal on one stone..........IF the purchaser gives a crap about the information and IF it results in a sale to someone who wouldn't buy without that information. So, when BN identifies a customer who won't buy without that extra 10 minutes and 2 seconds, they gladly invest the time to procure the additional information.




BUT....... BN has an inventory of nearly 19,000!!!!! round stones. Now, even with 19,000 stones, it would STILL be a good ROI to spend that 10 minutes per stone to give the information up front IF......IF enough of their potential client based gave a rat's behind about that data, but they don't! C'mon, you do the math. At 10 minutes per stone, they'll document 6 stones per hour (sarin plus data entry). You're saying BN should spend 3166 hours!!!!! (paying someone $8-10 per hour) providing information that 90% of their market won't care about??? When 17,000 of those 19,000 stones will sell anyway without the information? (They won't sell to YOU, but the next guy's money spends just the same as yours, I'm sad to say!) I'm sorry, but that's insane, and that's not a good ROI. In fact, it can be detrimental if the 10 minutes they're spending on information John Doe doesn't want makes them unavailable in those 10 minutes to answer the questions that John Doe DOES care about to make him buy! It makes much more economic sense for their business model to provide the information when requested, as they do.




SuperbCert has an excellent model from an ease of use and visibility perspective--they list the crown and pav angles in their little product information chart (as well as a link to Sarin) on their product page, why can't sites like BN do this? It's a few extra characters of data entry for those who do want those numbers (2 seconds of data entry!). It would add credibility to them for those of us who ARE cut-nuts and give people who are just starting out another data point to use in their search.




This comparison to Superbcert doesn't work because they aren't the same animal. Superbcert carries a round inventory of 290 stones, and their niche is "cut freak" stones, so a much higher percentage of their market desires this information. If 10% of BN's market is educated, I'd hazard a guess that more than 50% of Barry's market is educated and focusing on cut quality. Totally apples and oranges here.




So in the interest of 'its so much more time and effort'...I expect a company, any company, to make that additional effort in order to garner my business. I don't want to send 20 emails to a vendor to get what I am looking for. I frequently pass up websites that don't have information on what I am looking for, any website..any information.




I understand, and you have a right to expect that about YOUR business, but you need to recognize that you are not the type of customer that BN is trying to woo. You are the type of customer that GOG and WF and Barry are trying to woo, and that's why they provide the info. A site like BN doesn't give a damn that you and I will pass them over.....they know that there are plenty of other fish out there who don't want that info, and that's the market they are targeting. In fairness, they do make the extra effort to garner your business WHEN you ask for it. I realize you don't want to have to ask for it.....sometimes, neither do I.....BUT BN isn't marketing to the type of consumer that you and I are. This follows the line of "know who your market is and sell to IT".




---------------

 

[Mara]

At this point anything we discuss is just based upon assumptions. We don't have BN's financial data in front of us or know what they sell and how long it takes them to move a stone. But in general, I highly doubt they are moving 17k stones out of the 19k on a monthly basis. How long does it take a GOG to move the average stone? WhiteFlash? I have seen some stones on their sites for months. More than enough time to add some extra information in and hope it makes a difference. I don't subscribe to the 'laziness gets you the worm' perspective. Yes BN has many many more stones, but it doesn't mean that they can rest on their laurels and not make their process better. People get comfortable with their niche....but the niche often changes.




I have heard a Hearts on Fire radio commercial almost every day now for about 2 weeks on my way to work AND on my way home. They are really pitching their stones...spending some ad money...going up against something like a Shane company in order to educate the outside public on CUT and those pretty hearts and how it makes a difference. Soon we will see the numbers of people who come in asking about 'Hearts' in their diamonds rise in the general maul store. It may be slow but it will happen. Awareness is half the battle. Other vendors who offer hearts in their diamonds then piggyback off of the money that HOF is spending and sell some extra diamonds because of it. Slowly...BN's niche of online diamond buyers who don't care about information begins to change...




You think BN employees are busy all the time? That there isn't some random data entry or customer service person that doesn't play solitaire at their desk half the time? Assumptions, but based on what I know about online customer service departments and companies in general, chances are there ARE some people who could use a little extra busy work. Have them start entering some Sarin data in their spare time. Chances are BN has alot of Sarins on alot of their stones...2 seconds to data entry instead of solitaire could mean rewards down the line.




Yes BN is doing well as we gathered from the article, but they can always do better. How do you think that they have gotten from Point A a few years ago to Point B where they are today? Probably by incorporating in some additional things that tickle people's fancy. They didn't start out with the bells and whistles they have now. Probably didn't even offer GIA or AGS pictures of their reports at first. You have to find out what appeals to the customer and then supply it. Just the fact that they seem to more often HAVE Sarins when people ask for them tells me alot. They know their market is changing.




I'm not saying that they need to add in Sarin information on all 19k of their stones today. But begin the process. No one REALLY knows what the impact would be on the business until they try it. It's all speculation and assumption on our end up until we see it happen.




A similar example from my perspective would be online eMarketing. If Company A starts gathering email addresses for a newsletter update in the year 2000, by end of 2001 they have about 1million subscribers. In 2002 they decide to start profiling those customers to see exactly what sorts of things they would like to see in their newsletters. Crap..what to do now? Is it really worth the effort to go back and profile all of the existing customers or just start the process from that point on? What sort of rise in business are they going to see if they do make the effort to back and re-populate data and tailoring newsletters to people's specific interests. Nobody really knows. It's all speculation...until you begin to try it and then measure your results.

 

[aljdewey]

----------------
On 11/7/2003 8:49:23 PM Mara wrote:







At this point anything we discuss is just based upon assumptions.




What's not assumption is this: BN's business has grown tremendously by serving a market that PRESENTLY doesn't clamor for the same information that you and I do. The ideal stone market.....those who CARE about cut (or even know what cut means.....not "shape") is 10-13% of the total marketplace. Could they grow their ideal business more? Perhaps yes, they could.....they could always do better as you say......but that's not the business they are trying to catch.




Soon we will see the numbers of people who come in asking about 'Hearts' in their diamonds rise in the general maul store. It may be slow but it will happen. Awareness is half the battle. Other vendors who offer hearts in their diamonds then piggyback off of the money that HOF is spending and sell some extra diamonds because of it. Slowly...BN's niche of online diamond buyers who don't care about information begins to change...




And when that happens, IF it happens to a significant degree.......THAT's when it might make sense for BN to spend the money up front.....but not now.




You think BN employees are busy all the time? That there isn't some random data entry or customer service person that doesn't play solitaire at their desk half the time? Assumptions, but based on what I know about online customer service departments and companies in general, chances are there ARE some people who could use a little extra busy work. Have them start entering some Sarin data in their spare time. Chances are BN has alot of Sarins on alot of their stones...2 seconds to data entry instead of solitaire could mean rewards down the line.




It honestly doesn't matter if the service person plays solitaire or enters Sarin data if neither has ANY impact on the success of the sale.




Yes BN is doing well as we gathered from the article, but they can always do better. How do you think that they have gotten from Point A a few years ago to Point B where they are today? Probably by incorporating in some additional things that tickle people's fancy. They didn't start out with the bells and whistles they have now. You have to find out what appeals to the customer and then supply it.




RIGHT ON. BUT, if the Sarin doesn't appeal to 90% of the customers (and it doesn't), then supplying it gets you nothing. Zilch.




See, this is the part that you marketing types (/idealbb/images/smilies/naughty.gif/idealbb/images/smilies/naughty.gif/idealbb/images/smilies/naughty.gif) miss. Salesmanship begins when the customer says "no", and IT ENDS when the customer says "I'll take it"! That's it....end of story!




Look, I hate to use a car analogy because that seems to be the fall-back here, but here goes anyway:


I am standing in a car dealership with 9 other people. Those other nine people have CHECKS IN HAND, ready to buy RIGHT NOW. Of the 10, I'm the only one who wants to take a test drive and the only one who wants the specs on how many horsepower the car has. Do you seriously think the car dealership is going to take the other 9 people on test drives anyway before taking their checks? Of course not! When the customer says I'll take it, you take their check and stop selling!




Maybe a better way to put it........spend the next 10 hours at work. For the first nine hours, gather information that you think your boss might want. At the end of that ninth hour, throw every bit of your work into the TRASH. Now spend the last hour gathering the information that your boss wants.


Same thing. Spending time creating a Sarin for a customer who doesn't even know what the hell a Sarin is and doesn't care to learn is just a waste of time.

----------------

 

[hoorray]

Interesting back and forth on this. You are talking about 2 different spaces. Mara is in the business of changing people's behavior in the way that they shop/buy. Al seems to be talking more about making the sale within today's way of doing things. Both are right, you just have to decide as a business which space you are in and I think BN has to do both. Internet shopping for diamonds, as well as informed customers looking for details that were never before anything they even knew about, is all new for the diamond industry. Yet, BN has to grow their business now on lean margins, rather than experiment around with better ways to do things. There is low hanging fruit to be gotten right now by just beating the B&M's on price and tax. I'd bet that many of their customers don't even know about the quality differences. I think their challenge is to stay ahead of the curve, and evolve their site and info more rapidly than their customers' needs, but not so far out there that the investment doesn't pay for itself in the short term.

I say...more power to BN for their growth. I hope the others give them a run for their money so that they have to get more proactive with their info, and the customers continue to get smarter. Sarins and Certs are a bare minimum in my opinion, but I've read more than the average diamond shopper, and still only scratch the surface.

 

[Mara]

Could they grow their ideal business more? Perhaps yes, they could.....they could always do better as you say......but that's not the business they are trying to catch.




That is actually not true. From the CEO's statement at the end of the article, which I quoted, he wants to catch ALL business. He doesn't want anyone to shop elsewhere. That is what prompted my original statement of...well add X and Y and you may get closer!






Soon we will see the numbers of people who come in asking about 'Hearts' in their diamonds rise in the general maul store. It may be slow but it will happen. Awareness is half the battle. Other vendors who offer hearts in their diamonds then piggyback off of the money that HOF is spending and sell some extra diamonds because of it. Slowly...BN's niche of online diamond buyers who don't care about information begins to change...




And when that happens, IF it happens to a significant degree.......THAT's when it might make sense for BN to spend the money up front.....but not now.




So it's wait until there is a problem and then act reactively to it? So many companies think this way and they spend all their time putting out fires. We do this here at my company all the time and then flog ourselves on the back because we don't think of things ahead of time. By acting PROACTIVELY they can be ready if/when it happens, esp if it takes up someone's time who doesn't have enough to do anyway (e.g. solitaire online customer service players!). If you are paying that person regardless, have them do the work that MAY net you that 100% business that you want. That this CEO wants. Think outside of the box. We're not talking about the Shane Company here. This is an ONLINE business who has to think outside of the box and their niche in order to see their business grow. The online researchers who are surfing for diamonds DO care to learn more, or else they would be at Tiffanys or the random B&M plunking down their $1999 for that 1c stone. They may not care to know every detail, but they care enough to log onto google and type in 'buy diamond'.






Spending time creating a Sarin for a customer who doesn't even know what the hell a Sarin is and doesn't care to learn is just a waste of time.




That is what you non-marketing people don't understand (

)...its all in how you PITCH it. You think BN would put Sarins on their diamonds and say..hey checkout this cool Sarin? What the hell is a Sarin? Exactly. They would have to educate their customers and they get enough site traffic to do it right. We are assuming that people don't care to learn--which I don't think is true. Studies show recently that millions of people come online just to do research on a purchase..any purchase. I think that when you put information in front of someone, they tend to read it. Especially if they are running an online search, even if its only to compare pricing. They read it. Even if they don't care about what it says or intend to use that knowledge. Awareness is key..again. Especially if you want that extra business. And this CEO does. He doesn't want them to go anywhere else. I want him to put his money where his mouth is and stop reaching for that 'low-hanging' fruit.

 

[Mikesgirl]

I've shopped Blue Nile, I like Blue Nile and my stone is .1 degree off (in the pavilion) of super ideal cut. Their signature collection DOES give you all the numbers, and personally, after running those numbers with HCA and AGA, I was more interested in seeing the stone and having it appraised that having all the scope analyses and photographs. I would have liked to have seen a Sarin, but didn't feel it necessary with a 30 day return policy. I think that Blue Nile may well start providing Sarins with their signature collection in time - the more people that ask, the more likely they'll do it.

I was shopping for a .7 carat stone, and still found Blue Nile to have the best options. I almost bought from Superbcert, but must admit I was put off by not being able to reach a live person and the notarized form that I had to return to work with them. I appreciate that they are a much smaller business, and don't have sales associates manning the phone 24/7, and there is no doubt that they provide excellent service and amazing stones. But for me, the Blue Nile price was competitive (within $100 of all others I considered - on a $3000 stone). It was also the ONLY 0.7 HCA rated stone I found anywhere at the time, and the purchase and potential return process were much simpler which felt better for me.

Obviously, they are doing something right (by not limiting their sales to us cutnuts)or they wouldn't be doing so well.

PS - the article mentioned at the beginning of this thread says their inventory is 30,000 stones.

 

[Got Rocks?]

The reason I didn't buy from Blue Nile is because they do not offer a trade-up at all (as of August when I purchased). I also felt more confident buying from Good Old Gold with all the information they provide. I didn't like calling Blue Nile to ask every little question about each individual stone. However, my sister has a beautiful one carat princess from there. My brother-in-law told me blue nile had a trade-up, but when I asked the blue nile rep, he said no, because most consumers don't like to buy 'used' diamonds (referring to the one that you would be trading back in for your tradeup ). I still chuckle when I think of the 'used' diamond reply. And yes, they were a little pricey. It seemed I could get slightly more elsewhere online. But again, my sister's stone from Blue Nile is awesome. And so is my 2.08 RB from Good Old Gold!

L O V E IT!!!!!!

 

[aljdewey]

----------------
On 11/7/2003 9:54:39 PM Mara wrote: From the CEO's statement at the end of the article, which I quoted, he wants to catch ALL business. He doesn't want anyone to shop elsewhere. That is what prompted my original statement of...well add X and Y and you may get closer!

Wrong. Getting all business doesn't mean treating every customer as though they have the same wants and needs. Putting a Sarin in front of someone who doesn't value it/doesn't want it will most assuredly NOT capture his business. Getting all business may mean putting that information up front for his "signature series" stones, and for the lower end it may mean dropping the price point. One size does not fit all, and market intelligence is finding out what they want, not assuming that everyone wants the same thing.

So it's wait until there is a problem and then act reactively to it? ....By acting PROACTIVELY they can be ready if/when it happens,

That's not what I said nor what I was suggesting. What I said was this: not every customer gives a crap about a Sarin, and the idea that plastering Sarins up on every stone is a smart business direction for BN isn't the solution. No, I'm not suggesting what until there's a problem.....I'm suggesting that there is more than one "problem".......more than one kind of customer, and it's important to proactively determine what will grow EACH segment of their business and implement varying action plans for each. That's not the same as "if you provide a Sarin, they will buy......." (said in the tone of "field of dreams!" /idealbb/images/smilies/11.gif)

The online researchers who are surfing for diamonds DO care to learn more, or else they would be at Tiffanys or the random B&M plunking down their $1999 for that 1c stone. They may not care to know every detail, but they care enough to log onto google and type in 'buy diamond'.

Not entirely. Most of the online *researchers* (and I use that term very loosely) are just looking to make sure they didn't overpay. Not everyone approaches purchases as a "quest" the way you and I do, and not everyone is looking to learn enough to help them pick a superior-performing diamond. God, how many yutzes have come here AFTER purchase and asked if they got a good deal? They don't ask if the stone is nice.....they don't ask the lab is reputable.....all they care about is "did I overpay?" Hell, many times, in spite of our best efforts to provide some education on diamonds, you'll still get a bunch who say......"yeeeeeeeeeah, that's nice........but is $5000 a good price for this .75, D, VVS1 stone?"...."I know it's not the best cut (scored a 9.0 on the HCA), but it's the size I want and is it a good price?" UGH.

Even further on that point......most don't come to "learn" about diamonds....they come to see if they can find it cheaper on the net........period. So, they find BN, they are thrilled that they saved $800 on the stone vs. what Zale would have charged for the "same thing.......G, VS" (as if all G, VS2 stones are exactly created equal), and that's it. Not everyone cares to learn about diamonds.......they just care that they didn't get screwed, plain & simple.

That is what you non-marketing people don't understand (

)...its all in how you PITCH it. They would have to educate their customers and they get enough site traffic to do it right. We are assuming that people don't care to learn--which I don't think is true. I think that when you put information in front of someone, they tend to read it.

It's not SOLELY in how you pitch it. Look, you can TRY to spend all day pitching me about the importance of sub-woofers and tweeters, etc, in audio equipment. I'm a total loser in this area.....I cannot distinguish the difference. For me, ALL I CARE ABOUT is that my radio tunes in with no static. You can spend all day trying to market to me on why all those other things "enhance" the sound quality, but you'd be wasting your time.

People want to learn enough to make a "reasonable" purchase......that's why they get as far as the 4Cs. But not everyone wants to learn every fricken thing to know about diamonds.......they aren't looking to take GIA classes or get a PhD in gems.......no matter how much marketing people would love to think so. I know this is hard for us to get, because we obviously find diamonds interesting, but not everyone wants to learn about them that much. Why do you think I'm doing all the diligence on it? Because I know Rich is not looking to "expand his horizons" on gems.....he just wants me to get a nice stone, and he knows I'm a FREAK about making a smart purchase. It's like the ultimate game/challenge to me. Even when I've researched something to death and I KNOW I made a good purchase, I'll watch for the next MONTH to make Sure! But not everyone is this way........they just aren't. Look at jlim. He didn't want to hear from people who know about diamonds....he just wanted what he wanted......a diamond that would fit his cultural values and superstitions. In spite of very strenuous efforts to help him see the light, the truth is he didn't want to see it!

Education is a goal to a point, but please.......retailers educate for the purpose of making sales!!!! Not because it's altruistic. Trust me......the CEO at Blue Nile is not on a mission to make sure 100% of the people understand diamonds the way PS folks to.....he wants 100% of the SALES, not their admiration. If a shopper has the credit card out ready to purchase an F, VVS1 stone from BN and that shopper says he wants those specs because he doesn't know anything about diamonds except that he heard those color/clarity grades were "safe"......don't even begin to think that the CEO at BN is going to defer taking the check to "educate" the customer how much more value he'd get in a G, SI stone. He wants to educate them enough to make a sale, and that's it.

I accept that we aren't going to agree on this......but it makes for interesting chatter.

----------------

 

[aljdewey]

----------------
On 11/7/2003 10:35:35 PM Got Rocks? wrote:





The reason I didn't buy from Blue Nile is because they do not offer a trade-up at all (as of August when I purchased). I also felt more confident buying from Good Old Gold with all the information they provide. I didn't like calling Blue Nile to ask every little question about each individual stone. ----------------

Thanks, GR.....exactly what I've been trying to say. GR would have *felt more comfortable* with more info, but for him, the trade-up issue was the reason he didn't buy. Having a Sarin on the stone would have been nice, but it wouldn't have solved his concern.

Also, Mikesgirl said: Their signature collection DOES give you all the numbers, and personally, after running those numbers with HCA and AGA, I was more interested in seeing the stone and having it appraised that having all the scope analyses and photographs. I would have liked to have seen a Sarin, but didn't feel it necessary with a 30 day return policy.

So, if BN decided that providing photographs was going to get the sale, in her case, they'd be wrong. She would have liked the Sarin, but it didn't prevent her from buying.

One size doesn't fit all.

 

[canadiangrrl]

Here's my completely unquantified take on the diamond e-ring market.

You have your $1999 Zales/Kay's shoppers. May have concerns over cut, colour, clarity, etc, but believe what they're told by the salespeople. Taken in by "the deal." Have "magic carat weights" (e.g. 1 carat) in mind as being the ideal. This is probably roughly 70% of the North American diamond e-ring market.

You have your Tiffany's/HOF/insert brand of choice here shoppers. Automatically associates name brands and the accompanying price tag with quality & prestige. Probably 10% of the market.

You have your Derco/Shane's shoppers. Looking for "the deal", they likely have a better idea as to what constitutes a well-cut diamond. Probably 5% of the market.

You have your cut freaks. To use the car analogy, they want to know the compression ratio on the third cylinder. Looking for "the deal", balanced with quality. Probably .5% of the market, but growing.

Who does it make the most financial sense to cater to? Likely not the cut freaks - capital investment in B'scopes, Sarins, Firescopes, and the like, is huge, and their margins are relatively slim. I think BN realizes this, and knows that the .5% of the e-ring market is growing...(the relatively recent addition of their Signature Series line certainly points in this direction) but not yet at a rate fast enough to justify diverging significantly from what's made them successful thus far.

They're obviously doing something right - they're profitable.

Mr. Canadiangrrl, to use the car analogy, only wants to know that it's black and has four doors (I'm exaggerating, but he's just not a cylinder-compression kind of guy.)

I know many, many more people like him than I do the cylinder-compression types. Does it make them "bad" shoppers? Not if they believe they're getting value. Are they uninformed consumers? Not if their need for information is being met.

I'm one of those marketing types, too, but in the end, I have to agree with Aljdewey. We ain't gonna win 'em all.

 

[Mara]

We may all just agree to disagree but I will give it one last shot.

I am going to email the CEO of Blue Nile and give him my two cents. Tell him what I think he should do. He can take it or leave it. I have been in internet marketing for a while and I have emailed companies before with my suggestions as an eCommerce/IM person and within months I have seen them implement things very close to what I suggested. Not that it's *all* about what I say...but online vendors who push the envelope tend to like to hear from others on where they could improve.




Internet shopping is all about convenience, selection and information...those are the bottom lines. That is what market research shows. I specialize in my field, and I know how to sell people online on my products. Chances are Blue Nile does too. It's definitely not one-size-fits-all, but its how do you reach that consumer. They are doing a good job of it now, but they will have to be BETTER in order to continue their aggressive growth patterns. I don't think sitting on their laurels and being happy that they are reaching the average user is going to get this CEO where he wants to be.




In my opinion...again...if a consumer is coming online and doing research...chances are very good they want to see what they can learn before they buy. Keep in mind again we are not talking about the random maul users. I'm not even talking about people on Pricescope. I'm talking about average net users who log on and search for diamond information. Blue Nile HAS the traffic. They have the viewers, I bet their website traffic is amazing. Now how can they turn those viewers into buyers. I think it's with more information and education on why that information is good to know. My company sells about 1% of the website traffic that we get on on our site. Why is that number so low? It's because we don't have what they are looking for. What exactly that is is what we need to find out. Blue Nile needs to do the same if they want to continue their growth trend. We are currently working on this ourselves. We aren't content with what we are making online, we know we can tap into more. HOW is what we need to figure out. Research is the key reason people tend to buy online or at one vendor vs another when surveyed.




My points are simple...BN has had a great run of it so far..but they need to be BETTER to continue the growth they are experiencing. Staying in their niche may not accomplish that. They have managed to stay ahead of everyone so far but how long does that last without improvements. Site enhancements...more information. Pretty pictures. For Gods sake at least have a picture of the actual stone! Be BETTER. It's not one size fits all. The internet market is growing in leaps and bounds, eCommerce doubles or triples every year, the numbers are insane. People are more and more comfortable with coming online to spend their money. That will translate sooner rather than later to more online sales for even markets like diamonds and jewels. So right now 70% of the offline market shops in B&M's...eventually those numbers will venture online--even if only to look. It will be interesting to see where things are 5 or 10 years from now and what is the norm for types and breadth of information.




But until then, all of us...can only speculate on what we think is the right way.

 

[aljdewey]

Mara, I don't disagree with one thing you've said in your final comments. They are all things I've said too and agree with. I'm not suggesting that BN should sit back on their laurels. I agree that they need to do things "better" in order to reach the people they don't yet have as customers.




There is always room for improvement. There is always a higher percentage of the market to capture. There is always something else to be done to attract the business of those you don't yet have.




My only point is: Your initial contention was that BN should provide Sarin info on every stone, and I don't agree that doing so is the solution to getting the CEO where he wants to go.......to garner sales from 100% of the market. As Canadiangrl points out, there is not enough demand for that information to make it a "must-have" for every stone. Should every stone show a pic of the actual stone? Maybe....and I tend to think that might be more meaningful to a greater percentage of the shoppers. I can't say for sure. But the initial discussion was "it only takes 10 minutes and 2 seconds to provide a sarin, and why don't they do that for every stone." My reply: because that tool isn't needed to sell every stone....it isn't even integral to selling nearly 90% of those stones.




We've all experienced this with Mr. Canadiangrl, Gregg, Rich, et al......we've all noted how their eyes glaze over when we get in depth about stones! That's my point......Rich can appreciate my knowledge of the facts in helping to select a stone, but it doesn't interest him. You could kindly offer him the information, but he wouldn't dive into it and read it lustily. Similarly, my father's been this way for YEARS. When he goes out shopping for jewelry for my mother, he doesn't care about ANYTHING except: does he like how it looks? That's it.....that's his total criteria. If you set that information in front of him, he'd skip right over it to "where is the necklane/pendant/etc."




None of this is to knock your ability in what you do for a living, anymore than I think that's your point to me in sales. In fact, the two typically work together to make it happen.

 

[Chrisk327]

Personally I think Maria is going looking in the wrong direction.

Providing sarins idealscopes and firescopes on their diamonds is not the answer to winning the diamond market, nor is it the answer for BN to increase sales. Every website gets a lot more traffic than buyers, fact of life. Not everyone is looking to buy. BN has to be able to get the 98% of the market they currently don't have. To do this they need to market to the uninformed, uneducated, internet wary consumers. This is where the money is. Most BN customers are well informed, educated, and are probably more well off than most. They do have a "diamond education" that may not come close to those of us on Pricescope, but they do know their Cs, which is more than most people. The main $$$ (i would think)are spent in the mall stores, B&M, and diamond districts by customers with little or no education on diamonds. Most likely they would not buy a diamond online. BN has to make them want to buy a diamond online.

BN have their own signature series to cater to the more well informed, however, it is more to cater to the "elite" rather than the well informed. People who want to feel that they got the best. These are the same people who buy H&A b.c of the advertising as "the best" and the people who buy from the tiffanys of the world.

The details matter to some, but that is not where the money is, its a Niche market, and although big players can and maybe should play to it, the millions of dollars lie elsewhere.

 

[Mara]

Al..then we can agree on more information....I tend to think thats more complete information. Post the picture of the stone (that actually is my biggest beef with most of these online companies...even Rhino doesn't always put up a picture of the actual stone in regular lighting...but has 90 zillion other pictures or scope reports). I picked the Sarin because to me that's the information that people probably NEED the most when they want a well cut stone, they just don't really know it. People always want the best looking stone, what they don't realize is that means cut. For me...education goes hand in hand with sales, well when you have something to educate about. I see that BN categorizes their diamonds by 'cut' as well and I automatically think, well show the customer exactly what that means.




Want an interesting exercise? Log onto Blue Nile and click on their 'recently bought diamonds' section. I like looking there. It runs the gamut, but you don't see alot of big (2-3c or similar) stones. Most are under 1c...so interesting. The color and clarity is all over the map, but the one thing that is pretty consistent every time I visit this area of their site is that the cut is Very Good or Ideal. That's BN categorization and it will not 100% be true (I have run #'s on some of their regular Ideals on the HCA and wooooooeeee...not always good), but if most of your clientele seems to be tending towards the more well cut stone, again...why not show them? If most of BN's recently bought stones were 'poor' or 'fair' cut...maybe not but if these people are looking for a well-cut stone and you really DO have one...show them and educate them. It may make the difference between a surfer and a buyer.




It would be an intriguing test for them to put up all Sarins on their 'Ideal' (not Signature) cut stones, a little education blurb like they do for all the other 'definitions' and see if that prompted an increase in sales. It may very well not...but who knows? Speculation...




Ahhhh morning coffee...good.

 

[stephcola]

Hey Mara,
It's me again. I don't think BN posting Sarins would help sales any. They sell diamonds like crazy. People trust them - especially after their write up in Forbes last year. The average person (like me) barely know's about GIA certs. I know it is hard for all of the cut nuts to understand but most people aren't frequent diamond buyers and are ignorance is truly bliss. I am a highly educated person and a true shopper by trade and passion. I love big name items but don't like to pay retail for them. Enough about me. When I needed to replace my stone - I didn't know about EGL their grading rep , or almost anything else,I just knew GIA. If the first stone I purchased didn't look purplish in the sunlight , I would have kept it and have been totally happy EGL). I think most people are like that. They want a nice size stone as white as they can get and one that is eyeclean. Very simple...

After doing 3 months of research, I know about Sarins, etc. etc. and I am very happy with what I now have. When I purchased the first BN stone, it was in the VG category - table 58/depth 60.2 VG/VG. SI1 (I). The stone was fabulous except in the 3.38 I saw a yellowish tinge. If it wasn't for the color I would have gladly kept the stone ( without Sarin, etc.).

My point, long and drawn out as it is, is.....If the price is right, you cannot see the inclusions, you are happy with the color and the stone sparkles...people will be happy. This is how most of the world gets by.

For those more diamond saavy ( which I am not knocking but applauding....) ask for the reports and you shall receive. THere is a vendor for every customer. The cut nuts have their own niche and several excellent vendors with whom to do business. The whole point of the BN article is how they brought diamonds online to customers - satifsying the customers and their bankers as well. Why waste time posting all types of documents when it will only confuse mostly everyone. Once again, generalizing.... most people like it simple. Give them something nice (that they can verify - with a cert) at a good price and they are happy.

Personally, I am happy with my newly acquired diamond knowledge and I know I got a great stone for the $$$$. Not everyone has months in which to do research and if they do, don't always know where to go to get it. I found pricescope by accident!!! What a happy accident for me.

Thanks again. Just wanted to give the average Jane's view. I know the average Jane does not have a 3ct. but I will say BN had a good selection in that size and they were very nice stones.

My great customer service guy told me they sell the mostly 1ct. H VS2 stones. That's apparently what they average Joe is looking to purchase for his sweetie. Regards,